29 October 2019 CORPORATE SPONSORED - MARKETING COMMUNICATION

MINING

Corporate AfriTin Mining. Share Price 3.0p Uis commissioning and the generation of first cash flow

The Uis tin mine in is moving through the commissioning phase of its

journey – all within two years of the IPO – a tremendous achievement. After Reuters/BBG ATM.L / ATM LN commissioning and streamlining the tin circuit, AfriTin will turn attention to its Index FTSE AIM tantalum by-product and a feasibility study into an expansion of production – Sector Mining potentially up to 5kt/yr of tin concentrate, making it a tin producer of global Market Cap £20m significance. A robust medium-term outlook for tin and the potential to produce Shares in Issue 644.2m multiple by-products (lithium, muscovite mica, beryl etc) through an enlarged plant NAV 2.3p (or series of plants) at Uis are the prizes for investors. We see fair value at 7.0p, with upside in the tin price, by-product production and options on expansion going forward.

Performance All-Share Sector An investment in AfriTin provides investors with: 1 month: -3.2% -2.5% 3 months: -2.5% -7.7%  A scalable project undergoing commissioning. After the fast track construction 12 months: 9.1% -1.3% (within 2 years from IPO), Uis is in commissioning. Phase 1 of the plant is expected High/Low 4.5 / 2.9 to produce 0.7kt/yr of high-grade tin concentrate. After the completion of a full

feasibility study, a Phase 2 expansion (~US$60m capex) could produce over 5 times this amount and benefit from the obvious economies of scale.

 Significant upside Besides the potential for Uis expansion and a higher tin

price, we see 1) the potential for Uis to produce tantalum and other by-product

credits (subject to further work); 2) Using developments at Uis to move into former producing areas elsewhere in Namibia; 3) use the revenues generated from full Last Results Results to Feb 19 – July 19 production at Uis to move into other African tin belts. Uis will be a company-making Next Results Interims to Aug 19 – Nov 19 asset. Next Event News on commissioning at Uis

 An experienced management team. Management has a good mix of capital

markets and operating experience together with access to full geological and technical expertise. The team on the ground in Namibia has a history of operating in Namibia and has established both good local relationships and managed the 4.5 4.3 build of the Phase 1 plant – all within 2 years of IPO. 4.1 3.9 3.7  Exposure to the tin market. AfriTin is the only pure play tin producer on AIM. 3.5 3.3 The fundamentals for tin are robust, despite a short-term production surplus. With 3.1 2.9 stocks at historically low levels, we see an increased requirement for new sources 2.7 2.5 of production to satisfy expected demand. Uis will produce a clean, high-grade tin

concentrate for sale to traders and smelters and for which there is demand.

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Nov-18 Dec-18 Aug-19 Sep-19 May-19  Simplicity and location de-risks Uis. Simple geology, productive mining and well understood standard processing are all key advantages. We feel that Namibia Source: © 2019, S&P Global Market Intelligence is a good place to operate and build, being democratic and politically stable.

 We see fair value in AfriTin at 7.0p/sh with our fair value based on a risked DCF Analyst Paul Smith on our estimates for the economics of the Phase 1 and Phase 2 projects. Near +44 (0)113 394 6609 term cash flow from Uis will act as a catalyst for a revaluation and over the medium [email protected] term we see further expansion in the production of tin (and other by-products), a

reduction in operating costs and an increase in cash flow which will flow through Marketing Communication to our fair value as production begins. In our opinion, the current share price is This document has not been prepared in accordance with legal requirements designed to promote the covered by the value in the Phase 1 plant which will generate ~$3m operating cash independence of investment research. Please refer to flow per year. important disclosures towards the end of this document.

Under the Markets in Financial Instruments Directive II (“MiFID II”), this research is paid for by the subject issuer WH Ireland Limited, 24 Martin Lane, London, EC4R 0DR, tel. 020 7220 1666 as declared in the disclosure and disclaimer pages of WHIreland is authorised and regulated by The Financial Conduct Authority and is a member of The London Stock Exchange. Important disclosures and certifications regarding companies that are the subject of this report can be found within the disclosures page this document. at the end of this document.

COMPANYAFRITIN MINING NAME

AfriTin Mining. Uis commissioning and the generation of first cash flow .... 1 Investment Case – Commissioning Uis ...... 3 Progress since IPO ...... 4 Valuation ...... 5 Valuation approach ...... 5 Uis Cash flow ...... 5 Further drivers for the AfriTin share price?...... 7 Key Risks and Other Considerations ...... 8 AfriTin ...... 9 Uis (Namibia – 85% AfriTin) ...... 9 Location ...... 9 History ...... 9 Ownership ...... 9 Geology...... 10 Resources ...... 10 Infrastructure ...... 11 Mining ...... 12 Processing ...... 12 Mokopane ( – AfriTin 74%)...... 14 Ownership ...... 14 Geology and Resources ...... 14 2014 Scoping Study ...... 14 Tin market outlook ...... 15 Market overview ...... 15 Outlook and price ...... 15 Tin has many uses ...... 15 AfriTin Team ...... 16

