Mr. Maritz Smith reports

ALPHAMIN ANNOUNCES Q3 OPERATIONAL AND FINANCIAL UPDATE/ MPAMA SOUTH DEVELOPMENT PROGRESS

Alphamin Resources Corp. has provided the following update for the quarter ended September, 2023:

• Tin production of 3,104 tonnes for the quarter, in line with the previous quarter;
• Third quarter 2023 EBITDA (earnings before interest, taxes, depreciation and amortization) (3, 4) guidance of $38.3-million (U.S.), up 8 per cent from the previous quarter;
• Mpama South development projected to increase annual tin production by 60 per cent progressing well;
• Additional debt facilities secured.

Operational and financial performance

Contained tin production of 3,104 tonnes for the quarter ended September, 2023, was in line with the previous quarter. Tin production of 9,442 tonnes for the nine months ended September, 2023, exceeded the run rate to achieve market guidance of 12,000 tonnes for the year ending December, 2023. The run-of-mine and crushed ore stockpiles ahead of the processing plant were at record levels at quarter-end, being 30,393 tonnes at an average tin grade of 4,79 per cent (second quarter: 27,439 tonnes at 6.74 per cent).

Sales volumes of 3,111 tonnes of tin for third quarter 2023 were slightly higher than the previous quarter and averaged a tin price of $26,557 (U.S.) per tonne (second quarter 2023: $25,587 (U.S.) per tonne).

Guidance for all-in sustaining cost per tonne of tin sold is $14,812 (U.S.), 6 per cent above the previous quarter. Approximately half of the AISC cost increase relates to the timing effect of sustaining capital expenditure. The remaining variance in AISC follows the impact of the higher tin price on off-mine costs, higher diesel prices and a 7-per-cent increase in underground development metres at Mpama North. The higher underground development rate at Mpama North is expected to increase developed ore reserves and improve mining flexibility.

Stable production and sales volumes at the slightly higher tin price resulted in expected EBITDA of $38.3-million (U.S.) for the quarter ended September, 2023 (Q2 2023: $35.4-million (U.S.)).

Alphamin's unaudited consolidated financial statements and accompanying management's discussion and analysis for the three and nine months ended Sept. 30, 2023, are expected to be released on or about Nov. 17, 2023.

Financing structure and capital allocation

Alphamin's vision is to become one of the world's largest sustainable tin producers. From a capital allocation perspective, the board considers the combination of investment in growth, continuing exploration and a high dividend yield, and a robust value proposition. From a fiscal year 2023 capital allocation perspective, the financing of the Mpama South expansion project, Democratic Republic of the Congo income tax payments and shareholder distributions remain the priority.

By quarter-end, the company had spent $99-million (U.S.) of cash resources on the Mpama South project, of which $24.5-million (U.S.) was spent in third quarter 2023. The project is forecasted to be substantially completed within the budget of $116-million (U.S.).

The company has signed an amended and restated credit agreement to raise an additional $10-million (U.S.) in senior debt finance. The additional financing is subject to certain drawdown conditions. Under the amended and restated credit agreement, the current senior debt balance of $5-million (U.S.), together with the new financing of $10-million (U.S.), will be repayable over two years commencing in January, 2024. Under the revised terms, there is no requirement for political risk insurance or a debt service reserve account, and there are no restrictions on dividends, provided covenants have not been breached. The terms are otherwise substantially the same as the existing facility. In addition, the company's banking institution in the DRC has increased its short-term facility by $15-million (U.S.) to $55-million (U.S.). The additional debt facilities provide bridging finance toward the previously reported high final and provisional DRC tax payments during 2023 not expected to repeat in 2024, as well as additional liquidity optionality while the Mpama South project approaches completion.

In late September, 2023, a bridge on the primary export/import route was damaged. As a result, inbound and outbound trucks had to be rerouted resulting in longer-than-normal transit times and delays in revenue receipts. Additional road maintenance teams have been mobilized to ensure the efficient passage of inbound and outbound traffic through alternative routes which have been proved to be effective in the past. The negative liquidity impact from the damaged bridge is expected to reverse during fourth quarter 2023.

Mpama South development progress

A total of 2,448 metres of underground development at Mpama South has been completed to date, of which 980 m was achieved in third quarter 2023 (Q2: 603 m). The underground development rate increased by 64 per cent during Q3 2023 as additional underground equipment arrived on site and more development ends became available. The Mpama South adit from surface advanced beyond the previously reported area of poor ground conditions and is expected to connect with the Mpama South underground workings by early November, 2023. The year-to-date development metres at Mpama South are in line with the company's updated two-year underground mine plan to achieve the targeted tin production expansion from fiscal 2024. This plan requires approximately 1,200 m of underground development at Mpama South during the quarter ending December, 2023.

The erection of the new processing facility is progressing well; albeit, poor road conditions and the impact of the damaged bridge have delayed container deliveries by approximately three weeks. As a consequence, the commissioning of the new processing plant may be delayed to January/February, 2024.

The Alphamin project team, together with the existing site team, remains focused on operational readiness preparation. This primarily involves recruitment and training of personnel, expansion of the laboratory and accommodation facilities and infrastructure, and increasing the supply chain to meet the additional production.

The Mpama South project is expected to increase combined annual tin production from approximately 12,000 tonnes to approximately 20,000 tonnes.

Qualified person

Clive Brown, PrEng, BSc engineering (mining), is a qualified person as defined in National Instrument 43-101, and has reviewed and approved the scientific and technical information contained in this news release. He is a principal consultant and director of Bara Consulting Pty. Ltd., an independent technical consultant to the company.

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