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Canada’s Explorer in the World’s Largest Copper Producing Area

Dave Jackson Dave Jackson, Stockhouse
1 Comment| July 7, 2021

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In an August 2020 Stockhouse article, metals & mining investors were introduced to an mid-stage exploration company that’s ahead of the curve in copper.

Meet Midnight Sun Mining Corp. (MMA) (TSX-V.MMA, OTCMKTS: MDNGF, Forum) and their experienced CEO, Al Fabbro. The Company is currently focused on discovering copper and cobalt in the sub-Saharan African country of Zambia – one of earth’s most prolific, yet underexplored, copper producing regions. At present, MMA holds an 80% interest in the Solwezi Licences in the Zambian-Congo Copperbelt, located in the mineral-rich North-Western Province of Zambia.

Controlling an impressive land package in one of the largest copper producing areas in the world, and located adjacent to the largest copper mine in Africa – First Quantum Minerals Ltd’s (TSX.FM) Kansanshi Mine – Midnight Sun boasts a number of target areas which have proven mineralization and offer exciting potential.

The Company’s Solwezi Licences consists of contiguous exploration licences which cover over 506 square kilometres adjacent to First Quantum Minerals’ Kansanshi Mine – the largest copper mining complex in Africa. Midnight Sun Mining has entered into an Earn-In and Joint Venture Agreement with Rio Tinto to explore the Solwezi Licences.

In another Stockhouse exclusive article detailing the future global demand for copper (especially given the electric vehicle revolution and the ramping up of electrification projects in third world countries) we reported on how the price of copper is projected to increase as demand is expected to exceed supply moving forward through 2021.

Recently, Stockhouse Editorial sat down with Company CEO Al Fabbro to talk about all things happening under the ‘Midnight Sun’.

SH: To start off, Al, can you update our investor audience and your Midnight Sun shareholders on any new company developments, especially in the wake of the COVID-19 pandemic?

AF: I am happy to. Since the last time we spoke, Rio has completed their $3 million US due diligence spend. The original time frame to complete this work was 2 years and they completed it in 6 months. The work included geophysics, geochemistry, geology, air core drilling and diamond drilling. The goal of the work was to broaden the geological knowledge of the area and to develop drill targets for the next phase of exploration. This licence has very little outcrop and is under 30 to 40 meters of soil cover, so we rely on geophysics and geochemistry to guide our exploration.

Currently, Rio has begun the four-year $16 million US exploration phase, which, upon completion, will earn them an initial 51% of the licence. This program is multi-faceted and will include more soil sampling, air core drilling, RC drilling and diamond drilling. We expect the first results from this program to be made available this summer.

Covid has slowed down the exploration program to a degree but for the most part it has only been a minor irritation and crews have worked safely through this period.

SH: For Stockhouse investors that may be learning about Midnight Sun and copper in Zambia for the first time, can you tell us a bit about the history of MMA and mining in Zambia in general.

AF: We came to Zambia in 2012/13 looking for copper projects. Our Chinese partner had the Solwezi licences, we liked what we saw and did a deal to earn in on the project by spending $3.7 million and issuing 15.33 million shares of the company. We had initially joint ventured a Namibian copper project from them but they initial drilling results did not meet our expectations and we quickly moved off that project and onto the Zambian one.

Zambia has a long and important history of copper mining and some of the best copper mines in the world are in the immediate vicinity. For example, Kansanshi, which is run by First Quantum Minerals, is the largest copper mining complex in Africa. They were a micro-cap junior in the 1990’s until they purchased Kansanshi from Cyprus Minerals and 25 years later they are a multi-billion dollar market cap copper producer and Kansanshi is still their most productive mine.

SH: The Zambian-Congo copper belt is host to some of the world’s richest mines, with operators that include mining giants like Barrick, Glencore, Ivanhoe Mines, and First Quantum. Clearly, there’s a lot of big players in the area. Where do you see Midnight Sun positioning itself amongst them?

AF: Obviously, Midnight Sun is miniscule compared to these multi-billion dollar market cap giants and we view ourselves as quite fortunate to have acquired a large land position in this very prospective belt. Assuming exploration success, we would see ourselves more as a take-out candidate than a production development company. I believe the key point to remember in all this is with all these major companies in the vicinity all the issues of geology and jurisdiction have been answered. Zambia is a good place to do business, has great geology and the mechanisms are in place to seamlessly move from exploration to development. These are very important boxes that have all been checked and validated by the major mining companies operating in the region and a big part of why Zambia attracted us in the first place.

SH: The company announced in mid-April that mining giant Rio Tinto has commenced their initial 2021 exploration campaign on your Solwezi Licences in Zambia. This may be news to many investors. Can you unpack the benefits of it any drilling updates?

