With Copper 360’s Rietberg copper mine now in production, CEO Jan Nelson says it’s time to focus on profitability. The company aims to recover from the major capital expenditure it took to get to this point.
“We need to stabilize operations and focus on profitability. We’ve had aggressive growth due to aggressive capital commitments. Now, we need to breathe and optimize recovery, cost reduction, and organic growth,” Nelson said during an online presentation.
Nelson mentioned six more mines set to come online soon, shifting the focus to these near-developed projects. The major change is moving from processing loose rocks from lower-grade ores, which represented 22% of the business, to underground mining of high-grade material with better recoveries.
Most of the business will now involve mining sulphide rock, with high-grade recoveries exceeding 90%. This shift will make up 80% of the business. “We are reintroducing the cluster mining model, replicating the success story of Newmont and Goldfields in this area. Several permitted mines within a 20 km radius will feed into a central processing facility,” Nelson said.
Local expertise is crucial. The company has brought in experienced miners from the Namaqualand region. “Diverse investments targeting multiple orebodies create mining flexibility, which will ensure our success,” he explained.
Copper 360 plans to establish a central processing facility at Nababeep, with three plants. The Nama Copper mining right is to the north, and the SHiP mining right has multiple orebodies feeding the central facility, creating flexibility.
The copper plating business, while profitable, is small with low margins, generating about R15 million to R20 million in revenue. In contrast, the two concentrate plants are expected to generate over R80 million to R100 million in turnover, marking a significant inflection point.
“Copper concentrate comes at a higher margin, uses less electricity, and is far less complex than plating,” Nelson noted. About 21% of next year’s copper production will come from plating, with 80% from copper concentrate. This means about 61% of EBITDA will come from concentrate.
Nelson acknowledged that EBITDA was negative in June and July due to personnel and equipment buildup for mining, impacting operating costs. However, with the Rietberg mine now operational and predominantly processing concentrate, things are expected to improve.
“We still need to finish our Modular Flotation Plant One, which will go into production in the next two months,” he added. The value of Copper 360’s sulphides is R183 billion, with nearly a million tons of copper metal. Oxides represent about R10 billion of the total picture, but the main focus is on sulphides.
Copper 360 confirmed its mineral reserves at Rietberg to be 2.48 million tonnes at 1.38% copper. Existing broken ore is in numerous underground draw points. Included in the mineral reserve is a Crown Pillar section (94,000 tonnes at 1.17% copper) and the previously excluded “fringe ore” (500,000 tonnes at 1.37% copper), discovered along the underground stope sidewalls.
A detailed mining viability study was also recently published. It includes results from merging technical and commercial evaluations to gauge the viability of a long-term operational plan. This plan outlines the development of vital infrastructure and forecasts future mining production capacity.
“In our strategic plan, we targeted grades of about 1.6%. However, the actual grades are much better, such as 6% copper, 1.89%, 1.5%, 3%, 2.39%, 5.6%, and 1.88%. Many mines would sacrifice everything to have these grades. This is the actual rock our team is bringing out of Rietberg at much higher grades than we estimated. That’s great news for us and will increase the margin,” Nelson said.
Drilling was completed at the Cousin Jack or Wheal Julia prospect, where there is a high-grade oxide resource on the surface. The final valuation of Koeëlkop, another surface orebody, will become an open pit, feeding sulphide and oxide ore. The final valuation of Jubilee, another open-cast mine by Newmont, is also underway.
At Rietberg, Copper 360 is looking at further expansion, including a potential new open pit. A joint venture with DRDGOLD on its tailings dumps is progressing. If successful, it will significantly impact the business’s bottom line. Copper 360 is also in the final evaluation of the Homeep East mine.
“It’s not just about Rietberg going into production, but also about these six other virtually mine-ready opportunities that will feed in and grow the margin,” Nelson emphasized.
Source: Mining Weekly