Figure 1. Striking recognition of pegmatites in the country rock (V12 pegmatite – white rock in the picture)

Source: WH Ireland Research site visit

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Investment Case – Commissioning Uis Simple story and unique tin focus listed Simple Story AfriTin is a tin focussed development company on the London AIM market on the AIM market operating in a non-conflict country. It is currently commissioning its first project in Namibia at Uis. It will seek to become a significant tin producer by firstly expanding in Namibia, and then adding projects (and production) from other countries in Africa to become an African producer of scale and an African “tin champion”. We see fair value in AfriTin at 7.0p/sh Staged expansion at Uis to monetise Uis, which is currently being commissioned, is potentially a large project and is the potential scalable Uis is being commissioned and has recently demonstrated the scale possible with a revised and JORC compliant resource statement, both validating the historical estimates and endorsing AfriTin management’s faith in the area.. The totality of the available pegmatite is the potential resource allowing for bulk mining with little or no grade control required in the open pits. The footprint of the mining area is significant and recent resource work has shown the scale of the by-product potential. Risk reduced on historical experience With a long history of production at Uis, we believe that the risks are small – continuity of the pegmatites is known, mining history, slope stability is visible and measurable, grade variation understood, recovery history (high), cleanliness of product (good) etc. Favourable tin price outlook Good fundamentals for tin the fundamental future for the tin price looks positive as more new hard rock mines are required to supplement supply with the proportion of alluvial tin

production falling, resource depletion in other areas and with demand forecast to remain We use a long-term tin price of strong. We see a steady increase in demand as tin is increasingly used in consumer $21,000/t in our analysis electronics and now in Electric Vehicles (EVs). Recent price changes are a function of the whole complex of metal markets under pressure from uncertainty due to global trade anxiety. Recent small falls in the price of tin are linked to short-term production surplus, but stocks remain stubbornly low and the medium-term outlook is strong.

Figure 2: Tin Price

35,000

30,000

25,000

20,000

15,000

10,000 Tin Price (LME Cash, $/t)Cash,Price(LME Tin

5,000

0 May-08 May-10 May-12 May-14 May-16 May-18 May-20

Source: WH Ireland Research, indexmundi

Other metals could provide a revenue Other metals likely to improve revenues. Tantalum can be produced from the pegmatite stream and we believe it will provide a useful by-product credit, accounting for perhaps one fifth of

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the revenues generated at current prices. However, there are also indications that lithium (and other metals and minerals) could also be recovered. Not a priority in Phase 1, and returns from Uis are robust on tin alone, but there are other potential revenue streams to improve economics. Operation will use simple well Simple, well-understood techniques to recover tin Gravity recovery using Tables and understood recovery methods Spirals, and the addition to the new plant of a Dense Media Separation (DMS) circuit (Figure 9) which should improve recovery of coarse and medium sized cassiterite. High recoveries are expected and a clean, high-grade concentrate produced which will be in demand by smelters and trading companies – AfriTin currently has an offtake with Thaisarco. AfriTin uses conservative assumptions in its models, in our view, and subject to metallurgical test work we see potentially higher recoveries to those advised by AfriTin at this stage. Simple, “visible” geology Simple geology – The large, homogenous pegmatites are easy to see and very distinct from the host rock. Coarse-grained, easily recoverable tin – Uis formerly produced a 65% tin concentrate with recoveries in excess of 80%. Considerable exploration potential Undetermined exploration potential at Uis Current resources are all close to the surface and no deep exploration and resource evaluation has been carried out. There are also several known pegmatites which have not yet been properly explored and AfriTin recently announced a considerable number of as yet untested tin-bearing pegmatites in the immediate area. In fact the whole region is prospective and AfriTin will have first mover advantage in this historically important mining area. Large projects operated by major Good jurisdiction Namibia is believed to be low/moderate risk. Other mining companies mining companies operate freely in have demonstrated that you can do business in the country and mining revenues account Namibia for nearly 25% of the country’s income. Recent surveys place Namibia high in terms of investment attractiveness, policy perception and transparency in Africa. African tin in a non-conflict region There is tremendous potential for tin in Africa away from the so-called conflict regions in Central Africa. Namibia is a good jurisdiction to work in and there are plenty of examples of large companies operating without issues in the country. Infrastructure at Uis in place There is available infrastructure in the area Because of the previous operation at Uis good infrastructure still remains in the area with good transport links, water utilities and the remnants of a local workforce. This is an area which could be made prosperous again by the restart of the mining operations. Other deposits further down the track Management ambition AfriTin has an aspiration to be an “African tin champion” and bring across Africa together some of the many opportunities to mine tin on the Continent under one roof.

Progress since IPO

AfriTin had prepared well before the IPO and hit the ground running. From IPO to commissioning of a new plant in less than two years is a tremendous achievement – especially as construction has been planned and overseen internally – demonstrating the technical competence of AfriTin is at the highest level. Work has since been going on in the background on the bigger prize at Uis which is the expansion – to become a producer of scale. In discussion with AfriTin it is unknown yet whether a decision has been taken to expand in one mega-plant or in smaller incremental steps. This, and the design of the by-product circuits, will be crucial to the feasibility study into the large Phase 2 plan for Uis.

