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Cyprium Metals
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 AU$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 $544 million
- C1 Costs at US$1.91/lb, C3 at US$2.82/lb
- Revenue at US$9,000 and $0.75 FX(AUD:USD)
- Pre-production capital of $149 million and max cash drawdown of $193 million
- NPV (7 percent) $277 million with an IRR of 37 percent with 3.0 years payback
- Phase 1 oxide pit only consumes <10 percent of the Mineral Resource Estimate
- Total mined and stacked – 25.9Mt @ 0.65 percent copper
- Copper recovery for heap leach retreat at 85 percent and for oxide ore at 90 percent
The oxide heap leach SX-EW will produce approximately 25,000 tpa of copper cathode over seven years and the sulphide concentrator would produce between 28,000 tpa (2.8 Mtpa at +1.0 percent copper) and 40,000 tpa (4.0 Mtpa at +1.0 percent copper) of copper in concentrate over 15 years. These assets would support a long mine life project in excess of 20 years.
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
Matt Fifield - Non-executive Chairman
Matt Fifield is the managing director of Pacific Road Capital, a leading resource investment firm that has managed over $1 billion in funds raised to develop and enhance resource companies around the world.Fifield has participated in over $10 billion of capital raising and M&A transactions across his career and is a leading voice on responsible resource investing. He is a frequent speaker and contributor around issues of sustainable development practices.
Clive Donner - Managing Director
Clive Donner is an experienced mining private equity and financing expert, who has been engaged to lead the company’s focus on corporate development and capital raising initiatives for the board. Donner has financed over 50 mines globally and founded two private equity funds focussing on emerging and mid-tier mining companies. He was previously a director of Rothschild Australia responsible for mine development financing.
Ross Bhappu - Non-executive Director
Ross Bhappu is currently a senior strategic advisory partner at Resource Capital Funds (RCF), and previously served as its head of private equity funds. He is a seasoned mining executive, investor and highly experienced director with technical and financial expertise having managed a portfolio of investments over his 35-year career. Before RCF, Bhappu was CEO of a development stage mining company, served as director of business development for Newmont Mining Corporation and various technical and commercial roles for Cyprus Minerals Company.
Gary Comb - Non-executive Director
Gary Comb is an engineer with over 30 years of 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.
Milan Jerkovic - Chief Operating Officer
Milan Jerkovic is an experienced mining veteran who will assist in the execution of the development plan for Nifty and provide leadership input to the development team in the company. Jerkovic has previously built several mines, with substantial and relevant copper expertise. Jerkovic's career has been based around building resource companies from early stage, under-financed geological opportunities to fully engineered, built operations and capitalized companies.
Manu Trivedi - Chief Financial Officer (Interim)
Manu Trivedi is a chartered accountant and a CPA with 16 years of experience in the areas of financial & business strategies, controllership, compliance, and leadership across various industries covering mining, power generation and retail, hospitality, commodities trading and education. Trivedi has previously worked as group financial controller for tungsten miner Masan Resources and has held other senior finance positions for mining projects in South Africa.
David Hwang - Company Secretary
David Hwang is a corporate lawyer, company secretary and advisor to Boards and management of pre-IPO and ASX listed entities. Hwang regularly advises emerging and listed entities across a range of compliance, legal, governance and strategic matters. Hwang is the managing director of Confidant Partners, which provides ASX compliance, company secretarial and board advisory services. Before this, David was a senior executive at a leading integrated technology solutions and professional services provider, where he led Australia’s largest outsourced company secretarial and legal team.
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 for base metals and gold projects in Australia, Papua New Guinea and Canada.
Gavin Hammer - GM for Nifty Copper Project
Gavin Hammer is a maintenance professional with over 30 years of experience, including constructing, commissioning, optimisation, asset management of process plants and mobile fleets. Before joining Cyprium Metals, Hammer worked with Finders Resources followed by two years in Western Africa in operational and project construction roles.
Harrison Donner - GM for Commercial and Investor Relations
Harrison Donner has relevant expertise in capital markets, investor relations and business development across the mining and resources sectors. Donner previously worked in corporate finance and accounting at EY where he completed his CA and subsequently worked in New York consulting on M&A advisory and operations strategy.
Bernard Etschmann - GM for Processing and Engineering
Bernard Etschmann is a metallurgist with over 30 years of experience working with multidisciplinary teams from early study phases through to detailed technical design, construction and commissioning. Etschmann has gained experience in various parts of the globe including countries in Africa, Asia, Europe and Australasia.