A much better quarter at Alphamin (JSE: APH)

Key metrics are up and so is guidance for the full year

Alphamin has released numbers for the third quarter of 2025, reflecting contained tin production that was 26% higher than the previous quarter. Best of all, guidance for the full year is up from 17,500 tonnes to between 18,000 and 18,500 tonnes.

Contained tin sales came in 12% higher than the prior period. The average tin price achieved was up 4% and all-in sustaining costs (AISC) per tonne was 3% lower. When you consider all these metrics, it won’t surprise you that EBITDA was up by a juicy 28% vs. the preceding quarter.

These are quarter-on-quarter numbers, not year-on-year. Before you get too excited though, the important context is that there were security issues early in the preceding quarter that made it a soft base for comparison. The security risks are never zero when you’re operating in regions like the DRC. The company has noted a recent increase in security events on a key border line that is about 200kms away from the mine. At this stage there are no disruptions to operations, but the risk is clearly there.

On the exploration side, the company has continued with drilling at Mpama North and Mpama South to increase the resource base and life of mine. They also plan to discover the next tin deposit near the Bisie mine, as well as any remote tin deposits on the land package. Those are long-term plans, with the focus right now on the drilling results at Mpama North and Mpama South.

Anglo American’s Teck Resources era isn’t off to a great start (JSE: AGL)

Teck has cut production guidance at two of its copper assets

The trouble with large corporate deals is that when you assure the market that a particular mega-merger is a great idea (despite a zillion historical examples of dicey shareholder value outcomes in these types of deals), you really can’t afford for any bad news to come through. Anglo American’s reputation for deal timing just won’t leave them alone, with now-demerged Valterra Platinum (JSE: VAL) rallying like crazy and future dance partner Teck Resources releasing a tough announcement.

If you would like to read the detailed Teck announcement, you’ll find it here. The TL;DR is that due to project challenges at Quebrada Blanca, they now have an expectation of increased downtime in both 2025 and 2026. Mining projects are incredibly complicated and dangerous things, so it’s critical to do them properly and make the tough decisions when required. But this doesn’t mean that shareholders are happy to see this stuff, particularly Anglo American shareholders who need to believe that the Teck merger is the right decision for the group.

Guidance for 2025 copper production at Teck has been cut by over 11% if you use the midpoint of guidance. That’s particularly frustrating for the company at a time when copper prices are strong. Teck’s guidance for zinc is unchanged at least.

Unfortunately, as is always the case when production comes in lower than expected, the unit cost of the commodity has increased significantly. They expect a 20% increase in the net cash costs per pound at problematic Quebrada Blanca for 2025.

Of course, if this is just a temporary wobbly, then it isn’t the end of the world. The problem is that if you read Teck’s 2026 – 2028 outlook, the issues just get worse as time goes on. The mid-point of copper production guidance at Quebrada Blanca for 2027 and 2028 has dropped by approximately 13% and 17% respectively. At Highland Valley Copper, they expect some pressure on 2026 production and then a significant improvement in 2027 ahead of prior guidance. At Red Dog zinc, guidance for 2027 and 2028 is below previous guidance.

You get the idea. These numbers are fluid and will be updated as time goes on, but the theme is clearly one of a disappointing production outlook vs. previous guidance. Anglo American’s response is that their independent due diligence led to an expectation that is “broadly consistent” with Teck’s latest numbers. This suggests that Anglo did a better job of understanding these assets through the due diligence process than Teck management did by living with them every day. You’ll forgive my skepticism here.

Investors tend to be nervous of large deals as a default setting. Deals that involve a deterioration in expectations at the target asset are even scarier.

Exciting news for Ethos Capital and the market: Optasia intends to float (JSE: EPE)

New listings are always fun

When a company announces an intention to float, this has nothing to do with their December holiday plans. Instead, it means that they will be coming to market through a listing process, with Optasia (a name you’ll recognise as being the most important investment in the Ethos Capital stable) looking to do exactly that on the JSE.

New listings are the lifeblood of the market, so they always lead to excitement, particularly when it’s a proper listing with a company that has put in the work. Check out the Optasia IPO website and you’ll see what I mean.

