Midnight Sun Mining (TSXV: MMA) says the Zambian government admits making a mistake in June when it posted the rejection of an exploration licence renewal for the company’s main Solwezi copper project.
The application instead has been referred to a meeting of the government’s licensing committee, according to a company news release on Monday. Midnight Sun says it intends to submit a report to the government on recent exploration work at the site by a Sept. 26 deadline. It wasn’t immediately clear when the licensing committee intends to meet.
Midnight Sun’s stock price fell more than 10% to C$0.355 apiece on Aug. 29 when the company reported the licencing snafu. At that time, it appeared the government had refused the renewal and given the licence to another company. The shares fell C$0.02 on Tuesday morning to C$0.38 each, valuing the company at C$62.9 million.
“We are tremendously pleased that this licence issue was able to be rectified quickly and did not create significant disruption to the execution or timing of our plans,” CEO Al Fabbro said in the release. “I would also like to thank the Zambian Ministry of Mines and Minerals Development for their assistance in rectifying this matter so we can resume our exploration plans.”
The exploration licence renewal is for the Kazhiba target on Solwezi. It’s 10 km from Africa’s largest copper mining complex, the Kansanshi mine held by First Quantum Minerals (TSX: FM), which has an exploration agreement with Midnight Sun. It’s also near Barrick Gold’s (TSX: ABX; NYSE: GOLD) Lumwana copper mine. They’re all on the Zambian copper belt that stretches into the Democratic Republic of Congo.
Kazhiba is one of three licensed target areas on the company’s 506-sq.-km property. Midnight Sun is exploring Kazhiba this year to define its copper oxide resources, as well as potential feed sources for the Kansanshi mine with First Quantum.
The target’s 22 zone was discovered by follow-up shallow drilling in 2012 over a subtle copper anomaly with thick overburden, Midnight Sun said. One discovery hole intersected 11.3 metres of 5.71% copper near surface.
Midnight Sun filed the Kazhiba exploration licence renewal in December for the second of two possible three-year extensions. The government issued a four-year initial licence in 2017. Public notices in June and August this year incorrectly said the application had been rejected and that a new company, Keki Mining, had the exploration rights.
The mix-up appears to have started because Keki had owned land next to Kazhiba. Upon discovering the error in August, the company worked with the government to correct it and is now helping Zambia’s Geological Survey Department complete a site verification report required for licence approval.
Midnight Sun has said its other two licences are unaffected. One covers the Dumbwa target, which is under an earn-in agreement with KoBold Metals, the high-profile private startup that’s backed by billionaires Bill Gates and Jeff Bezos. The other is the Kansanshi-style Mitu target, part of the cooperative exploration plan with First Quantum.
Exploration is to move forward as planned at Mitu, which represents a bigger target than Kazhiba and also hosts near-surface oxide copper. Previously, drilling at Mitu returned 11.6 metres at 3.44% copper.
