Copper360 has outlined plans to ramp up production and bring new projects online, after a challenging year for the company in which revenue fell short of expectations.
Acknowledging the tough financial year, Copper360 CEO Graham Briggs said the group saw strong long-term potential but that it must focus on growth and securing funding.
“The past financial year was a difficult one for the company as is evident from the financial results,” Briggs said on Tuesday.
“We need to invest capital to scale production and bring additional projects online.”
Within the next 6-12 months, the group hopes to reach an annual output rate of 5,000 tonnes of copper as it transitions from copper exploration to production.
The opportunities in copper are clear, with demand for the metal expected to surge more than 40% by 2040, driven by the growth of electric cars, solar panels and data centres.
A key step in Copper360’s growth strategy was the establishment of its concentrate business in March last year, which added R97.6m to revenue in the year to end-February. As a result, revenue from copper produced and sold was up 349% year on year at R143.7m.
However, a number of hiccups resulted in revenue being lower than expected. The group reported lower recoveries at its processing plant in Nababeep, while its Rietberg mine began mining operations later than planned after a delay in capitalisation for its fleet and infrastructure.
The group’s SX-EW plant was also put into care and maintenance, with cathode production being temporarily suspended in September after the plant recorded lower recoveries.
The company has set aside R256m in planned capital expenditure to complete the capitalisation at Rietberg for additional infrastructure and to complete its new processing plant at Nababeep. It reported a capital expenditure bill of R187.4m for the year to end-February.
The SX-EW plant also required more expansion capital to achieve sustained profitability, but this would only be incurred once the concentrate operations were operating at a sustainable level.
With the concentrate and mining units online, the group’s loss for the year widened by 244% to R223.1m, as operating costs rose by 177% to R399.4m.
“The directors have satisfied themselves that the group is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements,” said the company.
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