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MINING | Midnight Sun Mining
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Staking a claim in Zambia’s copper-rich North-Western Province
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MINING | Midnight Sun Mining
Midnight Sun Mining is a postdiscovery stage copper-cobalt exploration company with a 60% interest in the Solwezi group of licences located in Zambia’s North-Western Province. The Solwezi licences consist of two individual exploration licences covering 506 km² immediately adjacent to First Quantum Minerals’ (FQM) Kansanshi Mine – the largest copper mining complex in Africa, with resources greater than one billion tonnes. “Our philosophy was twofold,” explains Midnight Sun’s lead director and acting CEO Al Fabbro. “First and foremost, we liked the jurisdiction of Zambia. Second, we liked the infrastructure already provided by FQM’s Kansanshi Mine. As a junior, it gave us optionality on the assumption that we made a discovery.”
A copper mining haven Zambia’s mining industry has been an investor-favourite in Southern Africa since the industry was first opened to private venture in the late 1990s. The twin pillars of peace and democracy have remained a near-constant since Zambia gained independence from Britain
Resource Global Network in 1964 and have been a key reason behind the country’s continued attractiveness as an investment destination, particularly in the mining sector. The mineral prize that lies at the heart of Zambia’s investment appeal is copper, which is mostly found in the Central African Copperbelt straddling the border between the Southern region of DRC and Northern Zambia, where there is even a province named after the prolific Copperbelt. Since the privatisation of the mining sector, Zambia’s copper production has skyrocketed from 300,000 metric tonnes per year to 800,000 at the end of 2017, making it Africa’s second largest copper producer behind only neighbouring DRC. In fact, copper has a huge impact on the fortunes of Zambia as a country and its people, according to Fabbro. “Copper is the dominant industry here and accounts for about 85% of the country’s exports and the majority of its revenues.” The robust Zambian copper industry has enticed a host of major mining companies to set up exploration projects in the Copperbelt, including the likes of Barrick Gold, Rio Tinto, Glencore, Ivanhoe Mines and FQM. Many of these have gone on to build large-scale copper production complexes across the region, however rumblings of discontent have begun to emanate from these international mining houses after the
MINING | Midnight Sun Mining
Zambian government recently moved to
mining industry. We are making investments
increase royalty taxes on the mining sector.
with horizons of sometimes 40 years or more, but governments tend to change the
At the start of 2019, the government raised
goal posts depending on which way the wind
its sliding scale for royalties from 4% to 6%
is blowing.
and introduced a new 10% tax when the price of copper exceeds US$7,500 per tonne.
“Having said that, I think the Zambian
Zambia also plans to replace value-added
government fully understands how important
tax with a sales tax by April to help reduce a
copper is and they are starting to realise
mounting public debt.
that if they encourage the development of new mines, they will generate much greater
Speaking on the subject of tax, Fabbro
tax revenues than by changing what’s been
explains that this type of action is common
successful in the past.”
in all jurisdictions not just Zambia: “I live in British Columbia, Canada and it feels like our
The Solwezi licences
government changes the goal posts for the
Midnight Sun remains unfazed by the recent
resource sector every week.
legislative changes in the Zambian mining sector, instead placing increased faith in the
“It’s one the greatest challenges facing the
Solwezi licences in North-Western Province,
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a region which has been christened the ‘new
staked around by MMG and Rio Tinto based
Copperbelt’ by many enthusiastic exploration
on our discovery, which shows there is a
companies.
keen interest from majors on the ground we are working on. We think the land we hold is
The Solwezi licences are located within 10 km
strategic and very prospective.”
of FQM’s Kansanshi Mining Complex, only 60 km from Barrick Gold’s Lumwana Mine
After carrying out geochemical and
and concentrator and a further 120 km from
geophysical surveys, along with air core, RC
another FQM asset - the Sentinel Mine.
and diamond drilling campaigns, Midnight Sun identified five targets across the Solwezi
This glut of high quality copper mines in the
licences: 22 Zone, Mitu, Dumbwa, Kifubwe
region not only offers a strong testament to
and Khaziba. In the last 12 months, the
the glittering potential of the Solwezi licences,
company has predominantly focused on 22
but also provides a strong infrastructure
Zone and Mitu.
network that Midnight Sun can leverage off, as previously alluded to by Fabbro.
