Molulu copper/cobalt project update

17th February 2023

Last month, mining investment company Critical Metals provided a market update on its Molulu project as well as Critical Metals’ milestones since its readmission to trading on the LSE on September 12, 2022.

Critical Metals was established to acquire mining opportunities in the critical and strategic metals sector, and is currently developing the Molulu project, an ex-producing copper and cobalt mine in the Democratic Republic of Congo (DRC).

Ahead of readmission, management raised £1.8-million at £0.20 a share for the restart of the now indirectly owned 70% of the Molulu project, following the recent acquisition of the shares of holding company Madini Occidental.

Soon after readmission, geological mapping of Molulu began with data entered into geological mapping software. The software allows an electronic map to be drawn with a resolution scale of 1:10 000, thereby allowing deeper understanding of the known copper orebody, with the expectation of finding unknown copper orebody extensions.

“So far, one new copper ore extension has been found in the southern part of the lease area using this software, and three existing oxide copper targets have been identified close to surface with average copper grades of 3%,” says Critical Minerals.

In addition, the company focused on further understanding the existing copper ore bodies; two cobalt areas, of which one was previously artisanally mined; potential drilling areas for input into the Joint Ore Reserve Committee report; and other requirements for production, as the lease area is 17 km2 with less than 10% of the property understood.

During the third week of September 2022, the board of directors flew to the DRC to meet with local partners that hold the remaining 30% of the project. The board also visited Molulu to meet with the mine engineer and geologists on the ground while visiting the copper outcrops.

In late September 2022, camp accommodation for 30 employees was ordered from South Africa and after a customs clearance period, arrived at Molulu in November.

In early November 2022, the company strengthened its team on the ground with the appointment of two seasoned mining veterans, a project manager and a mine manager, each with over 30 years’ experience. These professionals built the Molulu camp to best industry standards, while overseeing the development of the mining plan.

Further, in November, a heavy equipment rental contract was signed to lease the necessary mining machinery to start mining. The decision to lease the equipment was made to keep the upfront capital costs to a minimum while copper production ramped up.

Unfortunately, owing to consistent operational failures and unmet deadlines by the mining equipment supplier, the company decided to change its equipment supplier.

Critical Minerals noted the delay in the delivery of the equipment had a knock-on effect on its timetable with copper ore production anticipated last month.

“The Critical Metals [board] would like to reassure investors that this is a short-term minor delay relating to supply chain challenges in the delivery of equipment and does not change our twelve-month copper ore production or earnings forecasts.”

Madini Occidental Acquisition

In December, the minority shareholders of Madini Occidental – who held 43% of the company – agreed to sell their shareholding to Critical Metals for £1.3-million. This capital was raised at £0.25 a share through five investors, including Critical Minerals CEO Russell Fryer.

This buyout of Madini Occidental minorities by Critical Minerals saw its indirect beneficial ownership in Molulu increase from 40% to 70%. This transaction and streamlining of the corporate structure is highly value accretive to shareholders, which will be evident once steady state production levels are reached.

Following an extremely lengthy and complex readmission process, 2022 has been a most positive and uniquely transformational year, says Critical Minerals.

“The company is extremely thankful to its shareholders that believe in our vision of creating a fully integrated, multijurisdictional critical metals production company. The company looks forward to updating shareholders and the market again next month.”