Overview
Copper has been called “the new oil” by market analysts due to its importance in current and future technologies, especially emerging green technologies. Its importance has some analysts anticipating that there could be a copper supply deficit of 4.7 million metric tons by 2030. Plus, with policymakers around the world working to create emissions reduction strategies that call for the development of alternative energy sources, it’s clear why copper is becoming so important in the global economy.
Copper is a key component in the manufacturing of windmills, solar panels, electric vehicles and next-generation batteries. Of course, copper is already in high demand for a plethora of popular devices, ranging from smartphones to copper tubing as well. Failing to address the impending deficit could lead to significant price increases.
Cyprium Metals (ASX:CYM) is an Australian-based mid-tier mining company focused on developing multiple copper projects throughout Western Australia. The company has projects throughout Western Australia at various stages of development. Cyprium Metals unlocks the value of copper projects through its highly credentialed management team headed by engineers with years of experience in the mining industry.
The Company’s Nifty copper mine project is located on the western edge of the Great Sandy Desert in the north-eastern Pilbara region of Western Australia. Nifty used to be open pit oxide copper mine which transitioned to an underground sulphide mine in 2006. From then on until 2019, Nifty has produced more than 700,000 tonnes of copper metal.
In 2022, Cyprium reported a significant increase in the project’s mineral resource estimate after the Nifty West Extensional Infill drilling program results showed potential to define additional shallow mineralisation for the planned heap leach restart. The revised total copper resource was up 28.4% to 940,200 tonnes of copper with the Oxide copper resource growing to 144,300 tonnes of copper. This did not include ethe results from the East Extensional drilling programme.
Cyprium has released its Restart Study and has commenced the finance process for the Restart. As a result of the process CYM entered into an Offtake financing arrangement of AUD$50 million for 120,000 tonnes of the Copper Cathode produced during Phase 1 of the Nifty Copper Project restart. The due diligence and documentation stage of the finance process for both Senior Debt and the Offtake prepayment facility are continuing.
Copper ore mined from the Nifty project will be processed into LME Grade A copper metal plates on-site, allowing Cyprium to increase its profits as manufacturing copper plates instead of selling copper concentrate is more profitable. Producing copper plates on-site is an essential aspect of the company’s plan to quickly generate cash flow.
Cyprium Metals aims to develop other projects located throughout Western Australia with an impressive portfolio containing +1.6Mt of copper throughout all its projects. It is currently advancing the Murchison Copper Project (includes two copper deposits), Maroochydore Copper Project, and the Paterson Exploration Project (a 70% earn-in arrangement with IGO Limited).
Highlights
- Cyprium Metals is a near term copper producer – heap leach operation targeting second half 2023 production
- The company has a highly credentialed management team with the experience to grow each of their projects
- The company is focused on its Nifty open pit heap leach copper strategy to produce LME grade A copper cathode metal plate
- The company has a portfolio of development opportunities with over +1.6Mt of contained copper in mineral resources
- Secured AUD$50 million offtake prepayment facility for its Nifty Copper Project
Key Projects
Nifty Copper Mine
The Nifty Copper Mine was acquired by Cyprium Metals in March 2021 and has produced a substantial 714,908 tons of copper metal since the mine commenced production in 1993.
The project contains extensive on-site infrastructure including a copper concentrator, an SX-EW processing plant, a gas turbine power station, a complete heavy vehicle workshop, an accommodation village, and a completely sealed airstrip. This existing infrastructure allows Cyprium Metals to begin production in a short period of time.
Cyprium Metals has executed several important steps on the path to production, such as conducting a +20,000-meter resource expansion program on the Western and Eastern end and appointing key managers for the site and technical roles.
The company produced a Restart Study for the Nifty Copper Project with the following highlights;
- 146,100 tonnes copper plate produced during Phase 1 oxide pit 6.3 year life
- Free cashflow of $544M
- C1 Costs at USD1.91/lb, C3 at USD2.82/lb
- Revenue at USD9,000 and $0.75 FX(AUD:USD)
- Pre production capital $149M and max cash drawdown of $193M
- NPV (7%) $277M with an IRR of 37% with 3.0 years payback
- Phase 1 oxide pit only consumes <10% of the Mineral Resource Estimate
- Total mined and stacked – 25.9Mt @ 0.65% copper
- Copper Recovery for Heap Leach Retreat at 85% and for Oxide Ore at 90%
Murchison Copper Project
The Murchison Copper Project is a resource development opportunity that is still being explored. It contains two complementary deposits, Hollandaire and Nanadie Well. The Hollandaire mine contains 2.8 mt of copper at 1.9 percent, and additional sampling revealed the presence of 28Koz gold and 0.5Moz silver. This deposit is located approximately 20 kilometers east of Cue Township.
