Andrada Mining Limited has signed a pivotal financing agreement, laying the groundwork for a two-year tin production ramp-up, alongside its lithium and tantalum prospects.
Andrada Mining, formerly Afritin Mining, has been producing tin at its flagship Uis mine in Namibia since 2019. The company aims to scale up its tin operations in two main phases: Phase 1 and Phase 2. Completion of Phase 1B last year saw its tin concentrate production capacity increase by 67%, reaching 900 tonnes of contained tin per annum.
This financing agreement is designed to increase Andrada’s tin production while accelerating the commercialisation of its revenue streams. The agreement, amounting to US$25 million, has been secured with the renowned mining investment fund, Orion Resource Partners. The financing is conditional upon the satisfaction of certain requirements.
Anthony Viljoen, CEO of Andrada Mining, commented, “The signing of the Orion financing agreement will provide sufficient capital to complete our expansion programmes at our flagship Uis operation.”
Half of the US$25 million funding comes through tin royalties, tailored to bolster Andrada’s tin production initiatives. It exhibits a dynamic rate structure, offering lower royalty rates as production levels rise. Starting at a base rate of 5.13%, the royalty rate will drop to 0.86% with the Phase 2 expansion, where the expected output is set to reach 10,000 tonnes per annum. The other half of the funding includes an equity subscription and a convertible loan limited to US$10 million.
Orion’s Philip Clegg, Managing Partner, commented, “We regard Andrada as a high-quality investment opportunity. We are excited to begin our partnership with Anthony and his team.” Finalisation of this funding is anticipated by the end of September.
Our view: Speaking at the Investing in Tin Seminar 2022, Andrada expressed its intent to first use ore sorting technology to increase tin production to 2,500 tonnes of contained tin per year in its Phase 1C plans. The revenue from tin production will undoubtedly aid the company in its plans to commercialise its lithium revenue streams. This funding also brings Andrada one step closer to its Phase 2 expansion plan. With production levels of 10,000 tonnes of contained tin, it is poised to become one of the world’s largest mines.
Andrada Mining is a member of ITA’s Explorers and Developers Group.