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Valuation

Our Fair Value for AfriTin is 7.0p Our fair value for AfriTin is 7.0p. The prize is the larger expansion and the production of by-products (subject to metallurgical testing). Unrisked our fair value would be 15.7p/sh on the larger 3Mt/yr plant. This fair value is conservative and includes no upside from additional potential by-product revenues. Valued on SOTP basis Valuation approach We value AfriTin on a SOTP basis using a DCF for the first phase plant with an addition for the larger, second stage plant. We add in an estimate of cash and deduct an allowance for corporate overhead over the next three years. We currently include no contribution from other AfriTin projects in Namibia or South Africa as we understand Uis to be the main focus at the moment. We also do not yet include any allowance for the production of by-product credits apart from tantalum. The upside for the production of a lithium petalite concentrate or mica (or other known potential by-products) is all blue sky upside. AfriTin has prudently set development at Uis up for a scaled approach to reduce risk and allow for choices in funding for the larger plant – we believe much of the capital required for the second phase can be sourced from debt, or loans from offtake partners / equipment manufacturers, which will reduce the amount required from an equity contribution. AfriTin is fully funded for commissioning the first phase plant and has a working capital and VAT facility arranged with Nedbank Namibia (£2.0m and £0.4m respectively). While no economic data has been published by AfriTin on the project we have made assumptions on the costs and revenues based on our understanding of similar operations and used country comparable metrics in discussion with the AfriTin technical team. These are subject to change as more is learnt from the Uis plant when in operation and so we have sensibly risked our NPV.

Table 1: AfriTin Valuation (US$m*) Valuation Approach Valuation Valuation Owned Risk Valuation US$m £m** GBPp/sh

Uis – Phase 1 DCF - 10% 19.6 15.6 85% 80% 1.7 Uis – Phase 2 DCF - 10% 129.3 # 103.4 85% 40% 5.5 Mokopane - - 74% 100% -

Cash & Cash Equivalents*** 1.3 1.0 100% 100% 0.2 Corporate Costs 3yr DCF-10% (1.7) (1.4) 100% 100% (0.2)

WH Ireland Valuation 17.5 7.0

Source: WH Ireland Research # * Subjective risk The NPV10 for Phase 2 minus the NPV10 for Phase 1 ** WHI est FX US$:£ = 1.25:1. (Spot Oct 2019), *** WHI est Oct 2019.

Our DCF for Uis phase 1 is the initial plant to produce 0.7kt/a tin concentrate over a period of twelve years. Phase 2 is the initial plant plus a US$60m (WHIe) expansion project in Year 5 to produce 5.3kt/a tin concentrate for 25 years (DCF is shown in Table 2). We risk the Phase 1 project at 80% of NPV purely for commissioning risk, with Phase 2 risked at 40% of NPV following the recent resource declaration and the obvious requirement for funding. Uis Cash flow There is a lot of historical data that shows what could happen at Uis if the full development option of a mine processing 3Mt/yr is realised. We have modelled the potential cash flow from such an operation (Table 2) using benchmarked inputs from our understanding of

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similar operations and in discussion with AfriTin and arrive at an unrisked NPV10 of ~$149m for 100% of the project.

Table 2: DCF for Uis incorporating initial and full plant production

WH Ireland Model Cost Inputs 2019 2020 2021 2022 2023 2024 2030 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 12

Mine Life – 25 years at full 3Mt/yr Ore milled kt 75 450 500 500 1500 2800 3000 capacity. This is seen as a conservative Waste Mined kt 37.5 540 750 750 3000 7000 3600 minimum life given the known pegmatites Grade Sn % 0.136 0.136 0.136 0.136 0.136 0.136 0.136 in the area and will use all of the Grade Ta % 0.010 0.010 0.010 0.010 0.010 0.010 0.010

Measured, indicated and Inferred Sn Conc % 60.0 61.0 61.0 62.0 64.0 64.0 65.0 Resources. From a site visit we have Sn kt 0.1 0.4 0.4 0.4 1.4 3.0 3.3 seen the potential from the other Ta Conc % 30.0 30.0 30.0 30.0 30.0 30.0 30.0 pegmatites in the area. Ta Conc kt 0.0 0.0 0.0 0.0 0.1 0.3 0.3

Net Revenue $m 0.9 8.5 9.0 9.9 32.1 68.7 76.0 In our model full project construction to begin in late 2022 after commissioning of Uis operating cost $/t ore 11.1 12.2 12.7 12.0 12.8 13.2 11.2 the initial plant and a full feasibility study. Uis operating cost $m (0.8) (5.5) (6.3) (6.0) (19.2) (36.8) (33.7)

This could be accelerated by AfriTin with Royalty $m (0.0) (0.3) (0.3) (0.3) (1.0) (2.1) (2.3) the earliest perhaps in 2021 with full EBITDA $m 0.0 3.0 2.7 3.9 12.9 31.9 42.2 expanded production then in 2022. Depreciation $m (1.0) (1.5) (1.5) (1.5) (3.5) (6.5) (8.0) EBIT $m (1.0) 1.5 1.2 2.4 9.4 25.4 34.2

