Andrada Mining says its N$100 million senior debt facility from the Development Bank of Namibia (DBN) is expected to reach a contractual close at the end of May 2023 with the potential first drawdown in June 2023.
The DBN loan to be repaid over 10 years was announced last year following approval by the DBN credit committee and board.
The loan is expected to boost production at Andrada’s Uis tin mine to a million tonnes per year and improve processing efficiency and reduce unit costs.
“The company is pleased to confirm that the senior debt facility for N$100 million (US$5,5 million) with the Development Bank of Namibia, as detailed in the announcement of 5 July 2022 (DBN Facility) is now on track for contractual closure at the end of May 2023, with initial drawdown in June 2023. A further update will be provided in the next few weeks,” the AIM-listed mining company said.
Under the terms of the loan, there will be no interest or capital repayments for the first 12 months. Thereafter, interest accrues at the Namibian prime lending rate.
The DBN funding comes after the Alternative Investment Market-listed miner in April announced that it had increased its Standard Bank working capital facility by N$40 million (£2 million) to N$75 million to buffer the increased capacity against any unexpected disruptions in global supply chains or shipping delays.
Andrada at the time had said it expects to generate over N$33.5 billion in revenue in the next five years from the expansion of its Uis mine in Namibia.
Andrada said the conclusion of the US$25 million funding facility with Orion Global Resource Fund remains subject to the finalisation of an intercreditor agreement with other lenders.
“The conclusion of the Orion Global Resource facility is contingent on an intercreditor agreement between Orion and the senior lenders Development Bank of Namibia and Standard Bank,” the company said.
The announcement by the company comes after it achieved the first production of lithium concentrate, in the form of a high-purity petalite concentrate, from an off-site pilot test programme.
The off-site test programme was launched in the first quarter to investigate the metallurgical potential of the pegmatites from Andrada’s three mineral licence areas around the town of Uis.
“We are extremely pleased to announce the production of our first saleable bulk lithium concentrate. This milestone follows the previously reported successful laboratory scale test work and we believe it moves us one step closer to full-scale lithium production,” Andrada’s Chief Executive Officer Anthony Viljoen said.
The company said the construction of an on-site lithium pilot plant is on schedule for completion in June, with commissioning to follow in July.
“With the completion of the on-site pilot plant imminent, we intend to expedite bulk pilot test work on all our mineral licenses. Simultaneously, we plan to increase pilot-scale production of lithium concentrate for testing with potential off-takers to achieve initial lithium sales,” he said.
The pilot plant processing capacity will be 20 tonnes per hour with minimum annual production target of 2,400 tonnes and an upper annual production target of 10,000 tonnes.
This facility could generate annual revenues of between N$100 million US$5 million to N$400 million (US$20 million) at the upper levels of production assuming an average grade of 4.0% Li2O and an average petalite price of US$2,000.
Andrada Mining is an African tech-metals mining company with a portfolio of mining and exploration assets in Namibia and is dual-listed on the Namibian Stock Exchange.
