Cupric Africa: developing Botswana’s mineral assets
Cupric Africa (the mining arm of Cupric Canyon Capital) has positioned itself to become a significant player in Botswana’s copper sector; having complied with various regulatory measures and having deployed its resources strategically, the company is now set to solidify production at one of the most important copper discoveries in the past few years.
In 2013, Cupric Canyon Capital acquired two important mining properties in connection with its purchase of Hana Mining; these are known as ‘Banana Zone’ and ‘Zone Five’ and contain significant copper deposits, including some silver credits. Sam Rasmussen, Cupric’s CEO for Africa, explained that, following some previous exploration and drilling undertaken by the previous owners, the company had stepped up work, particularly in Zone Five.
He said: “There was a very small time period from when Cupric took over to the realisation that we should step up operations at Zone Five, where geologists realised that there was more copper than we first realised.
“Banana Zone is large, with low grade copper; Zone Five is also large (now very large!) And has very high grade. Cupric began drilling in 2013 and went where Hana hadn’t covered. The drilling totals around 175,000 metres, mainly concentrated on Zone Five.”
“As you drill and identify so much reserve or resource is the better word you have to put plans to it. We put plans to that and on March 9 2015 we were granted mining licenses to both sites. The mine continues to get bigger and the studies we do also have to grow. We have a robust project as it is, but it’s getting larger and the grades are increasing; we are seeing some higher grade deeper down.”
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As the current phase of drilling in Zone Five nears completion, the deposit is expected to contain nearly 100 million tonnes of mineable sulphide copper ore, Rasmussen said: “We are expecting 50,000 tonnes per annum of copper metal over the ten year period; that translates to 125,000 tonnes per annum of concentrate annually.”
He added that Zone Five also contained silver credits which are about 380 grams of silver per tonne of concentrate, providing roughly 1.5 million ounces of silver each year. The copper concentrate has an average of about 40 percent purity.
Being in a financial position to weather the challenges of the copper industry (not to mention the recent fall in global copper prices) Cupric has been able to leverage its strong capital position to strategically acquire assets that will complement its operations.
Cupric’s wholly owned subsidiary, Khoemacau Copper Mining Pty. Limited (KCM) acquired the Boseto assets and licenses formerly owned by Discovery Metals Limited when it went into liquidation earlier this year.
Rasmussen said: “We purchased the Boseto operations from a liquidator for $34 million. Now we will combine the Boseto plant infrastructure with the Zone Five mine which will come together to make an attractive copper and silver concentrate producing operation”
Specifically, the Boseto plant will provide Cupric with a milling capacity which is located only 30 kilometres from Zone Five’s operations; these combined factors will enable the company to make significant capital expenditure savings in the mid to long term.
The volume and quality of Cupric’s mineral asserts (particularly copper) has put the company at a naturally competitive advantage, but the company also strongly benefits from its strategic financial partnership with Barclays Natural Resource Investments (BNRI).
Rasmussen said: “We have 2 percent copper in the ground at Zone Five whereas Banana Zone was only 0.6 percent over all. This is obviously a marked change and with the structurally controlled nature of the Zone Five deposit allows it to be readily and easily mined using underground methods.
“In terms of size, we have identified about 100 million tonnes of resource. We have a 3.6 million tonne per annum plant, a 25 plus year lifespan. Size is how we distinguish ourselves. We have a larger denominator, therefore our unit costs are down. I can safely say that on operating costs we are in the lowest quartile of copper producers.”
He also explained that receiving the majority of its funding from BNRI was also a strategic advantage, since the bank had a seat on the board, supported by a team of industry experts. He added: “Barclays are obviously very big. They’re experienced and results driven, and they have a very thorough methodology. For every dollar we spend they rightly expect to see an increase in value.”
Clare Calver, Head of Human Resources and Communications explained that not only did her team have to tackle the ‘everyday’ Human Resources trials faced by mining companies, but also navigate the challenges of operating in a remote part of Botswana. She explained how the company was facing up to this challenge: “We have done a lot of benchmarking – we have worked with consultants based in Botswana to inform our benefits strategy.”
“We have made a commitment to the local communities where we look to resource lower-skilled positions from the local communities and the local district. Expatriates are built into our model and will be a reality for the first few years of our operation. We will have a job shadowing programme; for every expat we find a national counterpart. Skills transference will be closely monitored.
“We are very mindful of the psychosocial aspect – they are surrounded by bush and sand for three weeks at a time. We operate in a very remote part of the country and try to keep our staff busy on the social side so they have other outlets. We make sure that they have recreational opportunities. We have been very successful thus far and will continue to be so.”
Furthermore, she added that Cupric Africa has gone beyond the norm in an effort to ensure that its workforce is well looked after, backed up by the consultancy work taken with Botswana specifically in mind. This has culminated in the provision of a comprehensive employee benefits package which includes pensions, medical aid and bonus schemes.
In short, in just a few years Cupric has been able to become a significant player in Botswana and has done so by not only making the right financial investments, but also by ensuring that its teams are both well trained and well provided for. Its future, and potential legacy in the region are certainly both exciting.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.