Grade of tin from historical operating Interest $m ------experience, and the recently declared Tax $m ------(12.0) resource. Expansion Capex $m - - - (10.0) (30.0) (20.0) - Sustaining Capex $m - (0.5) (0.5) (0.5) (0.5) (0.5) (2.0) Recovery of 82% tin and 37% tantalum Add back in Deprecn $m 1.0 1.5 1.5 1.5 3.5 6.5 8.0

expected (WHI est.) at full production. AfriTin Cash Flow $m 0.0 2.5 2.2 (6.6) (17.6) 11.4 28.3

Capital to production at enlarged phase 2 NPV5 $268m plant of $60m (WHI est). Capital for initial NPV10 $149m plant of ~$7m in 2018/2019 – treated as NPV15 $89m

a sunk cost. Source: WH Ireland Research. NOTE GAP IN YEARS Treatment and refining charges and payabilities in line with known benchmarks for tin and tantalum We show the production of tantalum in our model, but this has yet to be fully demonstrated. concentrates and intermediates. We assume recovery of ~35% tantalum at full production. Obviously any improvement on this would improve the returns considerably. High project returns are therefore geared to Operating costs – fall ($/t terms) as tantalum, but less so than for the tin price (Figure 2) and the project is robust enough to economies of scale are realised. return to shareholders on tin alone at our tin price forecast. Stripping ratio rises from 0.5x at start of Uis mine life to 1.5x towards the end of An increase in the tin price to $25,000/t, a level reached (and exceeded) a few years ago our 25 year time frame (all WHI est.). (Figure 2) would raise our NPV for 100% of the project to $213m with a corresponding increase in fair value. Prices – assumed $21,000/t tin and $150,000/t tantalum (WHI est.). Tin recovery is also a big determinant on value. Historically 80% tin recovery was achieved and we expect this level can be targeted given the introduction of a DMS plant into the circuit Current prices (Oct 2019) are $17,000t – especially when any expansion has been realised. for tin with tantalum in the region of $150,000/t The potential for lithium production would add additional incremental revenue Despite not yet including lithium production for our projections from Uis, lithium could be a Funding for Phase 2 debt (8% interest) further source of revenue in an expanded plant – with every opportunity to prove the concept and offtake – 70:30 (WHI est). Debt paid in the Phase 1 plant with only a modest capex outlay. Lithium occurs in the form of the back straight line over 4 years mineral petalite in the pegmatites (a feldspathoid - LiAlSi4O10) which has a market when concentrated as a source of lithium. It typically sells for about half the price of spodumene – the most common lithium mineral sold in concentrates. At a resource grade 0.6%Li2O NPV10 – Phase 2 $149m (Table 4) and a recovery of 60% (WHIe), at full scale Uis could produce 270kt/a of a 4% petalite concentrate. Assuming a net sale price (net of freight) of $150/t, lithium production could add an additional $35-$40m to net revenues to Uis bottom line – at a low incremental cost. By-product recovery from already mined, crushed and sized ore can be an important driver of future revenues.

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Despite only listing in late 2017, AfriTin is fast tracking its construction as promised at IPO – a rarity in delivering on its promises to the capital markets.

Figure 3: Sensitivity to our Uis DCF

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0.0 -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% Diff

Tin Price Op Cost Cap Cost Ta Recov Sn recovery

Source: WH Ireland Research

Further drivers for the AfriTin share price? Upside through the development cycle: The catalysts for AfriTin are: firstly the delivery of its staged project plans at Uis; secondly the proof of recovery of by-products; then thirdly by potential M&A opportunities within Resource definition Africa; and finally we see the real possibility of an increase in the tin price further than we Demonstration of mining and have shown in our long-term price of $21,000/t. metallurgy We are also struck by how scale plays an important part in returns at Uis. Low grades mean Proof of concept that economics of scale can play an important part in any future returns. Capital cost is not a driver of returns (Figure 3), so any small additional increase in capital cost to produce Producer premium more tin could generate further returns for AfriTin – a sensible balance on scale and logistics M&A opportunities in wider Africa of mining pegmatite could be a key determinant in the future potential production rate. AfriTin has a firm plan to phase expansion of the Uis tin project. From the current plan for 0.7kt/yr tin concentrate to a full plant at an expected 3Mt ore/yr throughput producing >5.0kt/yr tin concentrate and becoming a producer of scale (Table 2). Once Uis is managing itself and is in steady-state production, AfriTin will be free to turn its attentions to the Mokopane project in South Africa. However, at this stage, AfriTin will also be the only London-listed tin-focussed company and could look to expand its footprint initially in the immediate region in Namibia to other historic mine sites or to the rest of Africa where we see tremendous potential, in Central Africa in particular. We are firmly of the opinion that Uis is scalable and will be the company maker for AfriTin.

