COPPER360 has pushed back commissioning of a copper concentrate plant to mid-January from a previous November-end deadline partly owing to loadshedding
Known as the modular flotation plant 1 (MFP1), it was expected to start producing first copper concentrate before the end of the year. “We are now putting in a generator farm so that we can overcome the effects of loadshedding,” said Jan Nelson, CEO of Copper 360.
“Shareholders are disappointed by the slippage but it is only a couple of months and they understand the reasons for it,” he said. “Generally, I’m not concerned about the build and the issues we have at the SX/EW plant have also improved,” he said.
MFP1 is to process sulphide ore mined from Rietberg, a nearby mine in the Northern Province where Copper 360’s operations are located. The SX/EW plant, however processes oxides from which it produces cathode.
Production from the SX/EW, which is generating some early cash flow for Copper 360 has been held back by loadshedding as well as the underperformance of a crushing contractor which cost the company about 48 tons in output. Copper 360 has since designed and built its own crusher at a cost of about R31m.
The lower volumes from the SX/EW led to a deepening in the firm’s operating loss. For the six months ended August, which it reported today, Copper 360 reported an operating loss of R61.5m, a year-on-year decline of 54% (2022: R39.9m). Shareholders were dealt a headline loss of 79 South African cents per share for the six months (2022: 0.01c/share).
Despite this, Nelson remains upbeat about the firm’s prospects which have been boosted by a significant increase in projected contained copper production. Following an upgrade in MFP 1 to accommodate larger than planned production from the Rietberg mine, and the acquisition of neighbour Nama Copper announced on Wednesday, contained copper output is planned to be 7,975 tons a year by 2025 from a previous target of 3,899 tons/year.
Nama Copper will cost R200m to acquire of which R50m is immediately payable with the balance on completion of a due diligence in the next four months. Nama Copper will give Copper 360 a second processing plant (MFP2) while a third is being planned in the coming years. Nelson said, however the company was keen to complete its current building cycle. “It’s important we get some runs on the board,” he said.
Copper 360 raised R215m after listing in Johannesburg during April this year but after the slower than expected cash flow generation and previously unbudgeted capital costs – such as the R31m for the crusher and an additional R65m for the expanded Rietberg mine – the company is likely to return to the market, if only to fund the balance of Nama Copper.
More details of funding plans will become public in several weeks but Nelson declined to provide specifics.