One of the bigger trends of 2023 looks like being the reopening of China following 3 years of the COVID-19 pandemic. There are several ways to play this thematic – Chinese funds/ETFs, iron ore, but how about tin? The tin price is up a staggering 22.76% over the past month (at the time of writing).

Trading Economics states: “Tin futures were trading around the $30,000 per tonne mark, a level not seen since June 2022, as top consumer China made efforts to reopen and support its economy, thus lifting the outlook for demand.”

The 10 year tin price chart shows tin prices recovering in 2023 now at US$29,536/t

Source: Trading Economics

Tin is a key metal for the green energy transition as it is used in electric vehicles and solar panels. This is mostly because tin is used in solder (49% of tin demand comes from solder). Solder is used in practically every electronic product in the world today. As production and demand for consumer electronics recover in China that bodes well for tin prices.

Tin is the hidden green energy transition and consumer electronics metal of today and the future

Source: International Tin Association

Alphamin Resources Corp.

Alphamin Resources Corp. (TSXV: AFM) (Alphamin) currently produces ~4% of the world’s tin (Sn), or ~12,000tpa. Alphamin state: “At a tin grade of roughly 4.5%, Mpama North is the world’s highest-grade tin resource – about four times higher than most other operating tin mines in the world.”

Alphamin is a low-cost tin concentrate producer from its high-grade deposit at Mpama North at their 84.1% owned Bisie tin mine in the DRC.

The 2022 Resource estimate is an Indicated Resource of 0.84 million tonnes at 2.53% Sn (21,400 contained tonnes of Sn) and an Inferred Resource of 4.99 million tonnes at 2.5% Sn (124,750 contained tonnes of Sn). Alphamin has recently managed to increase the Mpama North Resource as you can view in the video here.

The exciting part is that Alphamin is a low cost producer so is nicely leveraged to tin prices. Even better is that Alphamin intends to expand the mine’s production from 12,000tpa Sn to ~20,000tpa Sn from FY2024, which would equate to about 7% of the world’s tin supply.

As announced in October 2022, Alphamin’s Mpama South development project is progressing according to plan. Alphamin stated: “The project is progressing on schedule for targeted commissioning in December 2023. Overall project completion is at 18.6%, and 84.3% of the procurement requirements have been finalised and ordered. The project is not expected to exceed its total cost estimate of US$116 million.”

Alphamin’s milestones and goals and Mpama North & Mpama South shown below

Source: Alphamin company presentation

Alphamin exploration continues

In addition to drilling for resource extensions at Mpama North and Mpama South, Alphamin is exploring for more tin deposits on its license areas. The Bisie Ridge Phase 1 new discovery has been accelerated with ~90 drill holes planned on six highly anomalous targets, following which a Phase 2 campaign will delineate any discoveries or else in fill the most prospective targets.

Closing remarks

Alphamin Resources is a pure tin play highly leveraged to the tin price. Being a low cost producer allows Alphamin to remain profitable throughout the tin price cycle. As China reopens early price indications are suggesting 2023 will be a good year for tin, and hence the quality tin miners.

If Alphamin can successfully bring on Mpama South into production and further grow their resource, then the outlook is very bright for Alphamin this decade.

Alphamin Resources trades on a market cap of C$1.273 billion and a PE of 8.33. One to watch out for in 2023, especially if tin prices keep rising.

When I last wrote about one of the highest grade tin producers, with production of roughly 4% of global volume, their share price was C$0.69/share. That was in July, 2021. Yesterday, this company’s stock closed at, wait for it, C$0.69/share. What have they done in the interim? Increase cash and cash equivalents by US$124 million to US$147 million, reduce debt to almost zero (US$9 million at June 30, 2022), declare a dividend of roughly 4% and announce plans to increase production to 6% of global volume by 2024. Naturally, this left me a little confused, so I think we should have a closer look at what’s going on here.