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Key Risks and Other Considerations

Investing in AfriTin does carry certain risks – many in common with similar companies – and we highlight the most significant risks as we see them below. Low grade but high recovery Projects are low grade – but are at the surface, visibly distinct from the host rocks and anticipated. Tantalum (and other by- have demonstrated a history of operation and recovery. Tantalum credits could increase products) an important opportunity the equivalent tin grade. Tantalum will be 6% of the production by weight (Ta grades ~0.01% in the pegmatite), but with tantalum prices currently in the $150,000/t range versus

tin at $21,000/t in our model, tantalum could provide over 15% of the revenue (depending on grade, recovery and offtake contracts). We view the grade of the orebody as a low to moderate risk but one that can be managed by price, by-product metal production, plant throughput and the experience of the past. Capital markets – a current issue faced by the junior mining sector is access to capital. AfriTin will need capital to complete the proposed expansion at Uis. However, AfriTin may Capital markets are difficult for junior have options as it will be a producer rather than a development or exploration story. It also explorers and developers – other forms has a robust plan for revenues, building up scale as it demonstrates its concept essentially of funding may be available derisking any further capital inputs. There may be offtake or equipment manufacturer funding available for the clean, high-grade product from Uis. Namibia not believed to be a risk for Location – Operating in Namibia is believed to be a low risk. Other mining companies have mining demonstrated that you can do business in the country and mining revenues account for nearly 25% of the country’s income. Notable mines include: 1) Skorpion zinc mine and smelter (Vedanta), 2) Rössing uranium mine (Rio Tinto), Namdeb diamond production (De Beers), 4) Rosh Pinah zinc-lead mine (Kumba Resources), 5) Husab uranium mine (China General Nuclear Power Group) and 6) Copper mines operated by Weatherly International. Some of these are globally significant operations. Services – Water will always be an issue in deserts. Borehole tests show sufficient water for the Phase 1 plant and AfriTin is already looking at sources of water for phase 2 which are believed to be deliverable. We see the availability of water as a low risk to the operation. Power is another low risk – while not yet connected to the grid, this will be in place by the time of steady-state production. As there is only coarse crushing and pumping power, consumption is relatively low, but with the cost of diesel generation vs grid power roughly 4:1, access to grid power will certainly benefit the economics. Namibia economy strongly linked to Exchange rate risk – The Namibian Dollar (NAD) and South African Rand (ZAR) have a that in South Africa – exchange rate fixed conversion rate (1:1) and so operations in Namibia are closely linked to economic risk changes in its larger neighbour to the east. The South African rand halved in value against the US$ from 2013 to the beginning of 2016 from 8:1 to 16:1. The value of the Rand remains volatile and is currently in the range 14 - 15:1. Continued political uncertainty and poor economic growth in South Africa will continue to affect the exchange rates for both countries. This does have potential cost benefits in dollar terms however, as much of the mining services and labour can be found domestically and within South Africa. Exposure to the future tin price Commodity prices – Uis will mostly be exposed to tin price risk. We have a favourable opinion on the future for the tin price as more and more new hard rock mines are required to supplement supply as the proportion of alluvial tin production falls and the recent production outflow from Myanmar drops. Empowerment was an issue in Resource nationalisation Namibia has recently cancelled an empowerment process, Namibia – and could be again, but is similar to that of its South African neighbours, called the New Equitable Economic believed to be a low risk. Empowerment Framework bill (NEEEF). This had previously required businesses to ‘sell’ 25% of a company to disadvantaged communities. However, this requirement has now been dropped as the President said it would likely result in capital flight if enacted. There is always an ongoing risk that a change in government could bring this bill back to the table, but we believe the risk to AfriTin is low at this time.

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AfriTin AfriTin was spun out from Bushveld Minerals (AIM:BMN, NA) which is focussing on its vanadium (titanium, iron) projects on the Bushveld complex in South Africa. Bushveld still retains over 8% holding in ATM and has provided logistical and financial support. AfriTin aims to become an “African tin champion” pulling together a stream of development tin projects throughout Africa. It starts off initially with its flagship Uis tin project in Namibia together with the smaller Mokopane project in South Africa. Much of our commentary is based on the Uis tin project in which we see the majority of the near-term value.

Uis (Namibia – 85% AfriTin) Location Uis is in the in North West Namibia and consists of 3 full scale mining licences: ML129, ML133 and ML134. The licences surround the town of Uis which lies within licence ML134. Uis is 377km by road north west from and 241km north east from on a variety of sealed, dry and salt pan roads. Figure 5: Location of pegmatites- Licence Figure 4. Location of the Uis tin project leases ML 134

Source: WH Ireland Research, AfriTin History The Uis tin project is a former operating tin mine and was at one time the largest hard rock tin producer in the world. Tin in the project area (at ML134) was discovered in 1911 with intermittent production up until the end of the 1980s. The mines in the area generally did not close as a result of resource depletion, but rather as a decline in performance against the tin price crash in 1985. Ownership AfriTin owns 85% of the Uis tin deposits with the rest held by the “Small Miners of Uis” which is a government-owned entity to promote small-scale mining throughout Namibia.

