Andrada Mining (LON: ATM) made two announcements, both of them reasonably good for the business, which also seem to have moved the ATM share price only fractionally. The reason for this is that it’s new news which changes share prices. What we already think is going to happen is already in the share price - the efficient markets hypothesis. So, we need to gain new information for the share price to change. These two announcements might be confirmations, but they were things we expected to happen anyway.
One is the receipt of $25 million: “Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the metals and mining company with a portfolio of technology metals mining and exploration assets in Namibia, announces the receipt of USD 25 million and associated issue of shares, convertible loan notes and warrants as part of the Funding Package announced on 15 August 2023, with funds advised by Orion Resource Partners ("Orion").” We’ve known this was going to happen for those months. The surprise would have been if it did not.
The other is resigning offtake agreements: “Andrada Mining Limited, an African technology metals mining company with a portfolio of production and exploration assets in Namibia, is pleased to confirm the renewal of off-take agreements with the Thailand Smelting and Refining Co. Limited ("Thaisarco") and AfriMet Resources AG ("AfriMet") for tin concentrate and tantalum concentrate, respectively.” Again, that’s good and useful, but it’s hardly news - few would have expected the outcome to have been any different.
Andrada Mining share price from Google Finance
We’ve talked in the past about Andrada: “One of the things about tin is that there's often a lithium consent associated with deposits. They're just two metals that often enough do turn up in the same place. You'd rarely go mining such a deposit for the Li content, but if you're already there - with plant equipment etc - for the Sn then who not co-extract the Li? You're already covering most of the overheads and it's only the marginal costs of Li extraction that have to be covered by Li revenues.” That is, they were sensible by co-extracting rather than thinking about expanding to a new deposit. Also about ATM shares: “Andrada Mining (LON: ATM) (OTCQB: ATMTF) shares are down 3%. ATM shares are down on the back of the results. Which are, to be fair about it, better than we might have expected. For the tin price has been falling and that’s something that we can identify from outside Andrada. So, anyone tracking the shares would have been able to note that falling tin price and the likely effect upon the results. What’s different is that Andrada has been able to offset some of that effect. If they’d not then they would have been into real loss territory.”
Andrada is different from the many small mining shares we often look at because ATM is actually producing. So results depend upon the commodity price it can gain and not much else. Which is why the price changes are pretty constrained despite these bursts of news. There’s not a great deal of uncertainty to be resolved.
