Canada’s move to protect mining sector shields takeover targets
Teck Resources spent much of last year fending off Glencore’s $23 billion takeover attempt before the Swiss company opted instead to just buy the company’s steelmaking coal business.
Canada’s Deep-South Resources (TSX-V: DSM) seems to have scored a win in its battle to renew the company’s prospecting licence for the Haib copper project in Namibia, after the country’s mining and energy ministry missed a deadline to file the permit’s refusal.
Minister Tom Alweendo declined to renew Deep-South’s licence in June last year, citing the Vancouver-based miner’s inability to advance to a prefeasibility stage and complete the proposed drilling program as planned.
Deep-South took the case to Namibia’s High Court, which ruled that no permits could be granted over the same area until further notice.
The court was scheduled to hold a hearing on Thursday in which the mining minister’s request for an extension would be considered. The company said its legal team was ready to request the judge a “just and speedy determination” of the case.
From April 2017 to April 2021, Deep-South invested more than C$2 million ($1.6m) on the project, including an updated preliminary economic assessment. The miner has also proposed a C$7.1 million feasibility study and C$25.5 million pilot plant.
Since receiving news of the licence refusal, Deep-South has halted all work on the project located in the extreme south of Namibia, close to the border with South Africa, and laid off its employees on site.
The company had acquired the remainder of the project in 2017 from Teck Resources, which is one of its major shareholders.
The updated PEA in December had put Haib’s after-tax NPV at $957 million and IRR at 29.7% using a $3 per pound copper price, envisaging a 24-year mine producing 35,332 tonnes per annum of copper cathodes and 51,080tpa copper sulphate.
Deep-South is also investigating its international legal options and said it will disclose its strategy in due course.
