Copper 360 issues R100m in shares to fund Nama Copper deal

Copper cathodes waiting for dispatch

SHARES in Copper 360 rebounded 18% in Johannesburg on Monday after the mineral development company announced it had raised an additional R100m through the issue of shares.

The cash from the share issue – completed with a single investor at R3.39/share – will fund the export of copper concentrate and pay R50m to Nama Copper. That amount represents the final installment on a deal that will double Copper 360’s concentrate production.

Copper 360 said in November it would pay Nama Copper Resources R200m for Nama Copper’s processing plant. The plan is for Copper360 to treat more ore through the plant from its Rietberg resource, as well as a large copper tailings resource worth R12bn to R24bn assuming a $8,500/t copper price.

The shares were issued at a 9.1% volume weighted average price for the 30 days up to and including February 14. Based on today’s price, they are at a discount, however. Although recovering ground today, Copper 360 is trading at about R3,20/share after losing 22% on February 14 to close at R2.65/share.

In terms of the share sale, Copper 360 has the right of a buy-back option from the investor which will enable it to minimise shareholder dilution, it said.

“The total capital raised through various structures of debt and equity now stands at R374m,” said Copper 360 financial director, Stephan du Plessis. “The latest tranche of about R100m will limit the potential dilution to shareholders through its hybrid nature.”

Prior to the deal with Nama, Copper360 had targeted copper concentrate of 3,899 tons a year by 2026. With Nama’s plant, however, copper concentrate will increase to 7,975 tons by 2025.

“The Nama Copper plant will ensure that the revenue of R2.2bn planned for the financial year 2026 will now be able to be delivered in the 2025 financial year,” said Jan Nelson, CEO of Copper 360 in November.