The New Green Economy is turning to copper…and it needs a lot of it. In a recent
Stockhouse article and industry forecast we examined, in detail, the impact that the copper mining sector has global on the economy…past, present, and future. And it’s the future where copper really begins to shine.
Because copper is an industrial metal
critical to the manufacturing and construction industries it is extremely sensitive to investors’ perception of global growth. The metal is closely tied to China, which accounts for roughly half of the world’s consumption.
But half-a-world away, in the Namib Desert of Namibia, a Canadian copper exploration and development company is helping to meet and satiate the hunger of industries with a voracious appetite for mass quantities of copper.
Deep-South Resources Inc. (DSM) (
TSX-V.DSM, Frankfurt: DSD,
OTC:JAUGF,
Forum), with its main project in Namibia, has a laser sharp focus on the exploration and development of quality assets in significant mineralized trends, close to infrastructure, and in established mining areas. Recently, the Company announced that it has received the results of the updated Preliminary Economic Assessment (PEA) from
METS Engineering Group on its Haib Copper Project in Namibia.
The PEA update was carried out to incorporate the results from the 2019 – 2020 Mintek metallurgical test work program and is based on the PEA report completed by METS in
February 2018. The report presents the findings of the optimized PEA focussed on the
heap leaching process route and is the only process technology option updated from the 2018 PEA.
DSM says the complete report will be filed soon on SEDAR under Deep-South's profile and on the web site of the company.
PEA Highlights:
- The deposit showed to be amenable to Bio-heap leaching
- Throughput of 20 Mtpa
- Copper recovery of 80 percent
- Production of 35,332 Tonnes Per Annum (tpa) copper cathodes and 51,080 tpa copper sulfate
- Copper price USD$2.50 per lb: after-tax NPV US $ 611 million; IRR: 22.7 percent
- Low Capex at USD$341 million
- Low-strip ratio at 1.41:1
- Pre-tax payback: 4.22 years, after-tax: 5.71 years
- Life of mine: 24 years.
President & CEO of Deep-South Pierre Leveille, commented on the outstanding assessment:
"We are thrilled with the updated PEA. By going with a heap leach treatment operation, we have been able to demonstrate robust economics to the Haib Copper Project. The past year metallurgical work enabled the project to show a potential low CAPEX and OPEX operation in a challenging copper price environment. With our recent Management nominations, we are well positioned to optimize and advance the project further."
Paul Smith, Deep South’s COO, went on to explain how the PEA results offer shareholders and investors a unique opportunity in the copper exploration and mining space:
“The updated PEA has set the scene for us to move towards a very exciting feasibility phase on Haib, with ever improving economics. The application of great technological advances in; geological exploration, mineral processing and extractive metallurgy will most likely see Haib rapidly becoming a global ‘tier one’ copper project, with the right economics for development. We have a tremendous project team, in Namibia, South Africa and Australia, and I really look forward to working with our team in moving the project into its feasibility phase, and beyond.”
Furthermore, the PEA is based only on the estimated indicated resource and the inferred resource is not part of the economic assessment, itself estimated at 342.4 million tonnes.
Investor Alert: DSM stock has more than doubled since May 18, 2020.
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Copper porphyry deposits are notoriously massive in scale and size, and the direct pipeline to start-up projects is the lowest in over a century. As a result, many analysts are expecting that the long-anticipated supply crunch might come sooner than expected.
Copper Forecast 2020
The long-term forecast for copper is bright, given the effects of supply and demand on prices, the explosion of the Electric Vehicle (EV) market and how this will increase demand for copper exponentially, along with how the copper mining industry is such a major contributor to the global economy. Copper prices rose in December 2019 to their highest levels in seven months, highlighting how a more optimistic view of the world economy is supporting riskier corners of the market.
The new green revolution will also impact global copper supply needs. Renewable energy systems have a ravenous appetite for copper, consuming approximately five times more copper than conventional power generation systems, making the base metal essential for any successful transition to fossil fuel alternatives. As reserves dwindle, existing operations will need to amp up production along with improvements and increases to recycling programs.
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Extensive and expansive new projects will need to be developed. And that’s where forward-thinking exploration companies like DSM have really begun to shine.
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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.