Andrada Mining: An Emerging Bulk Lithium Producer with Significant Upside

• Andrada Mining has produced its first bulk lithium concentrate from a pilot test program, aiming for consistent lithium production in the near future.
• The lithium they're producing is "petalite," which can serve both the industrial and battery grade markets and is primarily used in glass and ceramics due to its purity.
• The company is in the process of identifying audiences for the bulk samples they produce, aiming to determine whether they should target the battery or ceramic/glass market more heavily.
• Andrada Mining recently announced the appointment of Barclays to help find a strategic partner that will provide technical expertise and market access.
• The company is well-financed with support from the Development Bank of Namibia and aims to complete the partner search by Q3 of this year.

About Andrada Mining

Andrada Mining is a mining company focused on producing tin, tantalum and lithium from its operation in Namibia. The company is listed on the London AIM exchange and has been operating a tin mine and processing facility for several years. Recently, Andrada has been working on developing processes to extract lithium from waste rock at the site, putting it on the path to become a major lithium producer.

Interview with Anthony Viljoen, CEO of Andrada Mining

Bulk Lithium Production Progressing Rapidly

In the interview, CEO Anthony Viljoen discussed Andrada's recent progress on producing bulk lithium concentrate from its pilot program. After extensive test work over the past year to optimize the process, Andrada was able to produce its first bulk lithium concentrate sample on spec.

This is a major milestone, as Andrada can now provide samples to potential partners and customers for testing, putting it firmly on the path to lithium production. The next steps will involve moving the test work to the on-site pilot plant that is nearing completion. Commissioning of the plant is expected in July 2022, after which Andrada will be able to conduct further optimization and potentially begin producing small amounts of lithium.

According to Viljoen, the focus is on producing lithium petalite concentrate, which is suitable for both the industrial (ceramics, glass) and battery-grade lithium markets. Petalite sells at a healthy premium of $1500-2000/tonne currently, meaning there is significant potential margin in lithium production for Andrada.

Strategic Partner Search Underway

Recognizing the technical challenges of producing battery-grade lithium and the need to secure offtake agreements, Andrada has engaged Barclays to run a strategic partner search process. The goal is to bring on a partner who can provide technical expertise for lithium refining and support securing long-term customers.

Several global companies have expressed interest, and the process is expected to conclude in Q3 2022. Importantly, Andrada is not looking to sell the project, but rather bring on a collaborative partner to derisk the lithium opportunity. A strategic partnership should significantly enhance the prospects for Andrada to become a major lithium producer.

Near Term Cash Flow from Tin Production

An important aspect of Andrada is that tin production from its tailings retreatment project provides significant cash flow in the near term. This reduces dilution risk and funds the investment in lithium production expansion.

The company is forecasting $1-1.5 million per month in tin revenue, or $12-18 million annually. With tantalum circuit commissioning scheduled for June, Andrada expects another $2-2.5 million per month from tantalum sales.

This base business means the company is fully funded for its near term plans through existing cash and a debt facility from the Development Bank of Namibia. Tin profits will support the lithium growth strategy, providing investors with de-risked exposure to the high-upside lithium opportunity.

Conclusion

With tin cash flows funding operations and expansion plans fully financed, Andrada Mining provides investors with a unique opportunity to gain exposure to the lithium market from an emerging producer. The current focus is demonstrating Andrada's capability to produce lithium concentrate at scale and bring on a strong strategic partner.

Within a year, Andrada could be delivering significant volumes of lithium production into a market expected to be in deficit for some time. The company expects to announce a detailed valuation in the coming months, which will shed further light on the potential upside. For investors looking to capitalize on surging lithium demand, Andrada Mining presents a de-risked production story and substantial long-term growth potential.