The company recently completed a drill campaign with promising results at Nanadie Well. Cyprium also released the maiden mineral resource estimate for the Nanadie Well deposit to a JORC 2012 standard. The Nanadie Well polymetallic orebody, preliminary Mineral Resource Estimate of 40.4 Mt @ 0.4% Cu included 162,000 tonnes copper, 130,000 ounces gold, 1,364,000 ounces silver, 2,200 tonnes cobalt, 11,900 tonnes nickel and 6,500 tonnes zinc. The Nanadie Well deposit extends to within one meter from surface, remaining open at depth and along strike to the north.
Maroochydore Copper Project
The Maroochydore Copper Cobalt Project already contains a substantial copper resource which has the potential to become bigger. Originally discovered in 1984, the project has significant shallow oxide and sulfide mineral resources estimate that contains more than 480,000 tonnes of copper. The project area also contains cobalt. Historical drilling has already identified multiple high-priority targets for follow-up exploration.
Despite being discovered in 1984, the project area remained undeveloped due to the metallurgical complexities of the orebody, such as high acid consumption and some of the copper being tied up in difficult-to-access mineralisation. The mineralisation of the Maroochydore Project is similar to the Nifty Project as they are both part of the Broadhurst formation. As such, the company will begin testing ore-sorting and alternative leaching technologies to effectively extract copper. Depending on how testing goes, the same or similar practice used at Nifty may be deployed at Maroochydore.
In 2022, Cyprium released the remaining assay results from the initial drilling campaign which was completed in 2021 and confirmed the expansion potential of the Maroochydore copper-cobalt resource. The program also revealed near-surface oxide copper-cobalt mineralisation extended to 3,000 meters long, up to 500 meters wide and up to 100 meters thick. CYM are in the process of completing a resource update for Maroochydore.
Paterson Exploration Project
The Paterson Exploration Project is a joint exploration venture with mining company IGO Limited. IGO are committed to spending $32M to earn 70% of the project over 6.5 years. This project covers 2,400 square kilometers of mineral licenses and significant recent discoveries in the Paterson Province in WA. There are numerous exploration targets throughout the current exploration tenure. At present, large regional soil sampling and air-core drilling at identified priority targets are underway.
Management Team
Gary Comb – Non-Executive Chairman
Gary Comb is an engineer with over 30 years’ experience in the Australian mining industry, with a strong track record in successfully commissioning and operating base metal mines. He was Chairman of Finders Resources Limited from 2013 until its takeover in 2018. Comb was previously the Managing Director of Jabiru Metals Limited and the CEO of BGC Contracting Pty Ltd.
Barry Cahill – Managing Director
Barry Cahill is a mining engineer with over 30 years of experience in exploration, operational mining and management. In particular, his experience covers the management of project development and construction from exploration drilling through project funding, commissioning and development. He was the Managing Director of Finders Resources Limited from 2013 until its takeover in 2018. Cahill has previously been executive director of a number of public companies including operations director at Perilya Limited and Managing Director of Australian Mines Limited and Norseman Gold Plc.
Nicholas Rowley – Non-Executive Director
Nicholas Rowley is an experienced corporate executive with a strong financial background with over 15 years specializing in corporate advisory, M&A transactions and equities markets. He has advised on the equity financings of numerous ASX and TSX-listed companies predominantly in the mining and resources sector. Rowley currently serves as an executive at Galaxy Resources Ltd and as a Non-Executive Director of Titan Minerals and Oro X Mining Corp.
Wayne Apted – Chief Financial Officer And Company Secretary
Wayne Apted is a chartered accountant with over 25 years’ experience in the mining industry. He was the Chief Financial Officer of Finders Resources Limited until its takeover in 2018. Mr Apted has previously worked in senior finance roles for Masan Resources Limited, Glencore plc, Xstrata plc, Normandy Mining Limited and Aurora Gold Limited, both in Australia and global locations.
John Banning – Chief Operating Officer
John Banning is a mining engineer with over 20 years of experience, including project development, operations, technical, business improvement and management. Mr Banning has previously been a consultant, Managing Director of Consolidated Tin Mines Ltd and worked at Kagara Ltd, Newcrest, Rio Tinto, BHP, Xstrata Copper, Metals X and Goldfields.
Peter Van Luyt – Chief Geologist
Peter van Luyt is a geologist with 30 years of experience in mining, development and exploration geology. He commenced his career as a mine geologist working in gold mines. Since 2004 he has been a contract and consultant geologist specialising in the development of and exploration of base metals and gold projects in Australia, Papua New Guinea and Canada.
