FORMER Cradle Arc CEO, Kevin van Wouw, is back in sub-Sahara’s copper sector as CEO of Central Copper Resources (CCR) which today announced it had raised $3m ahead of its listing on the UK’s Alternative Investment Market (AIM).
Some of the funds raised – of which $2m was from an undisclosed strategic investor valued at $1bn on the Toronto Stock Exchange – will be used to buy Armada Minerals, a copper development firm that owns the Lunga project in Zambia.
Van Wouw said in a statement the acquisition of Armada Minerals would “be an important addition” to CCR’s development prospects in the Democratic Republic of Congo (DRC) which consists of a 65% stake in COMILU.
COMILU’s holds 13 licences in the DRC’s Mbamba Kilenda project. The engineering segment of a prefeasibility study into the Mbamba Kilenda project in October scoped out 10,000 to 15,000 of copper in concentrate production for the first three years of operation.
The installation of milling and floatation facilities in the third year would pave the way for production to be increased to one million tons run-of-mine producing 30,000 tons a year of copper concentrate. This would require $180m in capital expenditure whilst the total capital required for the first three years of production was about $46.7m.
CCR will take this proposition to AIM next quarter at a time when the fundamental supply and demand picture for copper appears highly positive. CCR is banking on a copper price of $2,65 per pound which compares to a current price of about $4.50/lb ($10,011/t) – an increase year-on-year of 85%, and 29% higher year-to-date.
Goldman Sachs said in a report in December last year that “… the bull market for copper is now fully underway”. The view is widely shared among investment analysts. According to a report by Jefferies analysts, copper demand will “significantly” exceed supply with deficits set to blossom over the next seven to eight years. The multi-year deficits will drive the price of copper inexorably upwards, it said.
CCR said Mbamba Kilenda would generate “strong cashflow” from its second year of operation.
Van Wouw’s last attempt at the copper sector ended in late 2018 with his Cradle Arc seeking “insolvency advice“. The company was developing Botswana’s Mowana copper mine which was previously operated by Zambia Copper Investments before the mine was shuttered in 2015.
“CCR, can now start to accelerate its development and exploration operations across its two assets with the goal of becoming a new prominent copper mining developer/producer in Africa,” said Van Wouw in a statement.