Northern Cape mining company Copper 360 has concluded a new offtake agreement for copper from its newly acquired Nama Copper plant.
The miner announced in November that it was acquiring Nama Copper from Mazule Resources for R200m.
The deal, CEO Jan Nelson said at the time, would allow the company to more than double its production capacity and output from 3,899-tonnes to 7,975-tonnes per year by 2025.
Copper 360 said on Tuesday that it had reached a revised payment agreement with Mazule. Initially, the payment plan comprised a total cash payment of R150m, plus an additional R50m from Mazule as part of the offtake deal.
However, Mazule would no longer be serving as the offtake partner. Instead, the outstanding R50m owed to Mazule would now be paid in cash across three equal instalments dated March, April, and May 2024. These payments will be financed, among other things, by prepayments from a new offtake partner.
The new offtake agreement concluded with Fujax UK, an international commodity trading company, is for all concentrate produced by the Nama Copper Plant for 10 years.
“Fujax will make prepayments against future sales totalling $2.5m (about R47.3m) over March, April, and May 2024 which will assist with the production ramp-up of the plant,” Copper 360 said.
The prepayments will be subtracted from the amounts due by Fujax under the offtake agreement over five years, with interest on the remaining balance applied monthly at a rate that aligns with market conditions.
Copper 360 took over the plant on March 13. It expects to produce about 45 tonnes of copper during the initial three-week commissioning phase. Production will be ramped up to 230 tonnes within the two months thereafter.
“We have successfully concluded the due diligence process of Nama Copper ... which has not only met but exceeded our expectations in both in terms of its structural integrity and performance, ergo the acquisition will enhance Copper 360’s operational capabilities and position the company for further growth in production,” Nelson said.
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