The company in question is Alphamin Resources Corp. (TSX: AFM), a low cost tin concentrate producer from its high grade deposit at Mpama North on its mining and exploration licenses covering a total of 1,270km² in the North Kivu Province of the Democratic Republic of the Congo (DRC). At a tin grade of roughly 4.5%, Mpama North is the world’s highest-grade tin resource – about four times higher than most other operating tin mines in the world. It is also one of the largest tin mines outside of China or Indonesia.

The Company recently announced Q2 results, which were very positive, showing quarter-over-quarter growth in ore processed (+7%), tin produced (+4%) and a reduction in AISC (-7%). A slightly lower tin grade processed for the quarter (-2%) coupled with a materially lower price (-19%) led to a marked drop in EBITDA (-32%). But we’re still talking about a very positive quarter which allowed the Company to add US$6.5 million to cash and cash equivalents even after an incremental tax hit of US$11.7 million due to a special “superprofit tax” applied by the Democratic Republic of the Congo (DRC). And on top of this Alphamin announced an interim dividend for FY 2022 of C$0.03/share. I like their use of the term “interim” as it implies, at least to me, that there could be more to come before the year is over.

As part of corporate plans to further expand production, this week the Company announced an updated Mineral Resource and Mineral Reserve estimates along with an updated life of mine schedule (LoM) for the Mpama North Mine. Without getting into all the numbers, the press release can be summarized by saying all the work Alphamin has done has resulted in all contained tin depleted since December 31, 2019 has been replaced in the new LoM schedule. The 154.5kt contained tin in the updated LoM versus the previous 154.2kt has also been accompanied by a valuable grade increase of 19.6% to 4.78% Sn from 4.00% Sn previously scheduled. In a nutshell, before we even get into the reserve adds from the Mpama South project, Alphamin is expanding Mpama North as quickly as it is mining it. I find this reasonably impressive when you consider it accounts for 4% of global production.

As for Mpama South, the Company stated with its Q2 guidance that exploration drilling delivered an additional 124,700t contained tin in inferred Resource and 21,400t contained tin in indicated Resource at Mpama South. Mine development of the Mpama South deposit (adjacent to Mpama North) has commenced and is expected to increase annual contained tin production from the current 12,000tpa to ~20,000tpa, approximating 6.6% of the world’s mined tin, effective FY2024. This is critical given Alphamin states that according to the International Tin Association there is a tin supply deficit forecast for the foreseeable future.

I couldn’t find this forecast myself (perhaps it’s behind a pay wall), however, the logic behind it seems sound. Four countries currently produce 75% of global tin concentrate and they all appear to be facing some sort of headwind. Chinese mines are maturing and are facing stricter environmental laws (but the cynic in me would suggest the latter is only an issue in a balanced to over supplied market).

Indonesian on-shore mining is declining and export bans are looming. Myanmar’s high-grade surface material is almost depleted and they are now moving into lower grade underground mines, which completely overlooks the political turmoil where the military junta is simply executing anyone opposing them. And Peru has commissioned tailings retreatment in an attempt to restore their declining production profile to levels from 10 years ago.

Source: International Tin Association

Returning to my opening challenge of why is it that the stock price is the same as 13 months ago, all I can suggest is that perhaps it’s the fact that tin prices today are US$24,675/t versus the July 15, 2021 close of US$33,510. If you are simply trading Alphamin as a proxy for tin prices then I guess it sort of makes sense that all the success the Company has achieved over the last year is offset by lower commodity prices — this formula is perhaps reasonable.

Tin prices have dipped recently but are still up over 100% from where they were just two and a half years ago. This means that tin producers continue to do extremely well in this high price environment.

Today’s company has been achieving near record tin production and selling prices. This has resulted in very strong revenue and EBITDA results over the past year. Plus they have been growing their resource and have plans to further expand production.

The company is Alphamin Resources Corp. (TSXV: AFM) (Alphamin). Alphamin is a high grade, low cost, tin concentrate producer at its Mpama North Mine in the Democratic Republic of Congo (DRC). Alphamin has the highest grade tin resource globally with a Resource Reserve of 3.33MT @ 4.01% Sn (tin) resulting in 133.4 kt of contained tin. Alphamin’s production equates to ~4% of the world’s mined tin.

