Alphamin Resources — Honing FY25 forecasts

Notwithstanding press headlines reading ‘Alphamin Resources profit slumps in first quarter on DRC disruptions’, the company’s Q125 results were universally better than in Q124 and consistent with its operational performance (disclosed on 17 April). Despite a temporary halt in operations at the mine on 13 March due to the regional security situation, Alphamin was cash flow positive during the quarter. It turned US$38.5m in net debt into US$3.9m of net cash (excluding US$5.6m in lease liabilities), even though it sold 407 fewer tonnes than it produced, which we estimate cost c US$13.2m in revenue. We have cut our FY25 dividend forecast from C$0.15/share to C$0.12/share, partly reflecting the board’s decision to pass the FY24 final distribution, but also a wish to return to C$0.06/share semi-annual payments as soon as possible. However, this still leaves Alphamin’s shares on a very generous yield. We have trimmed our FY25 EPS forecast by a very modest 0.4% to US$0.09/share (cf 1.85 US cents in Q1).