"In due course, the 29Metals initial public offering (IPO) document should make for interesting reading re: Golden Grove and Capricorn copper metrics, in comparison with Havilah's Kalkaroo copper-gold project"
For those that are interested ....
29Metals listed on the ASX on Friday 2 July 2021.
By listing on the ASX, it gives Owen Hegarty the ability to use 29Metals' scrip in an acquisition of a company.
Remembering that Golden Grove was bought by EMR Capital during 2017 for cash of US$210 million from MMG Limited; and Capricorn Copper (formerly Mt Gordon and Gunpowder mines) was bought by EMR Capital during 2015 for cash of $55 million.
On top of that, EMR Capital said it has spent at least $400 million on CAPEX across these two assets (GG > $230 million; CC > $160 million).
CNBC video
If you have not already watched it, you may find this CNBC video (3.56 minutes) of interest. Owen Hegarty is very excited to be "long and strong, low-cost copper".
Ore Reserve copper equivalent ('CuEq') comparison Kalkaroo and 29Metals
29Metals' Prospectus stated 901,000 CuEq tonnes (as at 30 June 2020) includes both the Golden Grove and Capricorn Copper mine Ore Reserves.
In my opinion, this compares very favourably to the Kalkaroo copper-gold project Ore Reserves containing 890,890 CuEq tonnes (using the CuEq grade of 0.89% from the 2020 Annual Report), albeit different copper and gold prices used by 29Metals.
Ore Reserve copper tonnes comparison Kalkaroo and 29Metals
Based on my updated Australian Copper Deposits list (based only on copper Ore Reserves in Australia), Kalkaroo sits at #11 (474,000 tonnes of copper) with Golden Grove at #15 (241,000 tonnes of copper) and Capricorn Copper at #16 (240,000 tonnes of copper).
FYI: Oz Mineral's Prominent Hill comes in at #10 (480,000 tonnes of copper as at 30 June 2020); Sandfire's DeGrussa comes in at #20 (72,000 tonnes of copper as at 31 December 2020).
Kalkaroo's copper Ore Reserve compares very favourably to the 29Metals' copper Ore Reserves (Golden Grove as at 30 June 2020; Capricorn Copper as at 1 December 2020).
Column 1
Column 2
Column 3
1
Copper tonnes
Havilah
29Metals
2
Kalkaroo
474,000
3
Golden Grove
241,000
4
Capricorn Copper
240,000
5
Total
474,000
481,000
Golden Grove and Capricorn copper ore reserves combined total 18% in the 'proved' ore category. Whereas Kalkaroo has 90% in the 'proved' category.
In my opinion, Havilah still has more upside. With sufficient infill drilling of the deeper copper sulphide JORC Inferred Mineral Resource component (of 110 million tonnes) at Kalkaroo, and subject to available funds and drilling rigs, Havilah could convert the 110 million tonnes into Measured or Indicated Mineral Resources to be incorporated into the mining model as additional JORC Ore Reserves (of up to 474,300 tonnes of copper and 1.1. million ounces of gold). See post# 54070970
NPV for Capricorn Copper
Based on the following extract from page 660 of 29Metals' Prospectus, it would appear the vast majority of 29Metals' value is based on Golden Grove.
"For internal purposes, Capricorn uses a financial model based on a life of mine schedule that includes Inferred Resources. However, a separate version of the financial model was prepared for economic analysis of a mine schedule based only on the estimated Ore Reserves. Any Inferred dilution within the Ore Reserves had its grade derated by 50%. This model gives a positive PV8% of A$74.9 million for Cash Flow Available for Debt Service, demonstrating the economic viability of the Ore Reserves."
Sustainability
Unlike 29Metals 'legacy' copper mines that must retrofit their practices to make them cleaner and/or more efficient to get to a zero-carbon footprint, Kalkaroo has the chance to be 'green' by design, using environmentally friendly technologies and carbon-reducing practices, from day one as part of its development.
Cheers
These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.
(20min delay)