Could you provide us with a bird's eye view on the company's projects?
Deep-South Resources is an exploration company mainly focused on the Southern part of Africa, specifically in Namibia and in Zambia. The Namibian project has suffered a legal dispute with the Government for the last two years, but it is now nearly resolved, and the license was renewed on July 7, 2023. While in Namibia we are on the verge of starting the feasibility study, the Zambian site is in early pre-drilling stages.
What were the specific circumstances with the legal dispute, and what is your take on doing business in a country like Namibia?
Namibia has a stable political context and it is a mining friendly jurisdiction, being considered one of the most business friendly countries in Africa. The conflict in which we were involved is not typical to the country, and it was actually sparked by two senior advisors at the Ministry of Mines that implied that our project is not fit for a license renewal in 2021. We went to court to seek a review of the decision, and in March 2023 we got the verdict, whereby the judge ruled in our favor. After the final hearing in court, it was revealed in the social media and further in the traditional press that two senior officers of the Ministry were trying to convince the Minister to refuse the renewal of certain licenses, and only issue new permits to a company owned by one of their relatives. This hijacking procedure succeeded in other cases, and they actually managed to sell a lithium project to a Chinese company for $4 million. Thankfully, we managed to get out of this in getting our licence back, and having had this experience, we came to appreciate how the rule of law prevails in Namibia.
What is the potential of the area that you are exploring at the moment?
Haib Copper hosts a resource of, near 1 billion tons of low-grade ore at 0,31% copper. The deposit has always been identified as a porphyry, similar to the ones found in the Western edge of the Americas, hence many companies explored the site with the same methods used in the Andes in Chile. However, the deposits in Namibia are 1,8 billion years old while those in the Americas are only 200 million years old, resulting in a totally different geology. Using vertical and wide space drilling, it is easy to skip higher-grade areas, but as we employed a different system, we were able to identify specifically many high-grade structures that were never mapped. After drilling in them, we obtained results ranging between 0.35% and 1% grade copper. With those results we foresee a possibility to increase the average grade between 0.40% and 0,45%, which makes a huge difference from an economical point of view.
Instead of settling for the classical options, we opted for bio-heap leaching, a process where we add bacteria in the sulfuric acid to accelerate the extraction of metals. This procedure works only when special parameters are met (the right altitude, climate, etc.), and we have been fortunate to fit this bill with our project in Namibia. For the same level of production, the capital investment for our project would be $340 million, but if we go to classical extractions methods it would be $1.1 billion.
How far advanced are you in your efforts with the project in Namibia and what is the vision to further advance it?
With the license renewed very recently, we will resume the feasibility study, which is the last step before construction. The plan is to do a feasibility study over the next two years, and, at the same time, undergo an environmental and social impact study. We plan to develop the project and put it in production ourselves, but we do not exclude the possibility that at some point in time, we will either be in partnership with, or acquired by a larger player.
What do you need to have in order to achieve all these objectives?
We need to ensure that the bioleaching technology will be as successful as we have seen in the tests done on one ton of samples. In addition, we believe we can improve the recovery of copper from a sustainable basis of 82% to 87%. To complete the feasibility study we will need $7,5 million, which will definitely be raised via private placement of shares in the company. Following these, the next step is to build a pilot plant whose development will be supported through streaming royalties on the near future production, offtakes or a potential takeover. All in all, we aim to produce 51,000 tons of cathodes and 55,000 tons of copper sulfate per year because the world needs copper not only for the transition to electric vehicles in 2035 or 2050, but for all the sectors that pertain to modern life.
