The company said they had clearly demonstrated that it had met all the criteria to justify a renewal and the application, which also targets the Mining Commissioner and Orange River Exploration and Mining, seeks an urgent interdict to prevent the government from granting exploration or mining rights over the same licence area to another company.
Orange River is named in the suit as a possible interested party in the matter as it applied for an exclusive prospecting licence extending over the Haib copper deposit on November 12 last year. From April 2017 to April 2021, Deep-South invested more than C$2 million ($1.6m) on the project, including an updated preliminary economic assessment. The miner has also proposed a C$7.1 million feasibility study and C$25.5 million pilot plant.
International legal options
Since receiving news of the licence refusal, Deep-South has halted all work on the project and laid off its employees on site. The company had acquired the remainder of the project in 2017 from Teck Resources, which is one of its major shareholders.
The updated PEA in December had put Haib’s after-tax NPV7.5 at $957 million and IRR at 29.7% using a $3/lb copper price, envisaging a 24-year mine producing 35,332 tonnes per annum copper cathodes and 51,080tpa copper sulphate.
Deep-South said it was also investigating its international legal options and will disclose its strategy in due course. The company’s shares have fallen almost 63% in the last month and were trading last at 4.5c, valuing it at C$6.6 million ($5.4m).