Midnight Sun Mining Corp V.MMA

HYDRA CAPITAL REPORT ON MMA

[Stevesack]

Midnight Sun Mining is a new one that I noticed when they announced a JV with KoBold Metals, an innovative privately-backed explorer with some serious mental and financial firepower behind them (you can look up KoBold at your leisure). KoBold is farming-in (spending $15mm to earn 75%) on MMA’s Dumbwa target, which is hoped to have a billion-tonne copper deposit hiding somewhere within its JV boundaries. Aside from that target, there are a handful of other exploration areas that MMA keeps 100% of, but the real cherry on top with MMA is the near-surface copper oxide mineralization next door to First Quantum’s Kansanshi mine, which juuuust happens to be out of oxide ore. The plan/idea/hope is to dig up and truck near-surface copper oxide mineralization from MMA’s Kazhiba Dome property straight over to FM’s existing operation just ~7 kilometres away. FM is motived to run oxides at Kansanshi because the company continuously generates sulphuric acid as a byproduct of ongoing sulphide mining operations and it needs to neutralize that acid somehow. Historically, they’ve done that by spraying the sulphuric acid on oxide heap-leach pads, making money and lowering costs at the same time. But alas, FM is out of oxides at Kansanshi and Midnight Sun is right there at the doorstep with some impressive hits (e.g., 14m of 5.7% Cu, 24 metres of 3.15% Cu, and 8 metres of 5.1% Cu) at and near-surface. MMA will soon close an upsized financing and, in about a month or so, should start a rapid-fire shallow RC drilling program to feel out an oxide resource. Between oxide drilling at Kazhiba and exploration drilling at Dumbwa, MMA should be newsy through the summer and well into the fall. The prospect of a very short path to production, potential substantial cash flows relative to its $25mm market cap, and Big Exploration potential all in one package was too appealing for me to pass up. Zambia is one of the best mining jurisdictions in Africa, so I’m taking a shot here on a name that almost no one has heard about, but that’s regularly travelled territory for me, so let’s see what happens.