Midas Minerals will acquire a high-grade Otavi Copper Project from Nexa Resources for a combined N$126.4 million (US$7 million).
The Otavi Project includes two notable deposits awaiting resource definition (T13 and Deblin) and numerous underexplored targets.
It spans approximately 1,776km² of private cattle and game farms, many of which have established access agreements, ensuring seamless pathways for Midas Minerals to conduct exploration and development. Farm owners are experienced in mining activities and support exploration and development efforts.
Nexa actively grew the project from 2015 to 2022, achieving early success with the discovery of the T13 Deposit in 2016 and significant mineralisation at Deblin in 2020.
Midas Minerals will benefit from Nexa’s high-quality dataset, comprising ~56,000m of diamond drilling, 17,087 soil samples, and geophysical data including extensive ground magnetics, surface electromagnetics, induced polarisation, and audio-frequency magnetotellurics (AMT), which the company’s geophysical consultant is currently reviewing.
Nexa will receive US$3 million on transfer of the licences, data and core comprising the Otavi Project at completion of the acquisition.
Another US$2 million will be paid on completion of a pre-feasibility study, followed by US$2 million upon Midas’ decision to develop a mine and a further US$2 million within 12 months of the commencement of commercial production.
In addition, Nexa will be granted a net smelter return royalty of 1%, of which Midas may acquire half for US$2 million in cash.
Midas Minerals managing director Mark Calderwood says exploration over the past decade at the Otavi Project has identified multiple high-grade copper deposits, with accompanying silver and gold.
Calderwood also said acquiring this project provides Midas Minerals with a highly prospective and advanced project that we can rapidly explore and grow a resource base to deliver value to shareholders.
“The Otavi Project provides an excellent opportunity for Midas to delineate significant high-grade copper and precious metal deposits starting at or near the surface with favourable metallurgy,” Calderwood said.
He added that the project area lacks prior mining despite multiple high-grade drill intercepts and untested targets. “The acquisition is structured so that Midas Minerals only pays minimal upfront cash consideration, equivalent to a fraction of previous project expenditure, with further deferred cash consideration contingent on understanding the potential economics of the project, moving to development and after reaching commercial production.
“Our strategy is to use a two-pronged approach, using multiple drilling rigs to undertake value-added resource definition drilling on the known deposits, with additional drill rigs to test regional soil and geophysical anomalies and outcropping mineralisation,” Calderwood said.
He also said that while the licences are being transferred, the company is building a Namibian team and undertaking detailed preparations for drilling. “Importantly, Namibia is a well-known and standout mining jurisdiction that consistently supports the mining industry.
“The Otavi region has enviable infrastructure, including water, power, rail, a smelter and sealed roads. The area hosts several large and high-grade deposits including the famous Tsumeb mine which produced approximately 6Mt of copper, lead and zinc metal and 82Moz of silver at a combined recovered base metal grade of ~18% (Cu+Zn+Pb) and ~3 oz/t silver3 and the 3Moz Otjikoto gold mine which has produced 1.7Moz at low cost in the past 10 years and includes the recent Wolfshag discovery.“
*Rate US$=18.06