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Geology The tin (and tantalum, beryllium, lithium) minerals are hosted within large pegmatites emplaced into metasediments of the Upper Damara Supergroup. The Uis belt pegmatites are classified into the North, Central and Southern pegmatites (Figure 6) and are white rocks visibly distinct from the host metasediments (Figure 1). The pegmatites contain quartz, potassium feldspar, albite and muscovite with variable quantities of cassiterite (Sn), columbite-tantalite (Nb and Ta), tourmaline, beryl (Be) and various lithium minerals (petalite, amblygonite and spodumene). The pegmatites are coarse (mm to cm sized crystals) with some cassiterite crystals > 5mm in size (Figure 7).

Figure 6. Pegmatite Belts

Source: WH Ireland Research, AfriTin

Resources Recent drilling confirmed the tonnage After a recent drilling programme by AfriTin (26 holes for 4.4km of diamond drilling) the and grade of the pegmatites to be company has been able to establish a new, JORC compliant resource for Uis calculated by mined in the early stages at Uis. CSA Global over the V1/V2 pegmatites, which forms the basis for planned production. Twinning holes has also enabled the inclusion of data from previous ISCOR drilling (141 holes for 14.9km) and allowed for a comprehensive resource update. AfriTin has also, for the first time, produced a JORC compliant resource for some of the potential by-product elements – although the lack of historical assay data only allows for their inclusion as an ‘inferred’ resource in the same spatial and volumetric portion of the drilled pegmatite. There were no surprises for us in the revised mineral resource statement which mirrored the one carried out by SRK in 1989. Indeed, deeper extensions of the pegmatite (which widens at depth) showed a 70% increase in the size of the V1/V2 pegmatite showing the potential for further resource expansions in the area.

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There remains considerable work to do on many of the other pegmatites in the area but we are struck by the homogenous nature of the pegmatites and believe that other pegmatites surrounding the plant will have a similar grade distribution.

Figure 7 Thick V1/V2 pegmatite – pre-stripped Figure 8: V1/V2 model

Source: WH Ireland Research Source: WH Ireland Research, AfriTin

Table 3. Uis JORC Resources (2012) – Tin

Mt Sn% Sn kt contained Measured 21.54 0.139 29.9 Indicated 13.05 0.136 17.8 Inferred 36.95 0.130 47.9 Total 71.54 0.134 95.5

Source: WH Ireland Research, AfriTin,

Table 4. Uis JORC Resources (2012) – Tantalum and lithium

Mt Ta ppm Li2O% Ta kt LCE* Mt Inferred 71.54 85 0.63 6.1 1.1 Total* 71.54 85 0.63 6.1 1.1 Source: WH Ireland Research, AfriTin, *Conversion of Li2O to LCE multiply by 2.473

Infrastructure Uis has significant infrastructure. The town itself was originally built for the mine staff before being declared a village after Iscor exited the country. It is relatively close to the port of Walvis Bay, and international airports are found at both Windhoek and Walvis Bay. The major port at Walvis Bay is a natural deepwater harbour, and can be reached from Uis via the C35 and C34 roads, and is approximately 3 hours’ drive (226 km) from Uis. The town of Uis is supplied by a powerline from Nampower, the national power supplier in Namibia. A small amount of work is required to connect the new plant to the grid and we have a high level of confidence it can be completed by the end of the year.

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Water for the plant will be supplied from boreholes. Pump tests have shown a capacity of at least 7,500 l/h. There are an additional three water boreholes adjacent to the plant, as well as another four boreholes in the western portion of the ML134 licence area. Two of the older pits are currently filled with water, and this represents a significant water resource. However, it is not envisaged that this water will be required, as boreholes are expected to be able to supply sufficient water for the mine and plant. There is also a dewatering screen as part of the circuit design that will recycle the water from the plant.

Mining When Uis was in production previously, open pit mining methods were used with the miners following the pegmatites from surface down. In the 1989 SRK report a stripping ratio was calculated for the economically mineable reserve (1.5:1) with a breakeven stripping ratio calculated for the remaining resource. Many of the pegmatites dip under cover and so there will be an economic limit to open pit mining as pushbacks involve ever more increasing amounts of waste rock. That said there are many pegmatites to go after (many of which have not yet been mined and many more to be discovered). The old pits used 10 or 15m benches in ore and waste with slope angles of 60° and 44° respectively. However, considering the intervening closed years for the operation many of the open pit walls look in good shape and it may be possible to steepen some for future operations with the knock on implications for reduced waste and deeper pushbacks. The mine plan for the Phase 1 operation has 5 years of production at the initial rate and a stripping ratio of 0.8:1. But the scale of the resource demands a longer, higher production mine life.

Processing The old plant at Uis (now gone) used a combination of gravity techniques to recover a cassiterite concentrate using jigs, spiral classifiers and tables to produce a 66% Sn concentrate. Owing to the relatively coarse nature of the cassiterite, a ~80-90% liberation of cassiterite was achieved at a grind size of 1.5mm, and during operations, recoveries were typically >80% tin. AfriTin has shown that DMS (Dense Media Separation) will work well in the circuit and has replaced the jigs from the former circuit with the DMS plant. DMS is one of the simpler gravity processes used for separating minerals of different Specific Gravities and is a well- understood process. DMS combined with a fine gravity concentration circuit in the form of Spirals and Tables will form the backbone of the beneficiation plant. Figure 9 shows the configuration of the circuit for the Phase 1 plant.

