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Exciting listing on JSE’s AltX poised to give investors pure copper play

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Exciting listing on JSE’s AltX poised to give investors pure copper play

Big Tree Copper CEO Jan Nelson interviewed by Mining Weekly's Martin Creamer.

5th July 2022

By: Martin Creamer
Creamer Media Editor

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JOHANNESBURG (miningweekly.com) – The reverse listing of Big Tree Copper into SHiP Copper Company on the AltX of the Johannesburg Stock Exchange in October is expected to raise between R60-million and R250-million for the ramping up of combined production to 10 000 t/y of copper in the next three years.

SHiP, run by Shirley Hayes, is effectively taking over Big Tree Copper, run by Jan Nelson, resulting in SHiP continuing to operate and develop copper mines and Big Tree Copper continuing to recover copper from hard-rock copper dumps and produce copper plate, with all assets Northern Cape-based.

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Big Tree Copper has a 15- to 20-year life just on the material being processed at current production rates. In addition, it is looking at developing the Carolusberg tailings dam, which has got about 40 000 t of recoverable copper in it that was mined in the old days by Newmont.

“We want to build a company in the next three years to produce 10 000 t of copper per annum. That will see us having at least two operations that will be treating or producing copper from oxides and we want to have at least the Rietberg and the Jubilee openpit going so that we’ll be producing copper from those two mines as well. If we can achieve that, it will be a very good outcome for us, our shareholders and also for the communities in the area,” Nelson told Mining Weekly in a Zoom interview. (Also watch attached Creamer Media video.)

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Big Tree Cooper produces and exports one-meter by one-meter copper plate that is 6 cm thick. Each plate weighs about 38 kg per plate and contains 99.89% copper in an area where the copper is very pure.

“Shareholders will get exposure to a copper company with great growth,” said Nelson, whose company focuses on the restoration of the natural habitat in South Africa’s Northern Cape town of Nababeep, where twentieth-century copper mining negatively impacted an ecologically sensitive environment. 

Through the development of its own technology, the firm has commenced recycling previously dumped and mining waste to produce premium grade copper. This is done through a technologically advanced metallurgical process that delivers commercial viability while restoring the original landscape. 

Big Tree Copper is also philosophically bound to core principles of the United Nations Sustainable Development Goals and, after launching operations in November 2021, plans to engage with the community in revitalising aspects of the local socio-economic environment, decimated when mining operations ceased a decade ago, on a sustainable basis.

Mining Weekly put these questions to Nelson:

Big Tree Copper has been producing A-grade copper through a solvent extraction electrowinning (SX-EW) plant designed and built very innovatively by yourselves. What is your latest level of monthly production and is it meeting your targets?  

Nelson: Yes, it has. We’re currently building up from 30 t of copper production per month to about 90 t of copper production a month in the next two to three months. We're on line with our production targets, so we're quite happy with what we've achieved.

How much power do you consume and do you have any plans to self-generate your own clean power?

Certainly, with load-shedding Stage 6 that we've had, our plan is to look at that once we've listed in October to raise money for our own solar plant. We've currently got three diesel generators that are backup whenever we've got power outages and we’re now load-shedding 10 hours to 12 hours a day and that just isn't sustainable for a small business like ours, so I think we're going to have to go the route of raising money and building our own clean power plant for the future.

How green and clean do you intend being?

As green as we can. Wherever we think there's an opportunity to improve, or to make use of clean energy, I think we will. The company is founded on that fact that we clean old mine dumps and restore the old excavations with backfill that’s neutralised, and produce copper plates - that's part of our DNA and wherever we can, we will drive that.

How is your offtake agreement going with Noble Metals?

That’s in place and it’s running fine.

Is the business financially strong?

Yes, it is. Our costs are quite low because there's no mining involved, so we’re making a profit and in the same instance, we've been looking at optimising and growing the business.

How many people do you employ and how is the local community benefiting from your venture?

We've got about 160 people that currently work for us and as we scale up, that figure will probably rise to about 300 to 400 people over the next two years. There are about 5 000 to 6000 people that live in Nababeep. There's about a 90% unemployment rate, so we've made quite a big impact, although we're a small business, by giving these people jobs, and there's a lot of ancillary businesses that have developed as a result of our activity, so I think it's made a huge impact in an area where there hasn't been employment, or any prospect of economic development, so we're very proud of what we've done there.

How much valuable material is there in the area and do you foresee many other dump mining possibilities?

We've got about a 15- to 20-year life just on the material we’re processing at our current production rates. In addition, we're looking at the Carolusberg tailings dam, which has got about 40 000 t of recoverable copper in it that was mined in the old days by Newmont. That is an expansion area we're looking at - it will further increase the life. Then, we are looking to list in October where we are part of a reverse takeover by the SHiP Mining Company and SHiP will bring a lot of openpit material to our current oxide production as well.

Are your agricultural plans still in place?

Yes. We're looking at the water. We've done all the studies. There’s about half a gram of copper per litre of water and we're looking to extract that as well and then we'll have a lot of clean water available every month and that we're looking to apply to agricultural projects in the area, which will create further employment.

And now for the big issue, your listing. Where and why are you listing and will you be raising capital in listing?

We're quite excited about that. That’s part of the reverse takeover with SHiP Mining, which will make us a company that will, in the next three years, ramp up production from the current 1 500 t of copper to 10 000 t of copper per annum, so we're looking to list on the AltX of the Johannesburg Stock Exchange and we will be raising anywhere between R60-million and R250-million to develop some of the mining projects in SHiP when we move forward, so very excited about that.

Give me more about SHiP and more background into this whole wonderful enterprise, where you didn't actually need a mining licence but could go ahead with other ways of getting permission to mine?

