Copper 360 Raises R274 Million With High West Capital Partners to Fund the Nama Copper Acquisition and Expanded Production

Press Releases
By High West Capital Partners
On December 21, 2023
In Press Releases
Tags: borrowing | Collateralized | copper | copper 360 | equity base | finance | financing | Funding | Lender | lenders | liquidity | loans | Money | south africa | ZAR

Copper 360 raises R274 million by way of Debt and Equity to fund the Nama Copper Acquisition and Expanded Production Growth plan for the Rietberg Mine.

 

Copper 360 Limited
(Formerly Big Tree Copper Limited)
(Incorporated in the Republic of South Africa)
Registration number 2021/609755/06
JSE Share Code: CPR ISIN: ZAE000318531
(“Copper 360” or “the Company”)

Highlights

  • Total capital of R274 million secured.
  • R189 million is raised by through debt.
  • R85 million is raised by the issue of new equity.
  • New equity represents less than 6% of total issued share capital but provides 6,253 tons of additional copper metal forecast for 2025 FY and 2026 FY representing additional forecast sales of R1 billion (at US$8,500/t copper and exchange rate of 19 ZAR to USD).
  • Capital raised will fund the acquisition of Nama Copper and additional capital expenditure for the new mine plan at Rietberg.
  • Mine that will target 85% more production than initially planned at listing as well as a Generator Power Plant.
  • Further equity and royalty commitments for a further R50 million is being negotiated that could see the total capital number increase to R324 million.

Jan Nelson, CEO of Copper 360, South Africa’s only listed copper producer, 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 ensure that we will double our production in the 2025 FY. We will have 3 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 R1 billion 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.”

“We have structured the capital raised through several financial instruments resulting in minimum dilution to shareholders and maximum flexibility to the company in terms of repayment term and ability and balance sheet stability and margin. Having the balance sheet fully funded with some additional cash ensures delivery risk is mitigated and unforeseen events funded. This comes at very minimal dilution to shareholders and positions the Company for significant growth and success.”

Any forward looking statements contained in this announcement have not been reviewed nor reported on by the Company’s external
auditors.

AGREEMENTS

The Company has secured total capital of R274 million (Two hundred and seventy-four million Rand) to fund (a) the acquisition of Nama
Copper (b) the increased capital required for the Rietberg Mine that has doubled in terms of projected copper output capacity. The
source of capital is as follows:

Funding type Amount (ZAR)
Debt 189 000 000
Equity 85 000 000
Total 274 000 000
The capital will have the following impact on the production forecast:

Copper metal tonnes per annum
FY 2025 FY 2026 Percentage change
Forecast at listing 5 099 6 363 25%
New forecast (application of capital) 9 789 14 778 51%

1. LOAN AGREEMENTS

The Company has entered into three loan agreements for a total consideration of R189 million (Hundred and eighty nine million Rand) which is summarised in the table below and more fully described in the sections that follow:

Entity Nationality Related party Loan Quantum (ZAR) Repayment
period (months)
Handa Mining Corporation Canada Yes 74 000 000 6
Diaruk (Pty) Ltd South Africa No 10 000 000 6
Darmane (Pty) Ltd South Africa Yes 30 000 000 6
High West Capital Partners Singapore No 75 000 000 60
Total 189 000 000

1.4 HIGH WEST CAPITAL PARTNERS LLC LOAN AGREEMENT

On 21 November 2023 the Company entered into a loan agreement with High West Capital Partners LLC (“High West”) a private
investment firm, whereby High West will lend the Company up to 50% of the current fair market value of 37?720 000 shares of the
Company (approximately R75 million (Seventy five million Rand)). The material terms of the agreement are as follows:

  • High West may in its sole discretion but in consultation with Copper 360 notify the Company of its intention to fund a particular tranche. This communication will be in writing. Such notification will include the principal amount of the tranche and the intended closing date of the tranche.
  • The advance of any additional tranche shall be conditional on there not existing any default event or uncured valuation event.
  • The loan to value ratio and the number of shares shall be mutually agreed on by the parties on each and every subsequent
    tranche.
  • All outstanding amounts of the loan under all tranches shall bear interest in an amount equal to 6.75% (six point seventy-five per
    cent) per annum payable in quarterly instalments.
  • The loan will be collateralised by the deposit into escrow of 37 720 000 Copper 360 shares by the founding shareholders (SA
    Hayes, R Smith, JP Nelson and LAS du Plessis) in terms of scrip lending agreements on normal arm’s length commercial terms
    with Copper 360. Should any of the collateralised shares be forfeited to High West, the Company will issue the same number of
    shares to the founding shareholders as the number of shares forfeited.

High West has issued a notice of intention to fund an initial tranche of approximately R58.9 million (fifty eight point nine million Rand), subject to the Condition Precedent below.

Condition Precedent

Before the loan is advanced to Copper 360 the Company must obtain the necessary approval and consent from the Financial SurveillancevDepartment of the South African Reserve Bank in respect of the loan including the repayment of the loan amount, together with the interest accrued thereon. Application has been made to First National Bank as Authorised Dealer in Foreign Currency in this regard.

21 December 2023
Stellenbosch

CONTACT: Micel Wilson (micel@copper360.co.za)

Designated Advisor: Bridge Capital Advisors Proprietary Limited

Date: 21-12-2023 11:15:00
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About High West Capital Partners
High West Capital Partners was founded in Hong Kong. The name High West or Sai Ko Shan is one of the mountain peaks on Hong Kong island which has views of central Hong Kong to the North, Western views of Victoria Harbour and the South China Sea. All integral trading points that have deep history in the success of Hong Kong as a financial global epicenter.

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