Acquisition of Nama Copper Resources
Copper 360 and Mazule Resources Proprietary Limited (“Mazule”), the shareholder of Nama Copper, have entered into an agreement to acquire all the shares and claims in Nama Copper for a consideration of R200 million (“the Transaction”). The key benefit of the Transaction is that it will significantly increase the Company’s copper concentrate production capacity and output, with the 2025 output more than doubling compared to the original estimates.
RATIONALE FOR THE TRANSACTION
Copper 360 will benefit in a number of ways from the Transaction, including:
- Increased surface rights contiguous to Copper 360 ‘s Nababeep Processing Facility;
- A fully operational copper concentrate plant with the capacity to treat 20kt/month of copper sulphide ore at recoveries of between 88% to 92%;
- Additional copper tailings resources representing approximately 22,9Mt with a grade between 0,35% and 0,65% Copper in situ, as well as an additional copper slag resource;
- Additional diesel generator capacity of 2.5MW;
- An operational fleet of yellow equipment;
- A mining licence together with a water use licence application ready for submission;
- Increased tailings disposal optionality for the group; as well as
- An offtake agreement with Mazule for copper concentrate produced, including the provision of a R50 million working capital facility (refer to significant terms of the acquisition below for detail in this regard).
Jan Nelson, CEO of Copper 360, South Africa’s only listed copper producer, commented; “The acquisition of Nama Copper is a game changer for Copper 360. It allows us to more than double our concentrate production of 3,899 tonnes of copper metal per annum planned from the current concentrate plant, which is in the final construction phase, to 7,975 tonnes of copper metal per annum. The Nama Copper concentrate plant is fully operational and will increase production by 3,595 tonnes of copper metal. The Nama Copper plant will ensure that the revenue of R2,2 billion planned for the FY 2026 will now be able to be delivered in FY 2025. The ore feed for both plants will come from the Rietberg mine. In addition, the copper tailings resource being acquired represents between R12 billion to R24 billion in copper metal in the ground at a copper price of US$8,500/t and an exchange rate of R19.00/USD and could result in a significant increase of the Company’s Measured and Indicated Resource category upon further confirmatory drilling. The sellers of Nama Copper have also agreed a commercially competitive offtake agreement through one of its associate companies with Copper 360.”
THE NAMA COPPER BUSINESS
Nama Copper is a copper producer located adjacent to Copper 360’s operations in Nababeep. It has historically processed copper slag through a sulphide flotation plant that is almost an exact replica of the modular flotation plant that Copper 360 is currently constructing.
Nama Copper’s slag operations have become uneconomical, and it has not been able to replace the slag with economically viable sulphide ore resources. The plant has the capacity to treat 20 000 tonnes of sulphide ore per month with recoveries between 88% and 92%. In addition, Nama Copper owns significant tailings resources.
Nama Copper also operates a metal reclamation plant on its Nababeep premises but that is specifically excluded from the Transaction. Mazule is entitled to continue operating the metal reclamation plant from the Nama Copper premises for a period of two years from the date of the First Tranche payment on a “no charge” lease.
