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Deep-South Resources (TSXV: DSM) is one step away securing the long-awaited renewal for its copper prospecting licence in Namibia that was denied by the country’s mines and energy ministry two years ago.
On Monday, the company announced that the Haib copper licence has been reinstated by the ministry with the status “pending renewal” following the verdict by Namibia’s High Court ordering the ministry to re-open the renewal application procedure.
According to Deep-South, the application procedure is well advanced, and it expects a final decision to be delivered in the coming weeks. Shares of Deep-South Resources surged by 27.2% following the update, placing its market value at around C$10.9 million ($8.2m).
In 2004, Deep-South was granted the exclusive prospecting licence 3140 (EPL) over an area of 74,563 hectaries covering the Haib copper deposit and a very large surrounding area. This was subsequently renewed five more times.
However, in June 2021, the ministry declined to renew Deep-South’s licence for the Haib copper project, citing the company’s inability to advance to a prefeasibility stage and complete the proposed drilling program.
The Vancouver-based miner has since taken the matter to Namibia’s High Court, which reviewed and set aside the minister’s decision, citing that the facts presented by the company should not have been ignored in the evaluation process. As a result, the ministry was ordered to reopen the renewal application procedure of 2021.
As the licence has now been reinstated, pending renewal on the mining cadastre of the ministry, officials of the ministry have invited the company to resume exploration work at any time. However, management considers it is prudent to await the renewal decision before resuming work.
“We are confident that the licence will be renewed in a timely manner. We have visited the site last week in order to prepare resumption of exploration and to be ready to start the work quickly when the final decision will be rendered,” Deep-South CEO Pierre Leveille said in a news release.
According to an updated PEA, the Haib copper deposit has an after-tax net present value (at a 7.5% discount rate) of $957 million and internal rate of return of 29.7%, based on a copper price of $3.00/lb. With an estimated 24-year mine life, it could produce 35,332 tonnes of copper cathode and 51,080 tonnes of copper sulphate a year.
