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MIDNIG MIN
Bringing Rio Tinto into the discovery story at
MINING | MIDNIGHT SUN MINING
HT SUN ING
t the Solwezi licences in Zambia’s Copperbelt
Mid-stage copper and cobalt explorer Midnight Sun Mining has been working diligently on the Solwezi licences in the Zambian Copperbelt for the past eight years. Solwezi consists of two contiguous exploration licences covering over 506 km2 adjacent to the largest copper mining complex in Africa - First Quantum Minerals’ Kansanshi Mine. During this time, the TSXVlisted outfit has conducted geochemical and geophysical surveys along with air core (AC), reverse circulation (RC) and diamond drilling across the property, but the results from these campaigns have been inconclusive with regards to establishing a continuous mineralised system, due to the geological structures being largely undercover and thus, difficult to detect. “We would get hit after hit and thought we had the structures figured out, then we’d get misses where we thought we’d get hits and vice versa,” says Midnight Sun’s president, CEO and lead director Al Fabbro. “A lot of the structural geology wasn’t evident to us, so we decided to fly a VTEM survey to try and see what was going on. It explained a lot of the reasons why we were getting misses and hits, but by the time we did that we were out of money and the stock was under 10 cents. We then had to make a decision whether to dilute the project or dilute the shareholdings.”
By this point, Midnight Sun
offers after knocking back
had already received sustained several deals tabled by the interest from a larger player
world’s second largest miner in
that had staked ground
years gone by.
around the Solwezi licences and was keen to unearth the
A deal that Fabbro believed
next Kansanshi, Lumwana or
would be acceptable to
Sentinel-sized deposit to come Midnight Sun’s shareholders out of the Zambian Copperbelt. was hammered out at a final
Enter Rio Tinto
meeting in London in May of that year, after the mining
So, when Fabbro and his
giant revealed its belief that
executive team sat down with
Midnight Sun had ‘three shots
Rio Tinto at the 2019 PDAC
to host a Rio-sized deposit’
event in Toronto, they were
within the Solwezi licences.
ready to listen to substantial
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The earn-in and joint venture
with the agreement. The
By that time, we’ll know if
deal was announced in April
next three stages of the
we have a Rio-sized deposit
2020, contingent upon Rio
arrangement would see Rio
or not, feasibility work
making sufficient expenditures
committing $16 million, $14
notwithstanding. The early
before earning any interest in
million and $15 million in
money tells you if you’ve got
the project, with a US$700,000
work expenditures, plus cash
something to chase,” Fabbro
upfront fee to be paid to
payments along the way;
reckons.
Midnight Sun upon removal of
bringing the total investment
conditions.
to $51 million, which would
“But so far, we’re really happy
earn the miner 75% of the
with the relationship and think
project.
that they’ve done enough
Rio would then spend $3 million on an initial work
structural geology to figure out
programme and make a
“They have to spend $21
what’s going on underneath
further $300,000 payment
million before earning any
this cover. We are hopeful
before being able to continue
interest at all in the property.
that this programme will bear fruit.”
Kickstarting the campaign In the 12 months since striking the deal, the COVID-19 pandemic has continued to rage on across the globe, impacting macro-fiscal and political policies in economies from Canada to Zambia. The health crisis also disrupted supply chains across Africa for a while, causing frustration amongst exploration and mining companies on the continent.
MID N I G H T SUN MINING AT A G L A N C E
STOCK TICKER: TSXV:MMA MARKET CAPITALISATION: US$25.5 million (as of May 06, 2021) aj
AL FABBRO, MIDNIGHT SUN MINING PRESIDENT, CEO AND LEAD DIRECTOR
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Midnight Sun and Rio’s Stage 1 exploration programme was further delayed by an extralong rainy season in Zambia, but the $3.2 million campaign finally commenced in April 2021 – exactly one year after the deal was announced. This initial work programme will run to late June with three rigs turning – one RC, one diamond and one AC – at three different prospects across the Solwezi licences. “The results of that work will dictate what transpires for the rest of the year. “First and foremost, we want to see a major-sized copper deposit which would be in excess of 10 billion contained pounds of copper,” Fabbro proclaims. “That would be something that Rio could build as a standalone.” He describes three different styles of mineralisation across the Solwezi concessions. To the North, there was an initial understanding of a Kansanshi-
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like deposit at the 22 Zone.
million pounds per annum
so they’re going to try that and
In spite of some significant
Lumwana mine 60 km away.
we’ll wait and see.”
