Andrada Mining (AIM: ATM; OTCQB: ATMTF) has released its operational results for the year ending 29 February 2024. The company continues to ramp up production with a 51% increase in tin-in-concentrate production from 2022, and the first tantalum concentrate produced in the final quarter.

The Uis mine in Namibia, owned and operated by Andrada, began production of tin concentrates in late 2019 and has since been ramping up production. Production in the fourth quarter of the year ending 29 February 2024 increased to 231 tonnes contained tin, up 14.4% from Q3, in line with a 4.3% increase in ore processing to 238,022 gross tonnes. Tin-in-concentrate production stood at 887 tonnes for the 12-month period, up from 586 t in the previous reporting year. A 2.8% decline in grade of ore processed was offset by improved recovery, rising from 66% to 72%. In Q4 the company achieved an average tin price of $26,125 per tonne Sn.

Average tin concentrate grades improved to 62% from 58% the previous quarter, with the introduction of the tantalum separation circuit in late 2023. The circuit enabled the production of 7.4 tonnes of tantalum concentrate in Q4, at a current production rate of 48 tonnes per annum, expected to increase to 83 tonnes per annum after implementation of an ore-sorting process.

Andrada’s lithium pilot plant produced approximately 40 tonnes of saleable, technical-grade lithium concentrate, with production rates anticipated to increase to 100 tonnes per month by the end of March 2024. The company reported it is exploring offtake agreements for this material within the industrial and battery chemical markets.

All unit costs remained at the lower end of management guidance during the year and decreased by over 10% in Q4 due to higher tonnages and improved efficiencies. C2 operating cash costs (which includes cash costs of production, selling expenses, smelting, and royalties) decreased in Q4 by 13% to $18,775 per tonne Sn, for an annual average cost of $20,173 per tonne Sn, while the all-in sustaining cost (AISC) decreased 13% quarter-on-quarter to $26,223 per tonne Sn.

Looking forwards, the company highlighted recent investment from Orion Resource Partners. The royalty is to be used to expand production at the existing tin processing plant to 2,600 tonnes per annum (1,600 tpa contained tin) through the installation of a pre-concentration circuit incorporating ore sorting technology.

Our view: The completion of the tantalum extraction circuit will benefit the company in both higher quality tin concentrates and the additional revenue (estimated to represent a 3-5% increase) from the sale of tantalum concentrates. Andrada’s progress with its lithium pilot plant also poses a significant opportunity for growth. We look forward to seeing continued optimisations and expansions at Uis.