Nzuri Copper jumps 20pc after strong results in the Congo
Right on cue Nzuri Copper yesterday released the robust feasibility study into its Kalongwe copper and cobalt project which Stockhead predicted late last week, with investors lifting the company’s share price by more than 20 per cent.
From last sales before a self-imposed trading suspension of 15c ahead of the feasibility release, Nzuri (ASX:NZC) reached a peak of 20.5c in early trade today, before slipping back to around 18c.
What interests investors in Nzuri and Kalongwe is the combination of metals including copper — which is enjoying a strong price revival this year — and cobalt — which is booming thanks to its use in batteries, and a looming supply shortage.
Strong financial credentials
The Nzuri feasibility study highlighted the strong financial credentials of the project with an internal rate of return of up to 71 per cent on a development with a modest estimated capital cost of $US53.1 million ($67 million).
Small when compared with other copper and cobalt mines, Kalongwe is a starter mine for Nzuri in the Katanga region of the Congo — a location known for very large developments which supply a large proportion of the world’s copper and most of its cobalt.
Ongoing exploration across Nzuri’s tenements is likely to add to the reserve estimate in the feasibility study of 7 million tonnes of ore assaying 3.03 per cent copper and 0.36 per cent cobalt for a contained 211,494 tonnes of copper and 25,128 tonnes of cobalt.
Nzuri’s chief executive, Mark Arnesen, said the feasibility study had shown Kalongwe to be an outstanding project, characterised by high copper and cobalt grades, low capital costs and strong financial return.
“The relative simplicity of the stage one project and anticipated 12-month timeline to production, once funding and board approvals are secured, make this a very attractive foundation project for Nzuri,” Mr Arnesen said.
Above: This Tim Treadgold Stockhead story predicted strong Nzuri results last week
“In addition, the feasibility study highlights the significant upside that can be unlocked through future project expansion, including the potential for leaching of cobalt ore and mineralised rejects.”
Nzuri is also exploring a number of options to increase the life of the project which is located close to the world-class Kakula project of Ivanhoe mines.
The key numbers in the Nzuri study include annual production of 19,360 tonnes of copper and 1507 tonnes of cobalt. Initial mine life is estimated to be seven years with the cash cost of combined copper and cobalt calculated at $US1.35 per pound of copper equivalent.
Funding options are being considered by Nzuri include a conventional debt and equity package as well as offtake agreements with strategic partners.
Arnesen said the immediate focus would be to close out one or more of the funding opportunities while working to unlock the huge upside on at Kalongwe and in the surrounding region.