COPPER-SILVER: Cupric Canyon Capital secures financing for Khoemacau project

BOTSWANA – A US$565 million funding package brings Cupric Canyon Capital one step closer to turning its Khoemacau project into a major copper and silver mine in northwestern Botswana. The private company has been developing the project over the last six years, drilling 285,000 metres, completing permitting and land access agreements, securing required power and water, and acquiring a previously operated copper project and 3 million t/y processing plant adjacent to its flagship zone 5 deposit. The recent financing includes a US$275 million senior debt facility from Red Kite Mine Finance along with a US$265 million silver stream and US$25 million subordinated debt facility from RGLD Gold AG, a subsidiary of Royal Gold. The money will be spent on building the Khoemacau “starter project,” which involves underground mining of sulphide ores at zone 5 at a rate of 3.6 million t/y. The project is expected to produce a copper concentrate with an average head grade of 40% and high grade silver, resulting in annual production of 62,000 tonnes of copper and 1.9 million oz. of silver over a 21-year mine life. Construction is forecast to take two years and Cupric Canyon expects to produce its first concentrate in the first half of 2021. The company discovered zone 5 in 2012 and says it is one of numerous deposits on the 4,040 km² land package. Zone 5 is described by the company as a sedimentary hosted stratiform copper deposit. Total development capex for the starter project is US$397 million. The mine plan involves three separate but adjacent underground mines developed at zone 5, each producing 1.2 million t/y on average during the first five years of production. Each of the mines will have its own independent ramp access and operate over a strike length of about 1,000 metres. The mineralized material will be trucked 35 km to the Boseto processing facility Cupric Canyon acquired in 2015. The concentrate will be shipped to smelters in Africa and around the world. Longer term, the company plans to expand the operation from 3.6 million t/y to 5.8 million t/y by building a standalone processing plant at zone 5. The company plans to undertake a feasibility study on the expansion project, which would copper production up to 100,000 tonnes per year. Khoemacau has JORC-compliant proven and probable reserves of 30.4 million tonnes grading 2.03% copper and 19.5 g/t silver. In addition to zone 5, the company has targets including zone 5 North and the Zeta northeast deposits. Khoemacau is in the central Kalahari copper belt, 65 km southwest of Maun, one of the largest towns in Botswana and the gateway to the Okavango Delta. Cupric Canyon was set up in 2010 in partnership with funds advised by Global Natural Resource Investments (GNRI) and Cupric management to acquire and develop copper assets. GNRI was formed by a management buyout of the former Barclays Natural Resource Investments private equity business from Barclays Bank Plc in October 2015. This story first appeared on www.NorthernMiner.com.