Copper Bay is seeking to IPO on AIM to raise £10 million to fund a bankable feasibility study on its Chañaral Bay copper tailings project in Chile.
Copper Bay’s IPO introduces a unique project - Ocean Equities
Copper Bay’s pending IPO introduces investors to a unique copper project, according to broker Ocean Equities.
The London based broker helped the company raise £410,000 in pre-IPO funding in October. And analyst Chris Welch has highlighted its potential in a note to clients ahead of a £10 million IPO onto the AIM market.
“Copper Bay’s unique asset presents the company with an opportunity to start copper production in early 2015 at a low capital expenditure and with low operating costs,” he said.
The project itself is an unconventional tailings project on the Chilean coast. It is a tailings beach that was created by the transportation of waste materials from historic mines in the Chañaral area.
The Chañaral bay is estimated to contain 116 million tonnes of material with an average grade of 0.25 per cent copper, and it is also believed to contain significant amounts of gold and molybdenum, Welch said.
The firm is chaired by Harry Dobson, who heads a number of junior mining firms such as Rambler Metals and Mining (LON:RMM, CVE:RAB) and Kirkland Lake Gold (LON:KGI). While chief executive Colin Hunter is a metallurgy expert with previous roles at Vital Metals Ltd, Impala Platinum and Ashanti Goldfields.
“Management’s extensive experience in mining and metallurgy, combined with its tacit local operating knowledge will enable Copper Bay to exploit Chañaral Bay’s near term production potential,” Welch said.
He added: “In essence, Chañaral Bay is a remediation project that will also have a distinctly positive socio-environmental impact, making it a unique copper asset in our view.”
According to Welch, Chañaral Bay, based on initial indications, will be able to support production of 27,000 tonnes a year for around 9 years. He says the project would have operating costs of about $1.44 per pound of copper and an initial capital expenditure of $236.5 million.
A scoping study has indicated that the project could be worth US$242 million (post-tax net present value) based on a conservative mine life copper price of $6,612 per tonne.
Welch also points out that the study outlines many opportunities to reduce both opex and capex.
The proposed IPO is currently being finalised by the broker and it is expected to close during the first quarter of 2012.
