Deep-South Resources

Overview

Deep-South Resources Inc. (TSXV:DSM) is a mineral exploration company looking to advance its Haib copper project in Namibia towards production. With a stable democracy and economy, Namibia ranks as one of the best investment jurisdictions in Africa., where mining accounts for 12.5 percent of the country’s GDP. Namibia’s well-established mining policies are similar to those in Canada and Australia, attracting several of the world’s major mining players.

The Haib project lies close to the border of South Africa and is accessible by paved roads. This allows the company to move product to nearby railway stations once a production decision has been made. The property hosts five satellite targets, providing the company with the opportunity to expand the mine life and improve the project’s economics.

In 2018, Deep-South Resources released a preliminary economic assessment( PEA) and a resource estimate for the project. The PEA focused on four extraction options and offered numerous suggestions for improving the project’s economics. At a price of copper of US $ 2.65 per pound, the Haib has an after-tax IRR of 19.3 percent, an after-tax NPV (7.5 percent) of C$427.5 million and 55-year mine life for a throughput of 8.5 million tonnes per annum. At a throughput of 20 million tonnes per annum, the after-tax IRR is 23.7 percent, the after-tax NPV is C$782.6 million with a 24-year mine life. The resource estimate was used to calculate economics. The report outlined an indicated resource of 456.9 million tonnes grading 0.31 percent and an inferred resource of 342.4 million tonnes grading 0.29 percent copper.

In 2020, Deep-South Resources released the results of an updated PEA on the Haib project, confirming a throughout of 20 million tonnes per annum. The PEA conducted by Mets Engineering Group estimates a 24-year mine life and an after-tax NPV of US$611 million at a copper price of US$2.50 per pound. The PEA estimates a copper recovery of 80 percent resulting in the production of 35,332 copper cathode tonnes per annum and 51,080 copper sulfate tonnes per annum.

Deep-South Resources has also recently acquired a 75 percent interest in the Kapili Tepe copper-nickel–cobalt–gold project in Turkey. The property contains two IP anomalies that have the potential to host over 200 million tonnes of mineralization amongst multiple targets. Over 20 of these targets contain grades of over one percent copper. Deep-South Resources is working toward completing a NI 43-101 resource estimate for the property.

Deep-South Resources is led by an experienced management team and board of directors. Each member of the team has 15 to 40 years of experience in the mining industry with most of that experience based in Africa. Management holds 25 percent of the company’s shares.

Management is also complemented by its partners’ expertise. Deep-South Resources has worked with METS Engineering and Obsidian Consulting to develop resource estimates and the 2018 Haib PEA and works with Steinert and Mintek for the current metallurgical test work. The company has also attracted the attention of Teck Resources Limited (TSX:TECK.A), one of the company’s major shareholders, which owns 28 percent of the company’s shares.

Deep-South Resources’ Company Highlights

• Haib is one of the largest copper porphyry deposits in Africa, hosting a recently identified high-grade zone and numerous sizeable exploration targets.
• Located in the politically and economically stable country of Namibia.
• Past operators have completed an extensive database of exploration work at Haib.
• Haib has an indicated resource of 456.9 million tonnes grading 0.31 percent and an inferred resource of 342.4 million tonnes grading 0.29 percent copper.
• Updated 2020 PEA estimates a 20 Mtpa throughput with a copper recovery of 80 percent, a 24-year mine life and an after-tax NPV of US$611 million at a copper price of US$2.50 per pound
• Bio-assisted heap leaching at Haib shows recovery rates of 86 percent and 93 percent.
• PFS development is currently underway.
• The Kapilli Tepe project contains 20 near-surface targets that grade over one percent copper with multiple drill-ready targets.
• Teck Resources owns 28 percent of the company’s shares, making Teck Resources the largest shareholder.
• Deep-South Resources is led by an experienced management team and board of directors with numerous years of experience in the mining industry.
• Management and directors own 25 percent of the company’s shares.