"AfriTin [now called "Andrada Mining Ltd"] is well on the way to becoming one of the world’s largest hard rock lithium producers, with clear financing routes already laid out"
“Uis really is a once-in-a-lifetime asset,” says Anthony Viljoen, the chief executive of ATM.
He’s just [October 2022] completed a US$22.8mln fundraising to take Uis to the next stage of its development, and it looks like being quite a ride.
For many years in the latter part of the twentieth century Uis was one of the most significant mines in Namibia, and one of the most significant tin mines regionally, if not globally.
Times change, of course, and the tin price crash which put an end to tin mining operations in Cornwall at the end of the 1990s was part of a broader trend which had also put paid to Uis.
But along came Viljoen and a band of young, energetic entrepreneurs a few years later with a plan to start the whole thing up again.
This they proceeded to do, much against the grain of prevailing wisdom in junior mining, which says that tin operations are best left to the big boys.
But as Viljoen says, this was a once-in-a-lifetime opportunity, and he wasn’t about to let it end up as a footnote on some mining major’s spreadsheet.
Uis is capable of delivering exponential upside, and is already beginning to prove its mettle.
Tin production is now underway. That box can be ticked, and the original marketing pitch that tin will be one of the key metals of the future economy remains firmly in place.
But there is a new twist now, one that none of the old timers would ever have predicted.
Back when Uis was first operated, no-one really had any use for lithium. But boy has that changed. Lithium remains one of the few commodities still firmly in bull market territory after all the ups and downs of recent months on the markets.
Which is good news for ATM. Because, besides the tin, and some tantalum, Uis also contains a very significant endowment of lithium.
“This resource is turning into something quite special,” says Viljoen. “It’s one of the top five tin, lithium and tantalum resources globally. Our target resource is 200mln tonnes of ore.”
Usually, when lithium, tin and tantalum are found together in pegmatite mineralisation, the structures are narrow and fairly short. But in Namibia, ATM’s orebody is hundreds of metres thick and goes on for hundreds of miles. That makes it both one of the largest standalone tin orebodies, and one of the largest standalone lithium orebodies anywhere in the world.
What does that mean? Quite simply, it means that in all likelihood the company will effectively be able to mine its lithium free of charge, with all costs borne by the sales of tin.
And, as if that wasn’t enough, it’s all happening very quickly. With production of tin already in place, the company has already cleared many of the potential hurdles that other junior start-ups face. It knows the government, it knows the logistics, it knows the geology and to a large extent it knows the processing that will be involved too.
Officially, the plan to bring the lithium into the equation is called Phase 2 of development at Uis, with Phase 1 largely completed. And if anyone doubts the significance of the foundation that ATM has laid at Uis by the completion of this first phase, consider that at one point in this past year the operation was running at around a 50% EBITDA margin.
This is a company that’s already up and running in a meaningful way, and with plans to go much, much bigger.
How much bigger? Well, first off there is the planned expansion of the resource from the existing 71.5mln tonnes to that 200mln figure. Part of the money that was recently raised will go towards completing that work, which will itself underpin further detailed economic study.
But ATM already has some idea of the parameters it’s likely to be dealing with once Phase 2 is up and running. An earlier preliminary economic assessment put the net present value of the project at US$2bn and an internal rate of return of 75%. Those figures are based around plans to process 10mln tonnes of ore per year over 14 year mine life, to produce a total of just under 275,000 tonnes of tin, 17,300 tonnes of tantalum, and 1.1mln tonnes of lithium dioxide.
Under this scenario, lithium would account for just over 60% of revenues, with annual EBITDA expected to run at over US$600mln, and margins at upwards of 64%.
These are big ticket numbers, so it’s perhaps somewhat surprising that the capital expenditure required is set at a comparatively modest US$440mln... But more to the point, as the latest round of financing indicates, the likely funding partners are already in place. Big names like Standard Bank and Orion have come on board at what for an operation like that is a relatively early stage. Why? – because they want to be able to get position when the real action starts.
And that sits well enough with Viljoen’s approach.
“We’re not going to take small steps,” he says. “We’re going to be pretty bold in what we do.”"
