LAST year as Copper 360’s CEO, Jan Nelson, celebrated the listing of the copper mining company on the Alternative Exchange (AltX Board) of the JSE little could he have predicted the beating the company’s share price would take on Friday as it plunged 22.29% to close at R2.65.
During the day the share hit a low of R2.30, plummeting as much as 33%. The firm's market cap is valued at R1.8 billion.
Copper 360, when it debuted on the JSE last April, closed the first day of trading at R5, a 5.2% percent gain on its opening price of R4.75 per share. That means its share price has haemorrhaged 54% since listing, meaning that it has lost half of its value.
An attempt at the weekend to contact Copper 360 for comment was unsuccessful.
Independent analyst Anthony Clark, the founder of Smalltalkdaily Research (@smalltalkdaily), posted on X on Friday: “Has $JSECPR Copper 360 turned green? #CPR hits a new 52-week low as the stock dives -15.84% to 287 cents in hefty daily traded volumes of 477,459, nearly double normal.
“Stock had a WILD rise since listing from an intra-day (crazy) high of 2000 cents to today's low of 287 cents all in one year.
“Maybe the founders should have sold the business pre-listing, when there was interest from a highly established miner of consequence.”
Clark, when approached for comment on the share movement, said: “I am also perplexed. Internationally there is very strong demand for copper because of the transition to the new energy revolution, not just renewable energy for normal consumption, but the use of copper in EVs (electric vehicles).
“There is potentially a global shortage ahead and an inability of the market to meet expected demand over the next 10 to 20 years.
“So I am perplexed that Copper 360 plunged today in above-average volume. It is perplexing given the underlying strong fundamentals of copper,” he added.
Meanwhile, Simply Wall Street, which conducts in-depth and unbiased fundamental analysis on thousands of listed companies, released a note on February 14 which said, “Insiders Sold Copper 360 Prematurely At R3.96 With Stock Trading Higher”.
Last week it noted that Copper 360’s stock price had dropped 11% in the previous week, but insiders who sold R2.7 million in stock over the past year “have had less luck”.
Insiders might have been better off holding onto their shares, given that the average selling price of R3.96 is still below the current share price, it said.
It said while insider transactions were not the most important thing when it came to long-term investing, logic dictated “you should pay some attention to whether insiders are buying or selling shares”.
It added: “Copper 360 insiders own 67% of the company, currently worth about R1.4 billion based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
“An insider sold Copper 360 shares recently, but they didn't buy any. And our longer-term analysis of insider transactions didn’t bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious.”
Business Report notes that a core team member of Copper 360, Jana van Wyk, the general manager of the firm’s operations, has moved to another company.
On Friday, Marula Mining announced the appointment of Van Wyk as general manager for Southern Africa.
Business Report aims to follow up with Copper 360 on Van Wyk’s replacement.
Background
Copper 360 was formed in November 2022, after a reverse take-over of copper producer Big Tree Copper, and copper mining company SHiP Copper. The company has a focus on producing premium copper that will yield a high cash margin.
Copper 360 operations are based in the Northern Cape and its mining rights cover 19 000 hectares to the north of the town of Springbok and hold 12 copper mines, some with developed infrastructure, and 60 copper prospects with advanced geological datasets.
Strategically sound
Copper 360 has been on a good footing operations-wise.
In November, Copper 360 announced the game-changing acquisition of Nama Copper, a copper processing plant, in a R200m deal, allowing it to more than double copper concentrate production.
Copper 360 and Mazule Resources, the shareholder of Nama Copper, had entered into an agreement to acquire all the shares and claims in Nama Copper for R200m.
Nama Copper consists of a processing plant – which Copper 360 will use to treat more ore from its Rietberg resource – as well as a large copper tailings resource.
At the time Nelson commented: “Our ability to raise additional capital in very difficult financial markets whilst several major producers are retrenching people and cutting growth is a testament not only to the value investors see in the copper price but also the value Copper 360 offers all stakeholders.
“Our acquisition of Nama Copper is now fully funded, and this ensures that we will double our production in the 2025 FY.
“We will have three new copper processing plants in production by February 2025 and our new Rieberg Copper Mine comes online early in 2025.
“The bottom line is we forecast to deliver R1bn more in copper sales than originally planned at listing which more than easily justified the slight dilution to shareholders as 70% of new capital is financed through debt,” Nelson said.
On October 9, 2023, Copper 360 posted on its website, “PwC lists copper at the top of its big six critical metals in its Mine 2023 Report. Copper 360 noted as key role-player.”
In September it announced a “significant” mineral resource upgrade at Rietberg mine, north of Springbok.
The total resource of contained copper increased by 220% from 25 275 tons in 2022 to 81 200 tons with the maiden and indicated resource of 60 800 tons of copper declared.
BUSINESS REPORT