Copper 360 revels in finds of high-grade surface deposits

Connie Queline

Copper 360 revels in finds of high-grade surface deposits

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SIMON BROWN: I’m chatting with Jan Nelson, CEO of Copper 360. Jan, appreciate the time today. A recent Sens from yourselves – you’ve been drilling in surface sampling; you’re finding, frankly quite high-grade copper deposits. This is just next to the historically mined Tweefontein Mine.

JAN NELSON: Simon, yes, that’s correct. I think South Africa isn’t really known for massive copper deposits on surface, but this is the second deposit that we’ve been drilling, where we’ve been finding phenomenal copper deposits with fantastic copper values on surface. So it really has been very, very good for us.

SIMON BROWN: When you say, ‘on surface’, is this literally scratching the surface or is that mining speak for very, very shallow?

JAN NELSON: I think both. It means it’s on surface, so one can start mining from the surface. But these deposits, as we’ve drilled them, are also open to depth. And they’re quite big deposits. They are large, they’re 50m by 400m ore bodies that go down for 400m and are open-ended.

SIMON BROWN: That’s one of the things. This is adjacent to the Tweefontein Mine, which was mining in the thirties, the forties. I think it concluded around 1950 [with a] recovery grade of around 25%. We know there’s copper in the Northern Cape, because we were mining decades and centuries ago.

JAN NELSON: Yes. The first mineral discovery in South Africa in terms of modern man was actually in the Northern Cape. It was the copper deposits in the north, long before the diamonds and gold and platinum. This was a major copper district. At one stage, Gold Fields and Newmont sank a 2 000m shaft down on the historic Carolusberg Mine here.

SIMON BROWN: I hadn’t realised they were going that far down for copper as well. Of course we chatted when you came to market with the IPO. You were already producing and in fact you’ve got improved tonnage and grades at your SX-EW mine. Again, really good deposits in the area.

JAN NELSON: Yes, the business has evolved in two halves. The first part was all the loose rock that was left down by the previous mining companies that mined here, and they didn’t really rehabilitate. We found that there was copper in those loose rock dumps, which we are now processing through the SX-EW plant, which makes copper plates.

But now we are in the process of commissioning our own plant, a concentrate plant, and we’ve bought our neighbour next door which also has a concentrate plant – and that will now treat sulphite ore from the Rietberg mine. So we’ll be producing copper concentrate from the mine, and then we’ll produce copper plate from the loose rock on surface.

SIMON BROWN: Why were these mines abandoned? I remember the Gold Fields mine; I think it was in about the nineties, where maybe things just moved on. Was it that they didn’t have the technology? Maybe gold was more exciting?

JAN NELSON: No. I think two things happened. There was obviously a significant downturn in the copper price in that period. And I think from the perspective of Gold Fields and those companies, they mine quite large mines to sustain their overhead structure and their whole company’s structure. So a mine must be a certain size for them, and I think the mines that were left were not of a size that they could continue with.

But certainly for a junior company of our nature, mining at a smaller rate and concentrating more on grade as opposed to volume, there are still massive deposits for us. So I think they certainly have the technology to deal with these mines. But it was a question of the copper price slumping, and I think that these mines weren’t of a certain critical size and their exploration stopped.

That has continued under our chairperson, Shirley Hayes, in the last 15 years. A number of new discoveries had been made, and those are some of the ore bodies we are now chasing up again.

SIMON BROWN: Even at listing, if I recall correctly, you were looking at about 15 000 tonnes within about three years. My sense is, reading through the Sens announcements – your results which came out late last year – you’re going to blow past that. It might not be three years, but you’re probably going to get higher production in time.

JAN NELSON: Simon, yes. As a result of Rietberg mine being bigger than we thought it was, and these surface deposits – and we’ve got one or two other big things we are busy looking at – we think that within the next three years we can ramp our copper production on an annual basis up to about 30 000 to 40 000 tonnes of copper metal. It will be a significant change. But it’s because of these large surface deposits that we are getting on surface, which makes mining easier, cheaper.

But then the grades are also phenomenal. Some of the sampling was running at 17%. At Wheal Julia we’ve had 4-8% copper on surface.

SIMON BROWN: And you are already producing. It’s early days and there’s a lot still coming down the line. But you’re producing and selling.

JAN NELSON: Correct. We are selling and producing copper plates at the moment. As from the beginning of next week we’ll start the first copper concentrate plant, and a month after that the second plant starts up again. So we will be targeting about 10 000 tonnes of copper metal for the next 12 months. That’ll be our first milestone; then we’ll ramp it up to about 30 [000] in the following two years.

SIMON BROWN: You’ve done some capital raises. Have you got enough? Obviously there’s a lot happening. You’ve got the work ongoing. You are looking to the Rietberg mine, to redesign and rethink that processing plant. How’s the capital looking at this point in time?

JAN NELSON: Very good. We have raised since the listing an additional R350 million, of which about 80% of that is debt instruments, so we’ve been careful about not diluting our shareholders. And then we do have a facility currently in place for about another R600 million. So we have about R800 million in terms of facilities that we can use – and that will be applied over the next two years in terms of our capital growth programme.

So we are adequately funded to do what we need to do over the next two to three years.

SIMON BROWN: And if you look at copper more broadly, back to the PwC Mine 2023 report, they put copper as one of the six critical metals for the global economy. I’m thinking all this artificial intelligence – every one of those chips that Nvidia makes, there’s copper in it.

JAN NELSON: Absolutely right. A lot is said – and rightfully so – about stuff like lithium in batteries, and manganese and so on, but everything needs electricity and the carrier of electricity is copper. It is a significant component of infrastructure development, electric vehicles, and there just isn’t enough copper in the world.

Just one of the copper mines shutting recently in South America due to safety concerns resulted in the copper price jumping by almost US$500 per tonne, and suddenly there was a major deficit in the world again. That’s how fickle the copper market is in terms of its supply and demand. So there just isn’t enough copper. And copper, like I said, is the carrier of electricity and everything needs electricity.

SIMON BROWN: Yes. I’m remembering my science teacher from way back in the day saying: ‘Copper’s the carrier of electricity. You can’t argue with the periodic table.’ And you absolutely can’t.

A last question – logistics. We see a lot of miners who are struggling with logistics, Transnet and the like. Is that a challenge? Is that something you’ve managed to work around? You are doing a bulk-ish commodity. You talk tonnes, not grams.

JAN NELSON: We are very fortunate. The first point I’ll make is our operations all sit in Springbok in the Northern Cape and our corporate office is based in Cape Town. Now from Cape Town to our mine in Springbok there is not one pothole in any road that we drive along. So the infrastructure’s very good.

But we are lucky in terms of our offtake that the offtakers, who come and take our copper plate and concentrate, come and take it at the mine gate. So when they drive out of the mine gate, it’s not our problem any more.

But the infrastructure is fantastic all the way down to Saldanha and all the way down to Cape Town, so we are lucky there. Fortunately for us we don’t have to worry about transport of our material post the mine gate.

SIMON BROWN: I hear you. They come and fetch it and it’s their responsibility to get a truck.

We’ll leave it there. Jan Nelson, CEO of Copper 360, I appreciate the time.

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