AF: Our licences, for the most part, are under 30 to 50 meters of cover. There is very little outcrop. The guiding exploration tools are geochemistry and geophysics. Rio has spent the last 15 months upgrading the data base and getting comfortable with the geology in order to better define drill targets. This work has resulted in enhancing known targets and developing additional targets that were previously unknown. Rio is currently reverse circulation and diamond drilling on several of the known targets and air-core drilling other new target areas. The results of this program should be available to us in the summer and will direct the work for the remainder of the year.

SH: In December, Midnight Sun & Rio Tinto Completed the initial work program phase at Solwezi. Can you expand on this initiative for our investor audience?

AF: Rio had 2 years to do a $3 million US due diligence exploration program on the licences which would determine their desire to formally enter into a joint-venture earn-in agreement. They completed the work in 6 months and entered into the agreement in November of last year. The significance of this was it validated the prospectivity of the project in terms of potentially hosting Rio Tinto size deposits.

SH: Midnight Sun boasts a number of target areas which have proven mineralization and offer exciting potential. Can you walk us through the project and the main Solwezi target zones?

AF: MMA had developed three main target areas: 22 Zone, Mitu and Dumbwa. The 22 Zone was the initial discovery area on the licence and we drilled some very high grade copper numbers but were never able to develop the continuity necessary to determine an economic deposit. The theory now is that the potential is at depth.

Dumbwa is a very large high grade soil anomaly (14 km of Cu ranging from 0.05% to over 0.7%) but limited drilling on the anomaly never properly explained it. A 2,600 meter drill program is scheduled to test a new geological model.

Mitu is a 17 km long trend on the western flank of the Solwezi Dome. The original theory was that it was a continuous ore body abutting the dome but geophysics have now shown that there are several separate and discreet anomalies along this trend. Rio will test several of them during this program.

SH: Al, can you tell us about the overall size potential of the deposits that you’re targeting at your Zambian properties? It sounds enormous!

AF: One of the first questions I asked Rio was “Why us?”. Their exploration manager stated they were looking for deposits in excess of 10 billion pounds (500mt @ 1%) and they felt there were at least 3 target areas on our licences that had the potential to host this size of a deposit. Our neighbours include First Quantum’s Kansanshi (in excess of 15 billion pounds) and Sentinel (10 billion pounds) mines and Barrick’s Lumwana mine (6.6 billion pounds). Then just across the border in the DRC we’ve got Ivanhoe’s Kamoa-Kakula mine (96 billion pounds) coming online which is another world class deposit in our area. So we know this region hosts some truly impressive orebodies.

SH: Back in April 2020, Midnight Sun Mining Corp. made a major announcement, reporting it had entered into an earn-in and joint venture agreement with mining giant Rio Tinto Mining PLC in which Rio Tinto can earn up to a 75% interest in Midnight Sun’s Solwezi Licences. That’s big news! Any updates?

AF: As stated earlier, Rio has spent the initial $3 million US to kick off the earn-in agreement. They have started the initial earn-in phase of exploration which will allow them to earn 51% of the project by spending $16 million US over 4 years. We expect initial results from the work this summer.

(Click image to enlarge)

SH: Since then, you’ve increased ownership in the project to 80%. How so and why?

AF: The Solwezi Project was a 60-40 joint ownership of the holding company (Zambian Highlight) between Midnight Sun and Kam Chuen (Chinese owned company). Kam Chuen has declined to participate in the cash calls related to the past few programs run by Midnight Sun and more recently by Rio. This has allowed Midnight Sun to be issued more shares of Zambian Highlight (Rio’s expenditures are on Midnight Sun’s behalf) and we now own in excess of 80% of the share capital of Zambian Highlight.

SH: Clearly investors have taken note of Midnight Sun. You’ve seen a nearly 300% increase in shareholder value since late June and a steadily increasing market cap. Now, institutional and retail investors are getting on board. How so?

AF: We are almost entirely a retail investor held company. We’ve always been a little too early for the institutions but we are hoping the results from the next programs, along with the validation of Rio Tinto’s involvement, will show the potential of our Zambian assets and attract an influx of professional investors. The timing of things is always important and right now we have a fast rising copper market, a major work program in place, a very committed senior partner to explore and develop these assets, and geology which can produce generational mines.

SH: And finally, Al, what can you tell our investor audience regarding the current valuation of your stock and why you think it’s still such a good value buy right now?

AF: Valuation is difficult for junior explorers before any resource delineation. What I look for is an acceptable risk/reward ratio. Great geology which hosts great mines, a great partner, a great commodity, and great infrastructure in a very favorable jurisdiction makes the chances of success reasonably high. The world is hungry for copper and large copper deposits and is willing to pay for them. We believe that Midnight Sun is on the cusp of a big discovery and that this is the perfect time to bring a big copper discovery to the world.


For more information, visit www.midnightsunmining.com.



FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.


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