Near-record tin production, sales and EBITDA in 2021 and Q1, 2022

As reported on May 13, 2022, Alphamin achieved 3,061 tonnes of tin production in Q1, 2022, boosted by recoveries improving from 75% to 78%. Contained tin sales increased by 9% to 3,336 tonnes at an average tin price of US$43,834/t. The AISC of contained tin sold during Q1 2022 increased by 4% to US$15,782/t. Alphamin stated: “As a result of steady production, good cost control and higher revenue, EBITDA for Q1 2022 amounted to US$98.1 million, up 32% from US$74.3 million the previous quarter.”

Growing their resource at Mpama South

As announced on April 4, 2022, Alphamin increased the Inferred Resource at Mpama South by 75%. The Mpama South Mineral Resource is now an Indicated 0.85Mt @ 2.55% Sn (21.5kt contained tin) and Inferred 3.42Mt @ 2.45% Sn (83.7kt contained tin).

Mpama North also had some excellent recent drill results from hole MND019: 14.4 metres @ 21.75% Sn from 432.2 metres, including 11.0 metres @ 27.81%from 432.2 metres.

Mpama South resource model

Source: Alphamin Resources news April 4, 2022

Mpama PEA and tin production expansion plans

Alphamin announced a very positive PEA for Mpama South on March 7, 2022. Alphamin CEO Maritz Smith commented:

“We are delighted to declare a Maiden Mineral Resource estimate and the outcome of a PEA study on Mpama South. The PEA quantifies the potentially value accretive economics of expanding production with the development of the adjacent Mpama South mine. Our current producing Mpama North mine absorbs large fixed costs, which facilitates incremental production from Mpama South at a competitive marginal cost. Developing Mpama South would bring Alphamin closer to its vision of becoming one of the world’s largest low-cost tin producers.”

Alphamin announced a positive PEA for the Mpama South project

Source: Alphamin news on March 7, 2022

Alphamin plans to increase annual contained tin production from the current 12,000tpa to ~20,000tpa (from FY2024), which equates to ~6.6% of the world’s mined tin. The estimated capital development cost is US$116 million. First tin production from Mpama South is targeted for December 2023.

Closing remarks

Alphamin has been producing strong revenues from tin production at their DRC tin mine. All of this has allowed the Company to rapidly grow their resource and announce a very large expansion plan from 12,000tpa to 20,000tpa, set to begin ramping from December 2023. This equates to a 66% increase in production.

Looking at Alphamin’s market cap it is currently at C$1.27 billion and trades on a 2022 PE of only 6.59, partially due to tin prices being lower in 2022. Not bad for a company set to rapidly grow production in 2024. Some increased risk due to the DRC location. Stay tuned.

The tin price boom continues with the price now at US$43,023/t, up ~3.5x from the 2020 low. The main drivers have been surging tin demand from the electronics and green energy sectors and a limited supply.

Tin is mostly used as solder, particularly in photovoltaic installations, electric vehicles, and electronics. The good thing about tin is that tin solder prices can go up, but that, so far, has had minimal impact on a company’s costs. The biggest producers of tin are China, Malaysia, Indonesia, Peru, Thailand, Bolivia and Myanmar.

According to the International Tin Association (“ITA”), the global tin market deficit is forecast to rise to 12,700t in 2022, from a 10,200t deficit in 2021. The ITA says that a US$30,000/t tin price is required to incentivize additional supply in response to demand growth.

Today’s company is riding the wave of the tin price boom with increasing production from its Mpama North Mine in the Democratic Republic of Congo, DRC.

Tin prices – 10 year chart

Source: Trading Economics

Alphamin Resources Corp. (TSXV: AFM) (“Alphamin”) stock price is up exactly 100% in the past year thanks to booming tin prices and its growing production.

Alphamin is a high grade, low cost, tin concentrate producer at its Mpama North Mine in the Democratic Republic of Congo (DRC). Alphamin has the highest-grade tin resource, globally, with a Resource Reserve of 3.33MT @ 4.01% Sn (tin) resulting in 133.4 kt of contained tin. Alphamin’s production equates to ~4% of the world’s mined tin.

