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Copper 360 ships concentrate, on course to pay first dividend next year

Copper 360's concentrate.
Copper 360's concentrate handling.
Concentrate handling.

Copper 360 CEO Jan Nelson interviewed by Mining Weekly's Martin Creamer. Video: Creamer Media's Shadwyn Dickinson.

Copper 360's concentrate.

Photo by Dewald Coetzee

Copper 360's concentrate handling.

Photo by Dewald Coetzee

Concentrate handling.

Photo by Dewald Coetzee

24th April 2024

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – South Africa's rapidly advancing copper producer Copper 360 has shipped copper concentrate from the Northern Cape province for the first time in 21 years, which saw its shares rise by more than 26% on Wednesday, April 24.

As South Africa’s only listed pure copper producer, Copper 360 has delivered record concentrate grades during plant commissioning, and is performing way ahead of expectation as a producer of concentrate and copper cathode.

“We salute the tenacity and spirit of the people of Namaqualand who support us tremendously and the drive and passion of our team,” said Copper 360 CEO Jan Nelson, who spoke to Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

Copper 360 is quickly building up from a low base to one that will be generating over R100-million in monthly revenue.

Nama Copper, the first concentrate plant of this Johannesburg Stock Exchange AltX-listed company, has generated a profit within six weeks.

The company's second concentrate plant, the MPF 1 plant, is on track to come on line in two months, and two months ago, its solvent extraction and electrowinning (SX/EW) broke even.

Meanwhile, achieving 30%-plus grade during commissioning is regarded as remarkable during the five weeks of commissioning, when 70 t of concentrate was the outcome – 76% more than the targeted 40 t.

Based on this performance, the plant is forecast to produce more than 1 000 t of concentrate a month within three months, two months ahead of planned production.

The target capacity of the second concentrate plant, which is due to start production at the end of July, is 1 400 concentrate tonnes a month.

In addition, the copper cathode-producing SX/EW, which delivered a record performance in March by producing 60 t of pure copper metal, is on track to ramp up to 100 t of copper a month within the next quarter.

Mining Weekly: Could this be the far-reaching start of a crucial new copper era for South Africa’s Northern Cape, which is so prospective for base metals so crucial to a world that is electrifying at a fast pace?

Nelson: Absolutely. This was one of the biggest copper districts during the 1940s to the 1980s. You had Newmont and Gold Fields mining here. There were shafts sunk 2 000 m deep and a lot of these mines are still open with large orebodies. I certainly think that with this production initiating this area will definitely be the revival of South Africa as a major copper player.

Is Copper 360’s 30%-plus concentrate grade delivery likely to be sustained?

Absolutely. Our testwork showed initially that the copper concentrate grades were between 40% and 50%, which is extremely high. On average, companies produce at about 24%. For us to achieve 30% concentrate grades during commissioning is phenomenal because you have quite a lot of problems during commissioning. You don't have consistent feed, your plant is still building up. To have that from the get-go is just fantastic and shows us that 40% to 50% in the future will be easily achievable.

How did Copper 360 manage to exceed its planned copper concentrate production target by a whopping 76%.

Buying a plant that was ready to go obviously played a big role, but it's also due to the fantastic team that we have on the ground. Our people have really put in a considerable effort. We've appointed a new plant manager, as announced, and we have a new operation manager in place, but it's just exceptional teamwork that pulled out all the stops.

What are the new expectations, now, for your recently acquired Nama Copper plant, in view of the way it has been able to streak ahead of targeted performance?

Over the next three months, it will build up to about 1 000 concentrate tonnes. It's going to produce close to 350 t of copper metal, and we'll generate something close to about R50-million to R60-million in revenue. Not only will that plant pay itself back in four months, but the production ramp-up is not a problem because we've got enough milling capacity. Our biggest issue was crushing. We've just bought a new crushing plant and we are now trucking in over 1 000 t a day to feed the plant, so we have no issue of building up to those production rates.

When will Copper 360’s second concentrate plant begin to produce concentrate and what are your expectations from the MFP 1 plant?

That plant will come online at the end of July. It’s got a target capacity of 1 400 t of concentrate, so it's going to be producing about 450 t of copper metal. The same material will feed both plants and both plants are targeted to produce concentrate grades of between 30% and 50%. The plants will eventually ramp up to produce close to about 750 t of copper metal a month, which will take us to 10 000 t of copper metal and those plants will generate close to R80-million to R100-million rand per month. That's quite significant for us because two months ago, the SX/EW broke even and within six weeks, the Nama Copper concentrate plant has made a profit, so we're building up from a very low base to over R100-million in monthly revenue and that is quite significant for a small company like ourselves.

How did the SX/EW plant’s record output of copper cathode come about?

Some time ago, we announced that the biggest issue we had with our plant was recoveries, and, again, our team came up with a fantastic recoveries solution. We spent about R35-million to install special equipment on the recovery side, and our recoveries have increased from 40% to 60%. Further work we’re doing will increase that to about 75%, which has resulted in the SX/EW for the first time producing over 60 t of copper. That’s building up to about 80 t in the next month and then to 100 t. The capital investment paid off but, again, the ingenuity of our team on the ground has made all the difference.

How advanced are your plans to add value to your copper cathode yourselves by making copper wire and copper pipe in the Northern Cape?

Once we get to steady-state production, our plan is to build a small smelter in the future. We would like to beneficiate in South Africa. It's something that the government is pushing and it makes commercial sense. We want to make the copper wire and copper pipe and we want to sell it for that extra 30% to 40% margin. It's not a very difficult process, and that’ll be the next thing that we’ll target from our copper cathode. But we also have a plan to smelt the concentrate in due course, and that's what we'll be working on next.

Finally, Jan, what, in your view, should be the biggest takeaway from this interview?

I think the biggest takeaway is that shareholders now know that the risk that the company had in terms of getting to production is behind us. We only had the SX/EW plant and that had many problems, which we’ve resolved. The first concentrate plant has gone into production and it's generated a profit within six weeks. The second one is coming online in two months, so there's a lot of flexibility. In terms of upside, shareholders can now be certain that the cash flow will realise and we're on course to pay that first dividend next year.

VALUE OF GOOD GRADE

As Copper 360 chairperson Shirley Hayes pointed out in LinkedIn, high concentrate grades can significantly improve the profitability of mining operations owing to less material having to be moved to deliver the same volume of metal.

“Additionally, higher grades often result in lower smelting and refining costs as there is less waste material process,” added Hayes.

The Copper 360 business is focused on processing historical mined copper rock dumps through a process of environmental clean-up, and mining surface and shallow copper resources.

The company has acquired an extensive database from mining majors that worked the district before, which gives it a significant competitive advantage.

The mining right covers 19 260 0346 ha.

Edited by Creamer Media Reporter

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