The thinking among the world’s major mining companies is that the opportunities presented by emerging new technologies are best capitalised on by focusing on copper. The lithium market is too unpredictable, the cobalt market is too small, and other speciality metals are as yet unproven. But copper is a tried and tested metal that will be greatly required in technology - old and new.
According to an estimate used by BHP Billiton’s head of American operations Danny Malchuk, 105 kilogrammes of copper could be required in the manufacture of every electric car.
He puts the future copper demand for use in electric vehicles at something like 12mln tonnes per year, or more than half of the current global market for refined copper.
The major companies are cranking up their exploration efforts in the hunt for the next big new discovery, a dynamic that’s not been seen for at least a decade.
At 1.1mln tonnes of contained copper and 3.7mln ounces of contained gold, Mankayan is big. As such, it was once under option to major South African company Gold Fields Limited (JSE:GFI, NYSE:GFI). And before it repositioned its efforts outside of the Philippines, Gold Fields had already stumped up significant portions of cash to secure the position at Mankayan, money that eventually made its way back to Bezant shareholders.
For a while, after Gold Fields had backed away, Bezant pursued other opportunities in South America and elsewhere. It was the aftermath of the global financial crisis, and the mining sector was in the doldrums. Majors were repairing their balance sheets, and although Mankayan is big, it’s also deep. The appetite was simply not there.
Focus shifts to Mankayan
Now though, the dynamic is different. And with a refresh of its management team and new money injected, Bezant’s focus has once again shifted to Mankayan.
The prime movers in initiating this change have been new board members Laurence Read and Colin Bird. Bird has had major success in the copper space before, with the US$260mln sale of Kiwara to First Quantum back in 2009. He’s hoping to repeat the trick with Mankayan, and is willing to set almost as punchy a valuation on it too.
Read is an experienced resources company director, who also sits on the board of Ferrum Crescent and is involved in several unlisted projects too.
Together, Bird and Read have clearly marked out the future of Bezant as being in copper. One South American asset has now been sold. The second, Eureka, remains on the books, and it will be no surprise for investors to learn the reason. It already has a non-compliant copper resource, and looks prospective to yield more.
With the recent injection of US$500,000 from the Colombian asset sale, alongside £600,000 raised at the time Bird joined the team in February and a subsequent £800,000 raise undertaken in May, there’s now money in the bank to get down to some serious work evaluating the potential of these assets.
First, says Read, there’ll be a series of reviews of all paperwork and data. The market has already had one update on that, with the publication of a block model for Mankayan and the opening of a data room.
Next, it will be time to get out onto the ground.
“We think there’s a lot of exploration potential at Mankayan,” continues Read. “And it’s definitely worth looking at exploration at Eureka too, and seeing what’s beneath the surface.”
“There aren’t many projects around like Mankayan,” he says.
Certainly, there aren’t many companies around like Bezant that hold assets like Mankayan.
Its market capitalisation is a relatively modest £3.75mln. For a company that has copper in the ground worth over US$6.5bn, not to mention the gold, that’s quite a value gap. To be sure, it’s deep and the mining costs will be considerable.
But Bird sees significant value here, and he has delivered before.
Watch this space.