26 November 2019
AfriTin Mining Limited
("AfriTin" or the "Company")
Issue of convertible loan notes of £3.8m
&
Update at Uis Tin Mine
AfriTin Mining Limited (AIM: ATM), a tin mining company with assets in Namibia and South Africa, is pleased to announce that it has raised £3.8 million ("m") through the issue of unsecured loan notes ("the Notes"). The Company has also provided an operational update at its flagship Uis Tin Mine in Namibia ("Uis") which is in the commissioning phase.
Highlights
▪ £3.8m raised by way of convertible loan notes with a strategic African tin trading group and existing shareholders;
▪ Fund proceeds are to be used for general working capital purposes relating the progression of the project towards feasibility studies for the Phase 2 expansion at Uis and initial testwork on the lithium discovery within the pegmatite ore body;
▪ First shipment of tin concentrate scheduled for the end of November 2019;
▪ Plant ramp-up remains ongoing with name plate Phase 1 production of 60 tonnes of tin concentrate a month expected early in 2020;
▪ Construction of the grid electrical power connection at Uis is completed and energized allowing for rapid progression of the ramp up.
Terms of the Loan Notes
The Company has entered into an unsecured convertible loan note agreement for a total amount of £3.8 m of £100,000 each (the "Notes"). The Notes have a term of 18 months and attract interest at a rate of 10% per annum which is payable on the redemption or conversion of the Notes. The Notes, including the total amount of accrued but unpaid interest, are convertible at the conversion price of 4p per share, equivalent to a 36 per cent premium to the closing mid-market price of the Ordinary Shares on 25 November 2019. The Notes can be redeemed at any time at the election of the Company, having given 10 Business Days' notice of such intention, in whole or in part, if not already converted by the Noteholder and subject to applying an early redemption premium of 10%.
The Notes have been placed with a strategic African tin trading group, AfriMet Resources AG ("AfriMet"), as part of a collaborative partnership to identify further opportunities for the company, as well as with existing shareholders. AfriMet, a 100 percent owned subsidiary of the Zug based ferrous and non-ferrous commodity merchant, Vanomet AG, is a leader in trading the 3T metals (Tin, Tantalum and Tungsten) and minerals sourced from Africa. The net proceeds of the funds are expected to be used for general working capital purposes relating to the progression of the project towards feasibility studies for the Phase 2 expansion at Uis and initial testwork on the recently announced lithium discovery within the pegmatite ore body. If AfriMet were to convert their loan notes they would hold 40 000 000 Ordinary Shares in the Company, representing 5.8% of the issued share capital of the Company.
Related party transaction
The Orange Trust (a substantial shareholder in AfriTin, holding more than 10% of the issued share capital of the Company) wholly owns and controls Yellow Dragon Holdings ("Yellow Dragon"), which is a company participating in the Convertible Loan Note Issue. Yellow Dragon is subscribing for £1m of the loan notes which, if converted, would result in Yellow Dragon holding 25 000 000 Ordinary Shares representing 3.7% of the issued share capital of the Company (and would mean that the total holding of the Orange Trust, both direct and indirect, would be 89 874 704 Ordinary Shares in the Company, representing 13.4% of the issued share capital of the Company ).
Accordingly, the participation of Yellow Dragon in the issue of the Notes means that the transaction must be treated as a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. Accordingly, the directors of the Company consider, having consulted with WH Ireland, the Company's nominated adviser, that the terms of this transaction are fair and reasonable insofar as the Company's shareholders are concerned.
Phase 1 Update
At the Uis Tin Mine, mining operations are performing well and approximately two months of stockpiled ore has been delivered to the plant. The construction of the grid power connection is completed and energized. There was a slight delay to the original time frame, mainly due to the procurement processes of the Namibian Power Corporation. This has resulted in some plant availability issues which are now expected to be resolved.
At the processing plant, the crushing circuit has been performing in line with the Company's expectations. The final outstanding commissioning and ramp up activities are focused on the concentrator circuit which has required a series of refinements to balance the material flows and dewatering of the ore. Good progress has been made in fine-tuning these circuits and ramp up is progressing week after week. The final product is delivering a saleable tin concentrate with low contaminant values. Accordingly, the Company is preparing to make a proportionate first shipment of tin concentrate towards the end of the month. Future shipments will upscale in size as the ramp up of Phase 1 production continues.
Overall ramp up of Phase 1 is progressing well but full nameplate capacity of 60 tonnes per annum is now expected to extend into 2020 post commissioning completion.
Anthony Viljoen, CEO of AfriTin Mining Limited commented:
"I am pleased to announce the raising of £3.8m by way of a convertible loan note, anchored by AfriMet. We have been collaborating with AfriMet to establish multiple channels for revenue generation from the trade in Tin and Tantalum products as well as offering participation to our existing shareholder base, who have also subscribed to the loan note. The proceeds of the funds will be used to fund working capital requirements relating to the progress of the project towards the studies for Phase 2 expansion at Uis and initial testwork on the lithium discoveries within the pegmatite ore body.
Our mining activities are proceeding as planned and there are two mining areas producing ore. This bodes well for our steady state production requirements in the future. We should ship our first tin concentrate from Uis at the end of November, a noticeable achievement for the Company.
Ramp up at the Processing Plant has progressed slightly slower than expected due to the delay in receiving grid power. The connection in grid power is now complete and this will allow for testing of final processing refinements for the ramp up to steady state Phase 1 levels into 2020."
For further information, please visit www.afritinmining.com or contact:
AfriTin Limited |
|
Anthony Viljoen, CEO |
+27 (11) 268 6555 |
Nominated Adviser and Joint Broker |
|
WH Ireland Limited Katy Mitchell Adrian Hadden James Sinclair-Ford |
+44 (0) 207 220 1666 |
Corporate Advisor and Joint Broker Hannam & Partners Andrew Chubb Jay Ashfield Nilesh Patel |
+44 (0) 20 7907 8500 |
Joint Broker |
|
NOVUM Securities Limited Jon Belliss |
+44 (0)20 7399 9400 |
Financial PR (United Kingdom) |
|
Tavistock |
+44 (0) 207 920 3150 |
Jos Simson Barney Hayward |
|
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014
About AfriTin Mining Limited
Notes to Editors
AfriTin Mining is the first pure tin company listed in London and its vision is to create a portfolio of globally significant, conflict-free, tin producing assets. The Company's flagship asset is the Uis brownfield tin mine in Namibia, formerly the world's largest hard-rock tin mine.
AfriTin is managed by an experienced board of directors and management team with a current two-fold strategy: fast track Uis brownfield tin mine in Namibia to commercial production in 2019 as Phase 1, ramping up to 5,000 tonnes of concentrate in a Phase 2 expansion, followed by consolidation of other quality African tin assets. The Company strives to capitalise on the solid supply/demand fundamentals of tin by developing a critical mass of tin resource inventory, achieving production in the near term and further scaling production by consolidating tin assets in Africa.
