AfriTin Mining (ATM) – Why should Investors be Excited about Tin?

AfriTin Mining Ltd.
  • LON: ATM
  • Shares Outstanding: 653M
  • Share price GB£0.03 (25.06.2020)
  • Market Cap: GB£18M

Interview with Anthony Viljoen, CEO of AfriTin Mining (LON: ATM)

AfriTin Mining: the only pure tin play that is listed on the LSE. The company has a portfolio of advanced African tin assets in Namibia, the Uis Project, and in South Africa, the Mokopane Tin Project. While tin might not be a commodity that instils as much excitement as something like gold, AfriTin’s ambitions certainly do. The company’s long-term goal is to transform into a fully-operational tiny producer with smelting capabilities within 5-years. The company is currently producing tin and is one of the few junior mining companies that is revenue-generating.

The tin market, like many base metals markets, is primarily controlled by Asian open-pit operations. AfriTin mining is looking to take a piece of that pie. Industrial demand projections for tin might not have the exponential growth predicted for battery metals, but the sustained incremental growth is encouraging enough in its own right. The growing supply/demand gap over the last 5-years is something AfriTin is trying to exploit.

Matthew Gordon talks to Anthony Viljoen, 25th June 2020.

Taking a more in-depth look at AfriTin Mining’s portfolio, we can see the company’s business strategy start to take shape. While Mokopane is in a lower quartile form operating costs, it is currently on the backburner while the “massive, multi-commodity resource,’ Uis, leads the way. Uis was the largest tin mine of its kind in the world but has been lying in dormancy for years. The potential of rising tin prices appears to have provided a possible pathway back to production. Uis also has some potentially viable metal by-products in the form of tantalum, niobium, lithium, beryllium, feldspar, and muscovite. At AfriTin’s phase 1 beneficiation ‘pilot project’ plant (a scaled-up version of the old pilot plant the company purchased), which is now up and running, the company claims to have an efficient operational process flow that revolves around Dense Medium Separation (DMS) modules as opposed to the historically popular jigging circuit.

What do the numbers look like?

  1. JORC-compliant resource of 71.54 million tonnes at a grade of 0.134% tin.
  2. An inferred mineral resource estimate of 71.54Mt and 0.0085% tantalum (6,091t contained tantalum).
  3. An inferred mineral resource estimate of 71.54Mt at 0.63 % lithium oxide (450,265t contained lithium oxide).

We appreciate that Viljoen was fairly candid about AfriTin’s reliant on the tin market taking an upturn, stating “when it happens, we just go along for the ride.” AfriTin was “just about” in the ramp-up phase in December, before COVID-19 threw a spanner in the works. Bar a few optimisations for the plant, accelerated development looked a real possibility, but the instant shutdown in both South Africa and Namibia significantly impaired operations.

If investors are fans of the tin macro story, and they believe AfriTin is onto something good with a strong management team, the next logical step is to look at the financing side of things. The company already raised GB£2M in May with 10% interest on a 12-month term. Does taking expensive money imply a sense of desperation? Viljoen puts it down to trying to avoid dilution and bolster the company’s balance sheet while mitigating the impact of COVID-19. The company currently has total debt of c. GB£2M in addition to a convertible note. Both are due next year. AfriTin is engaged in regular conversations with Namibian financing institutions.

AfriTin has already put in US$20M-$30M to get the project towards the end of phase 1, but has not yet spent the money needed to fully refurbish the plant, pushing up the throughput and recoveries, alongside any potential that there may be for a lithium byproduct stream. These are not equity costs. Once the project is defined, it will be put into a bankable document and the benefits of these optimisations will be more clearly and directly translated into revenue. Until then, institutions will likely want to wait for a proof of concept tin concentrate production. Investors can expect to see some real progress in the next 6 months. Let’s hope Viljoen can deliver; CEOs can’t blame COVID-19 forever.

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The company’s tin assets are primarily open-cast propositions with metallurgy that is amenable to simple, cost-effective gravity-based processing with good recovery. I don’t doubt that AfriTin has some good assets, but I’m questioning the pace at which this has moved to date. Moreover, a chronic lack of communication with the market has left many shareholders and prospective investors in the dark. This needs to improve going forward if the company intends to attract a loyal base of retail investors who are currenlty throwing their money at more fashionable companies.

What did you make of Anthony Viljoen and AfriTin Mining?

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