Andrada Mining Limited (AIM: ATM), an African technology metals mining company with a portfolio of mining and exploration assets in Namibia, provides an unaudited production update for the Uis Mine (“Uis”) for its fourth quarter (“Q4”) and full financial year ended 28 February 2023 (“FY 2023”).

In the interview below, CEO Anthony Viljoen provides an update on the business, filmed in February 2023

Andrada’s recent fourth quarter production performance reflects the effective management of the company’s resources. They have successfully realized the significant economies of scale of their unique ore body, and the upcoming completion of the bulk testing pilot facility will further enhance their lithium production capabilities. This positions them well among the AIM lithium producers. The ongoing drilling programs will increase the size and confidence of their resource, and confirm the Erongo region’s potential as an emerging tech-metals province. Andrada’s first-mover advantage in the region, coupled with their existing operational footprint, makes them a promising company for future growth and value.

 

Highlights

Lithium

• Anticipated completion of the lithium bulk-testing pilot facility in June 2023.
• Metallurgical testwork done by Geolabs Global, an independent test facility in South Africa has identified a process that could produce a lithium concentrate suitable for buyers’ specifications in industrial and battery feedstock markets.
• Drilling on the ML129 licence area (B1C1 pegmatites), to investigate the visible spodumene mineralisation, commenced in January 2023.
• Field mapping of drill targets on the ML133 licence area (Nai Nais pegmatites) finalised.
• Detailed exploration update scheduled for release in June 2023.
• Andrada is exploring several options for achieving early lithium revenues in the second half of the 2023 calendar year including concentrate production from the bulk pilot plant.

Operations

• Record quarterly production of 361 tonnes of tin concentrate in FY Q4 2023, containing 214 tonnes of tin metal.
• 19% increase in tin concentrate production year-on-year (“YoY”) to 960 tonnes (FY 2022: 804 tonnes).
• 18% increase in contained tin to 586 tonnes (FY 2022: 496 tonnes).
• Lowest ever quarterly all-in sustaining costs (“AISC”) at USD 18,236 per tonne of contained tin in Q4 2023.
• Full year AISC fell by 9% to USD 24,939 YoY.
• Commencement of confirmatory drilling in February 2023 to upgrade historic resources on proximal pegmatites.

Financing

• Significant progress towards fulfilling the precedent conditions for the Orion Resource Partners (“Orion”) and the Development Bank of Namibia (“DBN”) financing.
• Cash balance at the end of February 2023 increased by 16% to GBP 8.6 million (USD 10.3 million) from GBP 7.4 million (USD 9.9 million) on 28 February 2022.

Management restructuring

• Appointment of Frans Van Daalen as Chief Strategy Officer (“CSO”) to drive business development strategy, with a focus on accelerating the lithium project and Chris Smith as the Chief Operations Officer (“COO”), both non-board positions.

Operational guidance for the 12 months ending 29 February 2024 (“FY 2024”)

• Tin concentrate production guidance of between 1,400 tonnes and 1,500 tonnes, an expected increase of between 45% to 56% YoY, due to the plant expansion ramp-up.
• Average operating cash costs excluding selling expenses defined as C1 operating cash costs are projected to be between USD17,000 and USD20,000. These are costs within management’s control that are expected to remain relatively flat from levels in Q4 2023 (post expansion) and subject only to exchange rate fluctuations.
• Average operating cash cost per tonne produced including selling expenses (shipping, freight, and royalties) projected to be between USD20,000 and USD25,000 and AISC between USD25,000 and USD30,000. These costs are expected to rise mainly because of a temporary increase in stripping rates for the V1/V2 pit and the inclusion of the 4.5% royalty costs associated with the proposed Orion transaction. The pushback width in the pit has increased from approximately 50 metres to 75 metres in line with the expanded capacity and the provision of safer and more efficient operations.

The guidance excludes potential lithium and tantalum revenues. Management will provide guidance following the commissioning of the lithium pilot plant and tantalum circuit expected in June 2023.

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