Alphamin state:

Source: Alphamin website

Q4, 2021 results from Alphamin were a knockout. The Company announced the following:

• “Contained tin production up 10% from the prior quarter to 3,114 tons
• Contained tin sales up 13% from the prior quarter to 3,056 tons
• Record Q4 EBITDA⁴ guidance of US$74 million, up 38% from prior quarter actual
• Net cash position increases to US$68 million
• FY2021 dividend of CAD$0.03 per share declared.”

The 3,114 tons in Q4 2021 puts Alphamin on an annual run rate of 12,456 tons pa. At current spot prices of US$43,023 Alphamin would be on track for another year of record revenues (~US$535 million) in 2022. In the above Q4 release the Company guided cautiously for 12,000t of production in 2022. There was also mention of an ongoing drilling campaign with six rigs on-site.

On February 1, 2022, Alphamin announced the results of the above-mentioned drilling campaign. Results were again spectacular and included:

• “Mpama South high-grade assay results² received, including BGH079 which is the best drillhole assayed to date at Mpama South by contained tin: BGH079: 15.6 metres @ 5.00% Sn from 290.2 metres, including 10.0 metres @ 6.1% from 291.1 metres…….
• Mpama North high-grade assay results² received, including MND011 which is the second best drillhole assayed to date at Mpama North by contained tin: MND011: 19.6 metres @ 17.16% Sn from 419.3 metres, including 14.5 metres @ 23.0%.”

Imagine the excitement drilling “14.5 metres @ 23.0% tin (“Sn”) when tin prices are at US$43,023/t.

Mpama South is shaping up to potentially be another large high-grade resource – Maiden Resource due soon

Source: Alphamin news Feb. 1, 2022

Next steps

The next step for Alphamin is the release of a Maiden Mineral Resource estimation for Mpama South due in Q1 2022. Following this will be quarterly results throughout 2022.

Alphamin investment highlights

Source: Alphamin company presentation

Closing remarks

It is a great time to be a tin producer. Even better if you are a high-grade, low-cost, tin producer expanding production. And even better again if you can drill into 23% tin grades and grow your resource.

2022 is shaping up to be another very good year for Alphamin Resources. The Company trades on a market cap of ~US$1.3 billion up over 36% on when I wrote on them in Sept. 2021 on a then market cap of C$953 million. Stay tuned for the Mpama South Maiden Resource release soon.

In a recent InvestorIntel interview, Tracy Weslosky spoke with Maritz Smith, CEO of Alphamin Resources Corp. (TSXV: AFM) about Alphamin’s recent news release on achieving record Q3 EBITDA, and about its net debt free position supported by rising tin prices and increased tin production at Alphamin’s Mpama North Mine.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Maritz Smith said that, primarily used for soldering circuit board connections, tin is the glue that holds our technology, as well as circuit boards, together, but that there is a global shortage of tin at the moment because of decades of limited investment in tin exploration. Currently producing 4% of the world’s tin, Maritz said that Alphamin is well-positioned to capitalize on the growth potential in the tin market and ultimately fill a substantial portion of the supply gap going forward.

To watch the full interview, click here.

About Alphamin Resources Corp.

In this episode of the Critical Minerals Corner with Jack Lifton, Jack is joined by Maritz Smith, CEO of Alphamin Resources Corp. (TSXV: AFM) and Christopher Ecclestone, Principal and mining strategist at Hallgarten & Company to discuss the ‘price rally’ in tin. A critical material, they discuss the increasing demand for tin in the EV market, the rising shortfall and why “tin is the glue that holds the electronics and technology world together.”

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Maritz went on to explain why there is a shortfall in tin supply. Alphamin’s Mpama North is the world’s highest-grade tin resource – about four times higher than most other operating tin mines in the world. Currently producing 4% of the world’s mined tin, Alphamin is the first tin major since the 1970s. Maritz added that Alphamin has robust margins and cash flow and the Company is allocating internal cash flow to fund drilling campaigns to double its current orebody and discover another high-grade deposit south of Alphamin’s operating Bisie mine.

To watch the full video, click here

About Alphamin Resources Corp.