First permanent infrastructure being built at new DRC tin mine

JOHANNESBURG (miningweekly.com) – The first permanent mining infrastructure is being built at the proposed new tin mine at Bisie, in the Democratic Republic of Congo (DRC), for which $130-million is being raised.

Alphamin Resources CEO Boris Kamstra said the return airway drive being built would be used to acclimatise mining crews to safety at the Mpama North prospect in North Kivu, where a definitive feasibility study points to a 380-employee operation that will produce at a rate of 9 000 t of tin in concentrate a year from 2019.

Speaking to Creamer Media’s Mining Weekly Online in a video interview, Kamstra said the company would make use of the infrastructure to allow 26 artisanal miners to undergo training in hazard identification and risk mitigation, ahead of the full development of what will be an underground mine.

To date, about $50-million has been invested in the project, which will require capital expenditure of $120-million and working capital of $10-million.

“$130-million will be the final hurdle we have to get over,” Kamstra told Mining Weekly Online.

The all-in cost of production of $8 448/t compares with a tin price of $16 465/t at the time of going to press and a definitive feasibility study tin price of $14 800/t, which allows for payback in 22 months. (Also watch attached Creamer Media video).

Results of the Canada-listed company's drilling programme have lifted the quantum of contained tin to 230 000 t at an in situ grade of 4.5% from a previous 194 000 t at 3.5%.

At the current tin price, it has a probable 18-month payback for a life-of-mine of ten to 12 years.

“We’ve got terrific margin, just as a consequence of this most extraordinary grade and this really unique deposit,” Kamstra commented.

The supply charts of the tin industry currently resemble those drawn up during South Africa’s energy crisis to depict the coal supply cliff that Eskom was facing.

The only difference in Kamstra’s view is that the tin supply cliff is going to eventuate as a result of major tin producers experiencing grade deterioration, greater mine depths, ore reserve depletion and profitability challenges.

Even if the supply from Myanmar, which has been unpredictable, remains at 40 000 t/y, Kamstra’s view is that question marks over supply adequacy will remain.

The company's calculations point to new tin operations being desperately needed to fill the supply gap.

AREA OF CONFLICT METALS

Bisie’s past has been one of the reasons why tin was included in the Dodd-Frank legislation, which was introduced by the US to stop DRC warlords from using metals to finance their conflicts.

The legislation means that Alphamin will now be forced to demonstrate to the likes of Apple, Microsoft and Samsung that its tin is 100% conflict-free.

“We will comply,” Kamstra assured Mining Weekly Online.

Ownership of the Alphamin is at two levels. The DRC company Alphamin Bisie Mining owns the mining title; the DRC government has 5% as a free carry; the State-owned Industrial Development Corporation of South Africa has a current 11% of an eventual 15% once the final $3-million of a total of $10-million is paid; and Alphamin holds the balance of the shares in the in-country company.

Within the the $53-million market capitalisation TSX-V-listed company itself, the major shareholder is Mauritius-based Tremont Master Holdings with 43% and Malaysia Smelting Corporation with 5%. Tremont is the African investment platform for Denham Capital, an $8.4-billion US-based resource fund.

The company is committed to contributing to the stability and economic activity in the recently troubled North Kivu, adding significant benefit to the community. 

It regards itself as scalable within what its exportation already indicates is a tin province, where it will have the potential to self-fund future expansion.

Local community support will be encouraged through the Lowa Alliance, a non-profit foundation that will drive comprehensive and ongoing economic and social development funded by the in-country company.

DRC’s tin industry, which is still recovering following its collapse in 2010, is regarded as an important mining diversification in an economy that is heavily copper and cobalt dependent.

The security situation in eastern DRC, though improved since the 2013, remains a concern.

Besides $7-million from the IDC, Alphamin has, since December 2013, also received $24-million in financing from Tremont.

Bisie consists of not only Mpama North but also Mpama South, both located in the Walikale district, 180 km west-north-west of the regional centre of Goma.