"Deep South Resources is a copper exploration and development company ready to make discoveries in Zambia and to develop our exciting Haib copper project in Zambia."
Deep South had the Haib Copper License renewed in July. What does this milestone mean moving forward?
The Haib Copper License EPL 3140 has officially been renewed by the Ministry of Mines and Energy of Namibia on July 7, 2023, and is valid for a period of two years from the date it was renewed. Renewing the license means we will start employing people on site again. Having this project nearby and employing members of the local community means economic growth for the village. We plan to resume work shortly but first need to raise funds and also fix the gravel roads that have washed away since we left the site two years ago.
Can you speak to the geological and forward-looking advantages of the Haib project?
Haib is a large tonnage low-grade copper deposit with nearly 1 billion t of ore at 0.31% copper. When Deep South took over the project from Teck Resources in 2017, we had two major objectives. Firstly, we wanted to find a way to extract the metal at a low CAPEX and OPEX. With the deposit being low grade, it was important to find cost-efficient extraction technology that would also possibly allow us to increase the average grade of the project. We tested different technologies and the deposit showed to be amenable to bio heap leaching. With bio heap leaching, a strain of bacteria is entered into the process to accelerate the oxidation of sulfide. This allows for a CAPEX requirement of approximately five times lower and an OPEX requirement of approximately three times lower than with traditional methods. As the deposit is starting at the surface we have a low-strip ratio of 1.41:1, at a low CAPEX of US$340 million for an operation that has an after-tax NPV of US$957 million and an after-tax IRR of 29.7% at a copper price of US$ 3.00/lb, and an after-tax NPV of US$1.3 billion and an after-tax IRR of 42.1% at a copper price of US$3.50/lb.
We have started assaying for molybdenum with Teck Resources and have realized that molybdenum accounts for approximately 10% of the overall grade. This can increase the copper equivalent grade by at least 10%, and like copper, molybdenum is seen as a critical mineral.
What is Deep South’s exploration strategy for the three copper exploration licenses in Zambia?
Deep South’s key focus in Zambia has been on Luanshya West as the Chililabombwe and Mpongwe licenses were still very greenfield with no historic data. Luanshya West had 850 soil samples and a geophysical survey historically done, and based on that, we were already seeing the potential for anomalies. We have done an additional samples at Luanshya West, and are also awaiting assay results from Chililabombwe. Further work will be planned for Luanshya West to get started in October 2023.
At Luanshya West, Deep South has identified 10 copper anomalies and 13 cobalt anomalies with a peak value of 634 ppm for copper and 558 ppm for cobalt. The next step will be to do a geophysical survey with some infil sampling on some of the anomalies followed by a 3,000 m reverse circulation drilling program down to 150 m. The program is to prove the anomalies are really there or if it is just at surface. If we can prove that the anomalies deeper than surface showings, we are definitely on to something that could be pretty interesting.
Can you speak to the operating environment for juniors in Namibia and Zambia?
Namibia has always been one of the best countries in Africa for junior mining companies to do business. The country is welcoming to mining and the legal environment is well organized and the rule of law prevails. Zambia had some challenges between 2015 and 2020 with a president that was not extremely friendly towards the mining industry, but the current president is very business oriented and is bringing Zambia back on track.
Zambia has one of the most prospective copper belts in the world and there are currently six mines that are larger than our Haib project in Namibia. I believe Zambia will certainly play an important role in feeding the need of the growing copper market in the future, and although at a smaller scale, so will Namibia.