SAKI Macozoma has extended his mining interests to base metals development after his company, Safika Resources, today announced it had established a beachhead in the A$378m Prieska Copper-Zinc Project.
Safika Resources is primarily invested in manganese via Ntsimbintle Holdings which operates the Tshipi Borwa manganese mine in South Africa’s Northern Cape province.
In terms of an announcement today, Safika Resources will take a 44.72% stake in Prieska Resources, the black economic empowerment vehicle for the project. Other shareholders in Prieska Resources include Kolobe Nala Investment Company – which increase its stake to 37.97% – and Black Star.
Black Star will have its shareholding diluted, although there is provision for it to increase its holding depending on it meeting specific investment milestones.
Prieska Resources has an overall 20% stake in Prieska Copper-Zinc Project, but the controlling shareholder is Orion Minerals, a Sydney- and Johannesburg-listed mining development company.
Its CEO, Errol Smart, said today in a statement that the agreement with Safika Resources opened the way for the “… successful exploration and mining in the Northern Cape”.
Quite whether Macozoma is content remaining a backseat player in Orion Minerals is a question for another day.
He said today the transaction with Orion “… sees us further entrench our position with fellow Northern Cape shareholders to diversify into copper and zinc in the near term.
“We look forward to replicating our success in manganese achieved in Tshipi e Ntle, Tshipi Borwa mine which is the largest manganese ore exporter from South Africa in 2018”.
Orion Minerals published a bankable feasibility study (BFS) in June in which it set down plans for a “foundation” 10-year production period in which some 189,000 tons of copper and 580,000 tons of zinc would be produced.
Peak funding would be A$378m with a payback of just under three years and an all-in sustaining margin of 44%.
Commenting in a Miningmx article in April, Smart said about two-thirds of the project finance would be debt financed. The balance would be equity financed and could consist of a streaming or forward sale structure, although Smart was cautious of over-committing “… because those things can be difficult to manage”.
He also said in the same article that the company could become a takeover target if it made a success of its Prieska zinc-copper project.
“At some point they will come out with their knives, which is the life of a junior miner, especially if we develop something that is very successful,” he said when asked at a media roundtable last week whether Independence Group was a supportive shareholder.
In Safika Resources, however, Orion Minerals may have established a long-term partner with the heft to finance its other development projects in addition to Prieska Copper-Zinc project.