What does Optasia do? Well, you have to look through a lot of buzzwords (including AI) to arrive at the understanding that this fintech focuses on providing access to credit and airtime in underbanked markets. In other words, this is a classic African fintech story, although they have a presence in Asia, the Middle East and even some parts of Europe!

Optasia has been around since 2012 and has 350 employees across 15 offices, so they are a scale player. There are 121 million monthly active customers. Revenue for the first half of 2025 was up more than 90% year-on-year, so this is a beautiful example of the J-curve in action. They are very profitable at adjusted EBITDA level with a margin of 46%, although the adjustments always need to be treated with caution. The company is certainly profitable though, with a substantial jump in net profit from $7.6 million to $23.3 million in the six months to June 2025.

The width of the moat comes from the extent to which Optasia has managed to build an ecosystem with multiple touchpoints. It’s a complex marketplace, with financial institutions on one side and distribution partners in the middle, all before reaching consumers on the other side who become more familiar with the offering over time. That’s a very hard thing to build, especially across multiple geographies.

As for the listing, they are looking to raise R1.3 billion, so this is decently sized raise in the local market. It looks like it will be done through institutional investors only (rather than an offer to the public). Certain existing shareholders are also going to sell R5 billion in shares to institutional investors.

As for Ethos Capital, they haven’t specifically said whether they are one of the selling shareholders. Given their stated approach of returning value to investors, it seems like that they intend to either fully or at least partially exit the Optasia stake.

FirstRand’s battle in the UK motor finance industry isn’t over (JSE: FSR)

The company is unhappy with the proposed redress scheme

FirstRand (along with other financial services companies operating in the UK vehicle finance market) is dealing with a difficult regulatory situation related to commission practices around vehicle finance. It looked as though the worst of the uncertainty was behind them after the UK Supreme Court ruling that gave legal clarity to the situation, but that joy was short-lived.

The UK’s Financial Conduct Authority (FCA) has proposed a redress scheme that FirstRand describes as being “beyond expectations of what can be considered proportionate or reasonable” – and that’s not good for FirstRand shareholders. They haven’t indicated what the amounts would be at this stage, but FirstRand wouldn’t have released an announcement with that wording if they felt that their existing provision was adequate to cover it.

As part of pushing back against this, they’ve flagged their disagreement with the lack of application of the recent UK Supreme Court ruling to the redress scheme.

There will now be a period of six weeks of consultation with the UK FCA. FirstRand has undertaken to keep the market informed of any developments that might happen before the end of that period as they consult with the regulator.

Nibbles:

• Director dealings:
  • A director of Woolworths (JSE: WHL) sold shares worth R23.2 million and a director of a major subsidiary sold shares worth R7.2 million. With the share price down 16% year-to-date, that’s not exactly a bullish signal about the chances of a near-term recovery.
  • A non-executive director of Mondi (JSE: MNP) bought around R508k worth of shares. The price was R203.30, so the purchase must have been after the initial drop in response to earnings. The price has subsequently kept sliding, now at R195.

• City Lodge Hotels (JSE: CLH) announced that they’ve repurchased R170 million worth of shares since March 2025 at an average price of below R4.00. The share price is currently R4.20. This represents 7.14% of shares that were in issue as at the date of the AGM last year, so this should be a very helpful boost to HEPS going forwards.

• Wesizwe Platinum (JSE: WEZ) announced that the ramp-up of underground operations is ahead of schedule. They are negotiating key development contracts and will keep investors informed of further milestones.

• Kibo Energy (JSE: KBO) is suddenly back on our screens, with news of a potential acquisition of a decarbonisation and renewable energy company called Carbon Resilience. I’ve gotta tell you, carbon resilience is the kind of resilience that investors needed to get to this point, as Kibo has been a story of one corporate disappointment after the next. Perhaps the new chapter will be different, with Kibo looking to acquire the asset for $135 million, settled through the issuance of shares after a planned 1600:1 share consolidation. Just to add to the dilution of value of current shareholders, the company has also issued a convertible note to an institutional investors to provide funding of up to £150k. As part of lifting the suspension of the listing on AIM, the company needs to get the accounts for the year ended December 2024 out the door.