Deep South Resources Inc is an exploration company, which has been advancing the Haib copper porphyry project in Namibia, one of the largest of its type in Africa, and which sits in a 37,000 hectare (ha) property.
It hosts an indicated resource of 3.1 billion pounds of copper and 2.2 billion pounds of inferred and there is potential to expand the size and grade of the deposit.
However in June this year, Deep South reported that the renewal of its exclusive prospecting licence (EPL) 3140 covering the Haib asset had been denied by Namibia's Ministry of Mines and Energy. The company is now contesting this decision.
The refusal cited Deep South's inability to advance the EPL to pre-feasibility and complete the proposed drilling program as planned but Deep South maintains that the Ministry was kept well apprised, with no objection on their part, of a proposed change from the Pre-Feasibility study to an upgraded Preliminary Economic Assessment (PEA) and commencement of a full feasibility study and the latter was already started at the time of the refusal. Also, the Ministry issued all permits required for the drilling program and is well aware that Deep-South has completed the drilling program, the company has said.
Proactive recently sat down with Deep South CEO Pierre Léveillé to get the latest on the situation and to see what else lies ahead for the junior explorer.
Proactive: Obviously, your Haib copper project is the subject of ongoing legal issues. What is the next step in proceedings and when is that expected to take place?
Pierre Léveillé: The court has recently ordered the Ministry of Mines to file the documents that have served as the basis to the Minister to take that decision to not renew the licence. They have to file it before the 10th of October 2021. We filed all our documentation on the third week of July, and within the procedure. They had to respond to that and file their documents at a certain period of time, which has not been done yet. So this coming week, on the 10th of October, no later than that, they should file their documentation. Then we have ten days to reply to that or add new documents, if needed.
Then on the 28th of October, there will be another hearing at the court. I'm not sure exactly what will be the object of that hearing but I think some dates for the final hearing will be discussed. And we also know that, like in many countries, the judge will see if there's a possibility to mediate the case. So that's the next step concerning the court case.
On our side, we have also done quite a lot of lobbying at the highest level possible. We recently met with the Chamber of Mines. We have talked with the Namibia Investment Promotion Board and I know that they have some interaction with the Minister of Mines. The Investment Board has been created by the President of the country. We recently met the CEO of this entity. It has been created to promote foreign investment in Namibia so she wants to see a situation like ours being resolved.
Proactive: Do you expect to win back this EPL and what would you do if it does come back to you?
We're fairly confident we can turn the situation around because we're fairly confident that the Minister has not been well informed and there was a lack of information - we're pretty convinced of that. The Minister recently said that he was open to receive some representation by the company. We have been asked to officially request a meeting with the Minister. If we have the opportunity to meet with the Minister, we will show him an updated presentation that covers a lot of information. Even if we have provided this information to the Ministry, we're not certain that it's reached the Minister's level.
If we get the project back, our main goal is to get back on track and to continue exactly where we stopped. So to continue to drill; advance the resource estimation, continue metallurgy tests. and so on, for the feasibility study to come. That's our main goal. But we don't know how it will end up. We cannot guarantee it but we're very confident we can turn the situation around.
Proactive: In July this year, you said you were currently evaluating copper and gold exploration projects that have big potential. Can you tell us more about that, what sort of projects are you looking at, and when something may be firmed up?
We're looking for a new project with copper as the main commodity. There could be gold, molybdenum and silver, but we prefer copper as the main commodity. We think copper has a bright future from now on. We're specialized in copper and we have a very good team of copper specialists with us. We have looked at several projects and there's a couple where we are more advanced in discussions at the moment. We're looking in Zambia and in Canada, in British Columbia.
We are looking at projects also in Ecuador, Chile and Peru. But I don't want to give more details for the moment, because we have a focus on two projects at the moment. If we can finalize a deal on them, we will be quite happy.
Do you have an aim of when that deal may be finalized?
Hopefully by mid-November.
As CEO of Deep South Resources what kind of skills do you bring to the table?
My background is not geology - it's not technical. My background is finance. I started my career as a stockbroker and an investment banker in Canada. Most of my mandates were to raise money for exploration programs in the north of Quebec and Ontario. I did that for several years - about nine years. And then I took on the management of an exploration company, in which, with my clients, we already had a pretty good share position. The goal was to develop projects in Africa, which I did for around 25 years. So the skills that I bring to the company are my capacity to raise funds on the right projects; my capacity to operate and manage projects in Africa and South America. I've been involved in Chile quite a lot at the end of the 1990s. My skills are financing and management of projects in foreign countries.
What can investors expect in terms of newsflow in the short to medium term from Deep South?
There will be continuous news about the hearing and the court proceeding in Namibia. I would say in general it's every two/ three weeks we have news on that. There could be some news about some lobbying we're doing. There could be some meetings at high level that could bring us to a resolution of the conflict. Obviously, there will be some news about a new project sooner than later. And when that starts we will have regular newsflow, because we will have to evaluate the project and to start some exploration programs. There will be quite a lot of news around that new project.
Is there anything else you would like to say to investors?
We know the situation has not been easy. We're not the only company living in a situation like this. We've seen in the past ten years many companies, from juniors, like us, to major companies, having these kinds of setbacks with governments - of course in Africa, but also in South America. We've also seen that in Asia and Eastern Europe. Most of the cases have been turned around and the companies have been able to benefit from a resolution of their conflicts. We're also pretty confident because we still have very huge support in Namibia. So we're very confident we can turn the situation around.
Contact the writer at giles@proactiveinvestors.com