Tantalite is a concentrate of the Wet High Intensity Magnetic Separation (WHIMs) will allow for the separation of a tantalum tantalite-columbite mineral. This is concentrate from the tin concentrate and means that AfriTin will then benefit from a dual also known as ‘Coltan’ income stream with less reliance on tin. We understand that the WHIMs is in place, but not yet producing, pending full commissioning of the tin circuit. tantalite-columbite is a solid solution The production of a tantalite-columbite concentrate will depend on the pegmatite processed series of the minerals tantalite - (Fe, as all pegmatites have different grades of tin and tantalum. There is no reliable estimate of Mn)Ta2O6 and columbite (Fe, tantalum content in all the pegmatites but the grades from the recent drilling showed Mn)Nb2O6 as the two end-members. tantalum grading 85ppm (0.01%) in the 2019 drilling. These are the principle ores of tantalum and niobium.

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Figure 9: Flow sheet Figure 10: Photos of the new plant

Source: WH Ireland Research, AfriTin

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Mokopane (South Africa – AfriTin 74%) The Mokopane Tin Project is a brownfield tin project containing 18.5kt JORC compliant tin resources with an average grade of 0.12%Sn on two adjacent deposits. It is situated on the Northern Limb of the Bushveld Complex and consists of one prospecting right (2205 PR), covering six farms with an area of approximately 13,422 ha. Within the licence area, numerous further targets for open pittable resources have been identified, and the company has explored and drilled two of the targets, Groenfontein and Zaaiplaats, upon which a scoping study was based and the results released in September 2014. Tin was discovered at Mokopane in 1905, and 22kt of tin in concentrate has been produced from the area. There have been several periods of exploration and drilling to define mineralisation in the area. Groenfontein and Zaaiplaats are 3km apart. Ownership AfriTin owns 74% of the Mokopane deposits. Geology and Resources The tin deposits are located in the 2.9Ga Bushveld Complex in the Lebowa Granite Suite on the Northern Limb of the complex. The Groenfontein deposit is found in the fine-grained aplitic Lease Granite lying between the roof rocks of the Rashoop Granophyre Suite and the underlying coarse red Bobbejaankop Granite. The Lease Granite occurs as a tabular sheet ~100m thick that dips at approximately 20˚ to the southwest. Mineralisation occurs as pipe-like bodies (which have largely been mined out), and as sub-horizontal disseminated low grade bodies.

Table 5. Reserves and Resources for Mokopane Projects

Mt Sn% Sn kt Groenfontein Measured* 1.2 0.179 2.15 Indicated* 1.9 0.140 2.66 Inferred* 0.9 0.134 1.21 Total 4.0 0.150 6.01

Zaaiplaats Indicated* 0.02 0.14 0.02 Inferred* 6.22 0.12 7.71 Total 6.23 0.12 7.73

Source: WH Ireland Research, AfriTin, * Cut off 0.1%Sn

2014 Scoping Study

The simple scoping study was based on a closed circuit multi-stage gravity separation plant, followed by small-scale flotation and electrostatic separation, and smelting to produce a high-purity metal. The Base Case scenario is for a ~700kt ROM operation producing ~0.7kt/yr of 99.5% tin metal from 1.4kt/yr of tin concentrate (grading 51.4% tin). In 2014, capex was put at $16.7m and operating costs at $14,200/t tin. The economics of the project (at a tin price of $21,300/t) were positive showing a pre-tax NPV of $18.0m and post-tax NPV of $10.0m, (IRRs of 49.8% and 34.6% respectively). The project is currently on hold as AfriTin explores its priority Uis asset in Namibia.

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Tin market outlook Market overview The market for tin is medium sized, mature and well-established. Tin has enjoyed a steady, growth in consumption over the years, and a long-term growth trend from 1980 to 2017 of ~2% p.a. Total consumption of refined tin grew from 341kt/yr in 2012 to 368kt/a in 2016, with global production growing from 335,000 tons to 358,000 tons over the same period (ITRI). The consistent deficit between supply and production is balanced by recycling with secondary supply from scrap. The positive outlook for tin is driven by slow but steady consumption growth and a potential under-supply. Demand is expected to grow steadily with tin’s continued use in the consumer electronics industry as a solder. Peaking production from Myanmar and decline in other alluvial districts (with volatility in Indonesia) could lead to supply disruption and an increased price. Whatever happens, there will be a requirement for more tin supply in the medium term and new hard rock supplies will have to fill the gap. We set our long-term price at $20,000/t, which is an average of the past couple of years, as a conservative long-term price. Outlook and price The tin market has been supplied from the informal sector over the past few years as consumption has been greater than yearly supply. Easy production from Myanmar is coming to an end with lower grades and resource depletion contributing to a fall in production from this source; and with continuing volatility from Indonesia, the outlook for the tin price due to potential supply disruption is good. Going forward more primary tin will be required to support the modest, but expected continued, rise in tin demand. The price has recovered from the lows of $13,800/t in January 2016 to a respectable long- term average price of over $20,000/t. We believe there is further strength in the tin price, despite the recent fall (Figure 2), on the back of supply constraints, but set our long-term price conservatively at $21,000/t to reflect uncertainty in the fall in production from Myanmar while anticipating the requirement for new supply as alluvial resources are depleted elsewhere in the world with demand growing at a steady 2%pa.

