Base Metals

Copper Investing

Khoemacau Copper Mines and parent company Cupric Canyon Capital have signed a US$565-million funding package for the Khoemacau project.

Khoemacau Copper Mines and parent company Cupric Canyon Capital have signed a US$565-million funding package for the Khoemacau copper-silver project in Botswana.

The funding package includes a US$275-million senior debt facility from Red Kite Mine Finance, a US$265-million silver stream from Royal Gold subsidiary RGLD Gold and a US$25-million subordinated debt facility from RGLD Gold.

The package is set to go towards constructing the Khoemacau project, which is docketed to be a 3.6-million-tonne-per-year operation. The resource at the center of the asset clocks in at 91 million tonnes at a head grade of 2.02 percent copper and 21.4 grams per tonne silver.

Direct construction costs for the project are estimated at US$397 million over a two-year timeline, with first copper concentrate production planned for the first half of 2021. Initial annual production is set to average 62,000 tonnes of copper and 1.9 million ounces of silver.

“Securing the project funding package by partnering with two of the industry’s leading global providers of mine finance, Royal Gold and Red Kite, allows us to move forward energetically with all project development activities,” Khoemacau CEO Johan Ferreira said in a statement.

“This step marks the completion of a remarkable evolution of the company from discovery of Zone 5 in 2012 to full construction of a high-quality copper asset in 2019.”

The Khoemacau project has been in development for the last six years, with Zone 5 becoming the asset’s flagship deposit after its acquisition in 2013. Its land package spans over 4,000 square kilometers and the project has an estimated 21-year mine life.

Upon closing the funding package, the company intends to continue exploration at Khoemacau with a focus on the Zone 5 North and Zeta Northeast discoveries, along with upgrading the expansion project’s prefeasibility study to a definitive feasibility study.

The expansion project entails constructing a new 5.8-million-tonne-per-year processing facility near Zone 5, which would produce approximately 100,000 tonnes of copper each year.

After hitting an eight-month high on Monday (February 25), copper prices were slightly up on Tuesday (February 26) reaching US$6,525 per tonne as of 11:35 a.m. EST.

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Securities Disclosure: I, Olivia Da Silva, currently hold no direct investment interest in any company mentioned in this article.



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