geology has proven to be even
“We’re going to commit
Then there is the Mitu target,
more complex than originally
2,000 metres of RC drilling
a 17 km trend on the Western
believed, and will require
at Dumbwa this campaign to
side of the Solwezi dome,
further modelling work before
try and explain that anomaly,
which is where Midnight Sun
more drilling can be done.
because we’re getting over
has had its best success in
0.7% copper in soils along a
terms of drill hits, notably an
The second style of
14km strike, but our best drill
11.6 metres hole grading 4.23%
mineralisation Fabbro refers
holes are getting 0.5-0.6%.
copper equivalent (Cu eq).
to – at the Dumbwa target to
It [the strong soil anomaly]
the Southeast - has also been
has baffled lots of companies
The drilling and other work
difficult to explain, with some
before us and it’s baffled us.
to date at Mitu has focused on
analogies to Barrick Gold’s 276
Rio think they’ve got an idea
the initial M1 discovery area,
high-grade drill results, that
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which is showing potential for a near surface copper-cobalt deposit somewhere in the region of 15-20 million tonnes at 1-1.5% Cu eq. To put that in perspective, at current metals prices that would be roughly equivalent to a 750,000 ounces to 1.5 million ounces gold deposit. “We could drill that off, but it’s not big enough for a Riosized target and we’re looking for something even more significant. But, Mitu offers five or six different target areas along that 17 km stretch, all of which could host deposits considerably larger than M1. In fact, that 4.23% hit falls outside of M1 and hasn’t been properly followed up. Rio’s got some ideas on a huge geophysical anomaly adjacent to it.”
Copper on a tear In the past 12 months, the copper price has more than doubled on the way to $10,000 per tonne as global economic activity ramps up
“The reason we’re chasing copper and big deposits is because, historically speaking, you’re going to get three or four price cycles with a big copper mine, whereas in a gold mine you’d be fortunate to get one good cycle” Al Fabbro, Midnight Sun Mining president, CEO and lead director
again following the COVID-19
commodity price with a brand-
crisis, and as supply/demand
new discovery,” Fabbro says.
fundamentals strengthen,
“If we’re fortunate to make a
based on copper’s prominence
discovery, you get a perfect
in the green economy of the
storm which is when take
future.
outs happen, and that’s why it would be significant to us.
These fundamentals are only serving to sweeten the
“The reason we’re chasing
position of a company like
copper and big deposits is
Midnight Sun, on the cusp
because, historically speaking,
of a meaningful discovery of
you’re going to get three or
copper and also cobalt; metals
four price cycles with a big
which will play a vital role in
copper mine, whereas in a
the transition towards a low carbon global economy.
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gold mine you’d be fortunate to get one good cycle.” On the flip side, many observers in the African mining sector are wary of a high commodity price environment due to the temptation amongst governments to take a larger slice of the pie, in terms of royalties and extra taxes on mineral producers.
RGN editor Jacob Ambrose Willson interviews Midnight Sun Mining president and CEO Al Fabbro, April 20, 2021 Zambia is a prime example
attractive mining jurisdictions,
make it work, but it’s a big
of this opportunistic form of
according to Fabbro.
political football.”
government hit the headlines
“I’d like to see them structure
In a country where the mining
in 2019 with a policy that
[any royalty/tax changes] so
sector may contribute as
would raise its sliding scale
it’s not just a percentage of
much as half of total GDP and
for royalties from 4% to 6%,
the price but a percentage of
directly employ over 73,000
while introducing a new 10%
the increase of the price, so
people (according to a 2019
tax when the price of copper
it can be a win-win royalty
EITI report), government
exceeds $7,500 per tonne.
as opposed to just a punitive
policies on copper - Zambia’s
measure to the producers. I
leading mineral export – are
However, the possibility of
think for the most part, the
never too far from the top of
further fiscal alterations might
Zambian government wants
the national agenda.
simply be a small downside
copper to work for everyone
that comes with operating
and are doing their best to
resource nationalism, after the
in one of Africa’s most
Having said that, the development over several
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decades of a sophisticated
A Zambian team
Stay close to Midnight Sun
mining sector in Zambia
“Our technical people are
for updates in the second
has provided a wealth of
highly educated, motivated
half of what could prove to
in-country expertise that
and feel very strongly that
be a transformative year for
Midnight Sun has tapped into
we’re sitting on a very large
the mid-stage copper-cobalt
while building its team on the
discovery. It’s also significant
explorer in Zambia.
ground.
that a big company like Rio has committed large amounts of money to make that discovery before earning any interest.”
Published by Anderson Murray Media Ltd
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