Nzuri Copper published a DFS for your flagship project in DRC earlier this year. Please provide a brief company overview and outline where you are in the process today.

Nzuri Copper Limited is an ASX-listed, Australia-headquartered exploration and development company focused on the identification, acquisition, development and operation of high-grade copper and cobalt projects in the Copperbelt region of the DRC. Our flagship project, Kalongwe, is a near-surface oxide resource. In April this year, we released an updated DFS showing strong economic viability for developing a stand-alone, low CAPEX, open pit mining operation. The DFS indicates an ore reserve of 7.99 million mt at 2.94% copper and 0.34% cobalt for 234,868 mt of contained copper and 27,102 mt of contained cobalt. Around the same time this year we did a preliminary economic analysis of a multitude of processing options and concluded that a DMS processing plant was the best alternative. It is a proven model in the DRC and by reprocessing all the waste streams in a stage 2 project, Kalongwe’s lifespan will increase from eight to fourteen years.

What is your funding strategy going forward?

The implications of the new mining code have made us re-evaluate our funding strategy and the primary focus is now in-country funding and off-take finance. We are also pursuing 50% debt/equity EPC-style offers out of China, so there are a few alternative funding streams at the moment.

How do you believe Chinese appetite for cobalt will evolve?

Last year there was a slight overcorrection when everyone went crazy over cobalt. Some even began buying physical cobalt, but the Chinese are interested in cobalt hydroxide, which is what their refineries are set up for. While the amount of cobalt in batteries may reduce in the upcoming five to seven years, the demand for cobalt is forecast to increase threefold which will far exceed any potential substitutions.

How has the declaration of cobalt as a strategic metal in the DRC’s new mining code impacted your operations?

The promulgation of the mining code basically cut our share price in half – more so as a result of perception as much as anything.  But we try not to focus too much on this but keep moving forward in developing the project.

The DRC has notoriously poor infrastructure. How does Nzuri Copper cope with the situation?  

One of the big misconceptions about mining is that you can simply build your gold or cobalt plant and your project is set. Of our US$50+million CAPEX, the actual plant represented US$10 million, or 20% of total costs. Everything else surrounding the project – the camps, roads, infrastructure, access, towers, dams and owners costs – constitute the remaining 80%. Infrastructure is certainly a considerable expense when operating in this region.

Kalongwe Mining has an ongoing cooperation with the local community. What are some key projects included in the initiative?
We have designed a social program that promotes good relationships with the local community during exploration and sustainable development through the entire life of its project. It involves a series of projects such as the construction of a primary and secondary school as well as a medical clinic. We have recently compensated for crops and are providing fertilizers to the community as well as installed a 3G Telecom tower on our property with a 20+-km range. It is also our ambition to maximize use of regional labor. Currently during the initial fencing of the perimeter, 50+ locals from the nearby village have been employed and received training in high-quality fencing. Overall it is a very well-documented process involving government officials and local representatives. Ivanhoe set the standards in the region and although we are not quite on their level yet, we well and truly meet all the government requirements and have gone a few extra miles as well.

How is the new regulation concerning contract labor affect Nzuri Copper?

It looks quite prohibitive, but as our vision is to carry out the majority of the operations ourselves so it will not affect us significantly. That being said, we are a one-mine company and clearly we have to conform to the mining code. Things like fuel supply, catering and some forms of labor would be interesting for us to outsource in the future.

Do you have any final message to investors?

We are in the right metals and in the right spot in the world. Cobalt in the DRC sells itself and you cannot get the cobalt without the copper. I would say that you underestimate the value of cobalt at your peril, which is something the Chinese have clearly recognized.