Tin has many uses

 Tin is used principally as a solder in the manufacture of electronics where it has replaced some of the lead content for environmental reasons. In 2015 this use accounted for 47% of tin demand.  Because tin bonds readily with other metals (iron, lead and zinc), it is used to coat

Solder is a fusible metal alloy to create a metals to prevent corrosion. Tinplate accounted for 15% of demand in 2015. bond between metal components – it has  There has been an increase in the amount of tin used in lead acid batteries (where to have a lower melting point than the it replaces antimony and/or cadmium) for environmental reasons. The growth in components it joins. Traditionally lead ebikes in China has seen a large increase in tin consumption in China, but also the was used, but tin is an increasingly addition of ever increasing new cars to the global fleet, all requiring SLI batteries, important component (along with has impacted demand. In 2015 lead acid batteries accounted of 8% of demand. antimony, silver, copper, bismuth and  In 2015, 5% of demand for tin was in alloys – principally with copper (bronze ~12% zinc). In general tin forms the main tin, pewter (tin, lead, copper)), but also growing uses of new alloys with niobium structural metal of the solder alloy as it (for superconducting magnets), zirconium (for use in nuclear reactors) and lead has good strength and good wetting (organ pipes) properties. Tin replaces lead in solders  “Other” applications include tin in the sheet glass making industry where glass in plumbing and electronics, with tin-zinc “floats” on molten tin, new applications associated with Li-ion batteries (for which solders used in soldering aluminium the development of an EV fleet will come to provide strong demand) and organotin joints. compounds (stabilisation of PVC, and a reducing use in biocides)

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AfriTin Team Board Members Glen Parsons – Chairman – Glen has over 20 years international experience in company building, corporate finance, treasury, operational and general management. Most recently he was CEO of Mariana Resources and before that he was Chief Development Officer and Corporate Development Officer at Mariana. Mariana Resources was sold to Sandstorm for $175m in 2017. Anthony Viljoen – Chief Executive Officer – Anthony is a mining entrepreneur and founding shareholder of VM Investment Company. He has been responsible for the identification and development of a number of mineral projects across Africa. He was the founding director and CEO of Australian listed Lemur Resources and remains a Non-Executive Director of Bushveld Minerals. Roger Williams – Non-Executive Director – Roger is a Chartered Accountant with over 20 years’ international experience in mining finance and an honours degree in French and Spanish. He was previously CFO of Randgold Resources Limited and part of the management team that transformed it from being an exploration and development company into a major gold producer. He is also currently a NED of Sylvania Platinum Limited, Alecto Minerals plc and Digby Wells and Associates. Laurence Robb – Non-Executive Director – Laurence is a respected economic geologist and is currently Visiting Professor in the Department of Earth Sciences at the University of Oxford. He has worked for over 30 years on many the great mineral districts of the African continent with his main field of expertise in granite related mineral deposits Terence Goodlace – Non-Executive Director – Terence Goodlace’s mining career has spanned more than 40 years. He is currently an independent Non-Executive Director at Gold Fields Limited and Kumba Iron Ore Limited. In 2017 he was appointed onto the South African Mining Extraction Research, Development and Innovation Steering Committee. He has significant experience in leading underground and open pit operations in Africa, South America and Australia.

Key Management Frans van Daalen – Chief Operating Officer – Frans is a qualified mining engineer with 18 years operational and technical experience over a broad range of commodities. He is a co- founder and director of VBKom, a 9 year old consultancy focussed on mining and industrial engineering and project management. Rob Sewell – Chief Financial Officer – Rob is a CA (SA) with 12 years commercial and financial experience across various industries. He completed his training at Deloitte in Johannesburg and also gained international experience during a secondment to the Deloitte Sydney office.

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As at the quarter ending 30 September 2019 the distribution of all our published recommendations is as follows:

Recommendation Total Stocks Percentage % Corporate Percentage %

Corporate 50 89.3 50 100.0

Buy 5 8.9 0 0.0

Speculative Buy 0 0.0 0 0.0

Outperform 1 1.8 0 0.0

Market Perform 0 0.0 0 0.0

Underperform 0 0.0 0 0.0

Sell 0 0.0 0 0.0

Total 56.0 100.0 50.0 100.0

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Company/Issuer Disclosures

Company Name Table of interest number 12-month recommendation history Date

AfriTin (ATM) 1,2,3,4,5,8,10 Corporate 29.01.18 http://research.whirelandplc.com/research/regulatory.asp

Companies Mentioned

Company Name Recommendation Price Price Date/Time Bushveld Minerals (BMN) N/A 23p 18.10.19

Headline Date Uis commissioning and the generation of first cash flow 29.10.19

Recommendation From To Analyst Corporate 29.01.18 present CA

Current Analyst (CA), Previous Analyst (PA)

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