At 22 Zone, Midnight Sun encountered multiple intercepts of high grade copper
“There are some really nice mines in the
oxide in drill holes and made a significant
immediate vicinity,” he says. “We’ve also been
drill discovery of 11.3 metres at a grade of
MINING | Midnight Sun Mining
“First and foremost, we liked the jurisdiction of Zambia. Second, we liked the infrastructure already provided by FQM’s Kansanshi Mine” Al Fabbro, acting CEO and lead director
5.71% copper. However, Fabbro admits that
“We would like to drill four 400 metre holes
to date this near surface mineralisation lacks
into the target to see what it looks and
continuity, which was also incidentally a
based on the results work from there. If it’s
feature of early exploration on the Kansanshi
another Kansanshi, it’s a company maker,” he
system.
exclaims.
“We’ve got some extremely high grade oxide
Meanwhile, the Mitu target has yielded a
holes at the surface, but the analogy is more
copper-cobalt discovery in ore shales to
like a buried Kansanshi. There seems to be a
the far North of the known Mitu trend.
geophysical target down at 250 metres that
Diamond drilling has encountered significant
looks very enticing and that’s likely going to
mineralisation including an 11.6 metres
be our next foray at 22 Zone.
interval assayed at 3.44% copper and 0.067%
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cobalt. The Mitu discovery was made after a
While the company had been focused on
very subtle soil anomaly was detected by a
the Northern part of Mitu, they have also
geochemical survey.
uncovered a number of larger geophysical anomalies that could result in a much bigger
“We got a couple of drill hits up there and
deposit. “The geophysics has really told
stayed focused on the area, tracking the
a compelling story. One of the priorities
mineralisation. We’ve got what looks like
of this year is to test targets identified by
several kilometres of strike, about 300 to 400
geophysical surveys conducted during 2018.”
metres of potential dip and widths look to be about 10 metres. Based on drilling done to date we are seeing roughly 1% copper equivalent.”
MINING | Midnight Sun Mining
A big year ahead Over the course of 2019, Midnight Sun will
“First and foremost, we need to understand
dive deeper into the geophysics at Mitu and
the structural controls of the mineralisation
select the three best drill targets in order to
at Mitu, and we don’t fully understand them
confirm the geophysics. If the geophysical
yet. We thought at first it was the ore shales
results can be confirmed, then it will modify
alone that controlled mineralisation, but
plans for progressing the target to suit the
recent results have shown there are other
requirements.
additional control factors.
Resource Global Network Midnight Sun has also identified a new potential zone located between Mitu and 22 Zone that looks very attractive, according to Fabbro. “We are going do some work there aimed at developing drill targets as a third priority behind Mitu and 22 Zone.” Casting his eyes towards the horizon, Fabbro maintains a flexible stance on the prospect of Midnight Sun ultimately developing a copper mine on the Solwezi licences. “If we do get to a production decision, we recognise we would have to bring in a whole set of people with different skillsets, which is definitely achievable. “However, our intention is to create an asset that a senior mining company would want to own. Ultimately our goal is to maximise the value to Midnight Sun and its shareholders, whatever form that takes.” Returning to the present, Midnight Sun’s acting CEO concludes by reasserting his confidence in Zambia’s new Copperbelt region. “With a bit of luck, we could be the story of the year for 2019.” If the deposits surrounding the Solwezi licences are anything “Once we learn and understand the structural
to go by, this could well be the case.
control, we will be more comfortable at Mitu and I think the geophysics will really help. One of the first steps in proving an ore body is understanding the structural controls,” Fabbro reasons.
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Published by Anderson Murray Media Ltd
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