VSA Capital has forecast that Andrada Mining’s annual tin production at its Uis mine in Namibia will increase to 1,872 tonnes by the 2029 financial year, supported by new ore-sorting equipment, higher processing volumes and improved recovery rates.
The investment research firm expects contained tin production to reach 1,196 tonnes in the 2027 financial year before increasing to 1,510 tonnes in 2028 and 1,872 tonnes in 2029, towards the upper end of Andrada’s production target of between 1,500 and 1,900 tonnes.
In its assessment of Andrada’s financial results for the six months ended 31 August 2026, VSA Capital said the company’s improved performance at Uis had strengthened its financial position ahead of the planned expansion.
The firm forecasts Andrada’s revenue increasing from £43.6 million in the 2027 financial year to £62.3 million in 2028 and £80.3 million in 2029, while earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to rise from £13.8 million to £32 million and £42.2 million respectively.
The projected production increase is expected to come from new crushing and X-ray transmission (XRT) ore-sorting equipment, which will remove lower-grade material before it reaches the concentrator, allowing more ore to be mined while improving the grade of material entering the existing processing plant.
According to VSA Capital, the new crushing circuit is being transported from China and India, while the XRT ore sorters are being containerised at IntaGrey.
The research firm expects the benefits of the expansion to begin during the 2028 financial year, with mined ore increasing to 1.4 million tonnes before reaching 2.1 million tonnes annually from 2029.
The average tin grade entering the processing plant is forecast to increase to 0.20%, compared with 0.149% recorded during the first half of the current financial year.
VSA Capital said the higher production volumes would also improve the mine’s financial performance by spreading operating costs across more tonnes of tin and reducing the royalty burden under Andrada’s agreement with Orion.
The report explains that the applicable royalty rate decreases when concentrate production exceeds certain thresholds, meaning the expansion could improve profitability beyond the increase in production volumes alone.
Uis returns to profitability
The forecasts follow stronger operating and financial results at Uis during the six months ended 31 August 2026, when Andrada processed 538,810 tonnes of ore, compared with 527,583 tonnes during the corresponding period.
Although ore throughput increased by only 2%, the average tin feed grade improved by 9%, from 0.137% to 0.149%, while tin recovery increased from 71% to 73%.
These improvements lifted tin concentrate production by 11% to 955 tonnes and contained tin production by 13% to 576 tonnes, compared with 511 tonnes a year earlier.
VSA Capital said the production increase was amplified by a 57% rise in Andrada’s realised tin price, which reached US$52,131 per tonne compared with US$33,154 during the previous corresponding period.
Revenue consequently increased to £20.6 million from £11.4 million, while gross profit rose to £8.3 million from £1.9 million.
EBITDA increased to £4.5 million from £1.6 million, while profit before tax reached £2.2 million compared with a £2.8 million loss in the corresponding period.
The company reported a profit after tax of approximately £2.1 million, reversing the £3 million loss recorded a year earlier.
The improvement came despite higher operating expenditure, with production costs increasing from £8.1 million to £9.6 million and Orion royalties rising from £900,000 to £2 million.
VSA Capital attributed the higher royalty payments to stronger tin prices and the royalty band applicable to the mine’s current concentrate production.
The report also highlighted the effect of increased stripping activities ahead of the planned expansion, which contributed to a rise in all-in sustaining costs from US$24,808 to US$31,555 per tonne.
Despite these increases, the mine’s gross profit margin improved from 16.4% to 40.3%, reflecting the combined benefits of higher production, improved recoveries and stronger tin prices.
Hedging arrangements to end in November
VSA Capital expects Andrada’s financial performance to strengthen further during the second half of the current financial year as its remaining tin hedging arrangements expire in November 2026.
The research firm said the hedging contracts resulted in realised losses of approximately £1.75 million during the first six months because the contracted prices were below prevailing market prices.
The remaining contracts cover approximately 40 tonnes of tin per month at US$42,000 per tonne and are expected to expire in November.
Their expiry would leave Andrada’s production fully exposed to prevailing tin prices from December, removing the effect of the existing contracts on future sales.
VSA Capital expects contained tin production of approximately 620 tonnes during the second half of the financial year, bringing full-year production to its forecast of 1,196 tonnes.
The research firm has maintained its forecast EBITDA of £13.8 million for the current financial year, with the stronger second-half performance expected to reflect higher effective tin prices and the reduced impact of hedging.
Andrada’s cash balance increased to £15.6 million at the end of August, compared with £8.9 million previously, supported by stronger operating cash generation and funding secured for the expansion.
Operating cash flow reached £4.9 million during the six months, exceeding the £4.7 million generated during the entire previous financial year.
The company invested £7.8 million during the period, including £6.5 million in property, plant and equipment, principally for the procurement of the new ore sorters, and £1.3 million in exploration and intangible assets.
Borrowings increased to £23.8 million from £19.8 million, although net debt declined to £8.2 million from £10.9 million.
The report also confirmed that the N$98 million financing facility provided by Bank Windhoek and the Development Bank of Namibia had been fully drawn.
Lithium Ridge and Brandberg West
VSA Capital also reported progress at Andrada’s Lithium Ridge and Brandberg West projects, where development activities are being supported by external investment partners.
At Lithium Ridge, the first stage of the exploration programme funded by SQM was completed in May 2026, with drilling expanded to 16,500 metres across 143 holes.
Surface sampling extended the main mineralised trend by 50%, from six kilometres to nine kilometres, while drilling confirmed lithium mineralisation from surface to approximately 275 metres below ground.
Results released in August included an intersection of 35.59 metres grading 1.52% lithium oxide from a depth of 231.80 metres, including 24.08 metres grading 2.00% lithium oxide.
The October results identified lithium mineralisation in a newly discovered pegmatite body outside the main mineralised trend, while tin and tantalum were also encountered in the pegmatites.
VSA Capital said the remaining assay results and preparation of a maiden mineral resource estimate would be the next important developments at Lithium Ridge.
The research firm noted that Andrada had not yet provided a timetable for SQM’s decision on the second stage of its investment agreement.
At Brandberg West, BWCAM, an affiliate of ACAM, invested US$10 million for a 30% interest in February 2026, with an option to invest a further US$40 million to increase its ownership to 49%.
The Namibian Competition Commission granted unconditional approval for the arrangement in August, while Andrada retains operational control.
Initial XRT ore-sorting tests on historical samples upgraded tungsten grades from 0.24% to 1.45%, achieving recoveries of up to 91% for tungsten and 94% for tin while rejecting approximately 90% of the material by mass.
The research firm said the results indicated the potential to process historical waste, discarded material and tailings at Brandberg West, although further testing is required to establish the viability of such an operation.
Geophysical surveys and reverse circulation drilling over historical tailings have been completed, while diamond drilling and waste-stream sampling have commenced.
VSA Capital said the next developments would include the first drilling and tailings assay results, together with larger-scale ore-sorting tests to support resource evaluation and BWCAM’s subsequent investment decision.
The firm maintained its valuation of Andrada’s interest in Brandberg West at approximately £95 million and Lithium Ridge at £88 million.
VSA Capital also maintained its buy recommendation on Andrada shares and a target price of 16.2 pence, compared with the 6.82 pence share price recorded at the close of trading on 20 October 2026.