That's correct. Current operations don't fall under the Mineral and Petroleum Resources Development Act (MPRDA) because we're dealing with movable rock. But in terms of the reverse takeover, SHiP has got ten mines that it can develop in about 60 prospects. SHiP is run by Shirley Hayes and SHiP is effectively taking us over. They bring a lot of production and in terms of developing those mines, we will fall under the MPRDA. Big Tree Copper, which will change its name to Copper 360, will be two businesses. One business that will do copper mining and the other business that will do the rock moving and retreatment as we're doing now, but it'll make us probably one of South Africa's biggest midtier copper producers, if not the only one, so I think that bodes very well for the area and for us.

Why is copper such a good metal to be in?

There’s a big drive around electric vehicle (EV) development but even excluding EVs, just in terms of all the infrastructure upgrades that are taking place in America, in Europe, you need copper for all of that infrastructure development, and there just isn't enough copper being produced in the world, so that is good for companies like ourselves which are producing copper. If you then, on top of that, add the EVs, it really is a good space to be in. Copper has been under a bit of pressure, but that’s mainly been as a result of the lockdown in China. But we're expecting the prices to go back to the $10 000/t to $12 000/t level.

What has happened to the Canadian link that you had?

TSX Venture Exchange-listed Handa Mining Corporation was one of the initial founders of Big Tree Copper, and they are still a 10% to 12% shareholder in Big Tree Copper, but they will just remain a passive shareholder. They’re not actively involved in the growth of the business.

When you list on the AltX of the JSE, under what name will you be listed?

We’re planning to list by the beginning of October, obviously subject to the process we have to go through at the Johannesburg Stock Exchange, because we have to submit all our documents and that can take a little bit longer, but we comfortably expect to list by the beginning of October. We did look at the Cape Town Stock Exchange, but at the moment it’s just – and I think it'll change –  that the JSE provides a much easier tradable platform in terms of the investors that invest in ourselves, and therefore we've chosen to go that route, because liquidity will be important for the company. The reason we've also chosen to list is that Coronation is a shareholder and one of the conditions of their investment in us was that we would list but we would also like the listing because it gives us an additional platform to raise capital to develop our mining operations with the reverse takeover that SHiP’s doing, and the institutions do want you to be listed.

Have you sorted out in advance who's going to take shares or will there be a retail element that will develop to get shares in your business?

We've done quite a bit of work on that and we've got some plans ready to build up a retail base as well. What we've realised is there’s a lot of people who want to invest in copper, but there’s no copper company that they can invest in, so we think we’ll garner quite a strong retail base as well.

What is your vision?

We want to build a company in the next three years to produce 10 000 t of copper per annum. That will see us having at least two operations that will be treating or producing copper from oxides and we want to have at least the Rietberg and the Jubilee openpit going so that we’ll be producing copper from those two mines as well. If we can achieve that, that will be a very good outcome for us, our shareholders and also for the communities in the area.

But there's also that ‘b’ word, beneficiation. I mean you came in with this innovative way of processing the copper. How successful has that been and is it different to what we know from SX-EW?

It’s not that different from how other major producers do it but we've had a few tweaks. We, for example, I think are the only operation in the world that runs a filter press in addition to our solvent extraction. We've just with BASF implemented the testing of a new programme on the solvent extraction, which is a world first. It’s a programme that will help predict how your SX behaves and how you can optimise it, and if that's successful, that will be rolled out across the world.

What will that do to the copper plate that you produce for export?

We produce one-meter by one-meter copper plate that's approximately 6 cm thick. They weigh about 38 kg per plate, and it's A-grade copper, so it’s 99.89% pure copper. The copper in that area is very pure. There are no additional metals in the copper. BASF is developing this special programme on our plant. They’ve asked to test this programme on our plant, which is quite great for us, and if that works, and it looks like it will, then that will be rolled out to any other businesses that require this plant from BASF. We’re fortunate in that they’re developing it on our site, and we then gain the advantages of technology that’s a world first.

Are your copper plates collected from your mine gate and then exported?

At this stage, that’s what will happen. We’re exporting, so there's no plan at this stage for us to do anything else on the beneficiation side, but it's certainly something I think we will look at as we move forward. Other companies have said that they will look at further beneficiation steps and I think as we grow – we’re just a bit small at this stage – we’ll certainly look at that because there are some great opportunities there.

What in your view should be the biggest takeaway from the fact that you guys are going to list in October?

We will give investors the only pure copper play in South Africa. Through Coronation, we are required to pay 30% of our pre-tax profits as a dividend, so shareholders will get exposure to a copper company with great growth that's coming. I think great share price appreciation, and a dividend that will be declared every year, so I think that's what shareholders can look forward to.

Besides Coronation, are there any other fairly sizable shareholders involved?

Not at the moment. It's basically management and the current board that's putting most of the capital. Coronation is the only big institutional shareholder at this stage, but certainly, with the listing, we’re looking at getting more institutional interest in the company.

Big Tree Copper is rehabilitating old mine dumps in the copper mining area founded in 1860 by the Okiep Copper Company.

The rock dumps were considered waste but on a closer inspection revealed the presence of considerable oxide-bearing copper that needed an SX-EW plant to extract.

SHiP founder Hayes, who was born in Springbok in the Northern Cape, once described the MPRDA as her biggest ever opportunity in that from 2004, the legislation gave small miners opportunities they never had before.

Nelson, 52, who has been around the mining block, is a former CEO of the London- and Johannesburg-listed Pan African Resources. A BSc (Hons) Geology graduate from the University of Johannesburg, Nelson matriculated from Helpmekaar Boys High School in Johannesburg and did postgraduate geology at gold-mining company Gold Fields.

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