Companies across the globe are trying to create innovative, sustainable solutions in a world where curbing carbon emissions are crucial. As the popularity of green energy alternatives continues to rise, the need for a particular resource is becoming more important…Copper.
Copper is increasingly in demand as wind farms and electric vehicles (EVs) utilize its valuable by-products. Today, most of the world’s Copper production comes from Chile, Peru, and China. But one Canadian mining company hopes to become a major player in providing the metal.
Deep-South Resources Inc. (DSM) (
TSX-V.DSM, Frankfurt: DSD,
OTC:JAUGF,
Forum), announced it has released the results of the updated Preliminary Economic Assessment (PEA) from METS Engineering Group on its Haib Copper Project in Namibia. Due to recent increases in the copper price to well over $3.00 per lb, the Company revised the PEA on its 100 per cent-controlled project.
The price of copper increased this year due to global demand recovering from seven-year lows around USD$4,330 per tonne in January 2015.
President & CEO of Deep-South, Pierre Leveille, said this about the update:
"We are extremely encouraged by the results of our updated PEA. Its economics have improved dramatically. Our base case model using a price of US $ 3.00 per lb shows an after-tax NPV of US $957million and an after tax IRR of 29.7 per cent. Moreover, at a copper price of $3.50 per lb our Haib Copper project shows an after-tax NPV of US $ 1.3 billion and an after-tax IRR of 42.1 per cent. Of note, our current market capitalization is only 0.8 per cent of this NPV. We are highly encouraged by the solid copper market outlook and with the funds in-hand we are confident that our coming exploration and development program will bring strong added value in 2021 and onward.”
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$3.00 per lb: after-tax NPV US $ 957 million; IRR: 29.7 percent
- Low Capex at USD$341 million
- Low-strip ratio at 1.41:1
- Pre-tax payback: 4.22 years, after-tax: 4.23 years
- Life of mine: 24 years.
Copper Forecast 2021
Going into 2021, the forecast for copper is positive. Capital Economics predicts the price of copper will have short-lived surges ranging from USD$7,000 to USD$8,000. The company also says the average price will reach US$6,800 but cautions that the slow economic recovery in the US and Europe due to the pandemic may affect the price.
The
International Copper Association commissioned a study about the impact of renewable energy on copper demand and found that by 2027, demand will increase by 56 per cent. This means that an additional 813,000 tonnes will need to be added to current production levels. By 2027, it is expected that increased demand from electric vehicles will send copper production even higher, to an expected 1.74 million tonnes per year for EV’s alone.
Why invest in DSR?
The Company concludes that the results from the PEA are promising and provides support to move the project towards the feasibility study phase on the deposit. DSR has set a target of achieving 85 per cent copper recovery as a basis of design in the feasibility study. Some parameters to be evaluated in this study include recycled column leaching, different bacterial strains and the optimization of nutrient addition to the leach.
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DSR believes the work conducted to date provides confidence to move forward and that there is every possibility of improving copper recovery and reducing operating costs further.
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For more information, visit
deepsouthresources.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.