Deep-South shares up 61% on Namibia copper license news
Deep-South Resources Inc. [DSM-TSXV, DSD-Frankfurt], a company held 16% by Teck Resources Ltd. (TECK.B-TSX, TECK.A-TSX, TECK-NYSE), said it is set to resume development work at the wholly-owned Haib copper project in Namibia after announcing that the license covering the project has been renewed.
The shares rallied sharply on the news, rising 61.5% or $0.04 to 10.5 cents on volume of 860,940. The shares are currently trading in a 52-week range of 12 cents and $0.03.
Haib Copper is a large copper/molybdenum deposit situated 40 kilometres from the southern border of Namibia. The license covers 370 square kilometres (37,000 hectares). Over the years, the project has seen 70,0000 metres of drilling, many metallurgical tests, geophysical surveys, geological mapping, mine modeling and even a feasibility study in 1996.
In press release on June 24, 2021, Deep-South said it had received notice from the Minister of Mines and Energy of Namibia confirming that the company’s application for the renewal of its Exclusive Prospecting License 3140 had been refused.
At the time, Deep-South was working to complete a 10,000-metre drill program, was starting more metallurgical test work and was starting an updated resource estimation that was to serve as the basis of a feasibility study.
In its June, 2021 press release, Deep-South said it planned to vigorously contest the government’s decision not the renew the license. The company claimed that it had met all criteria under the Minerals (Prospecting and Mining) Act to justify the renewal of the license.
As disclosed in a press release on June 1, 2021, the company received notice from the Ministry informing the company that its application for the renewal of the license had been denied, citing the company’s inability to advance the project to pre-feasibility and complete the proposed drilling program as planned.
The company maintains that the Ministry was kept well appraised, with no objection on their part, of a proposed change from the pre-feasibility study to upgraded Preliminary Economic Assessment (PEA) and commencement of a full feasibility study.
As a result of the Minister’s refusal to renew the license, the company terminated all work on the site and proceeded with the retrenchment of its employees on site.
In a press release Monday, the company said the development program will resume as soon as possible.
The Haib project hosts an indicated resource of 456.9 million tonnes of 0.31% copper or 3.12 billion pounds. On top of that is an inferred resource of 342.4 million tonnes of grade 0.29% copper or 2.19 billion pounds.
Results of a preliminary economic assessment (PEA) announced in December, 2020, indicated that the project is amenable to bio-heap leaching and can potentially produce 35,332 tonnes of copper cathode and 51,080 tonnes of copper sulfate annually within a lifespan of 24 years. The estimate is based on a copper price of US$3.00 a pound.
The PEA forsees a low capital expenditure of US$341 million, and after-tax payback in 4.23 years.