The decision by the Minister of Mines and Energy not to extend Deep-South Resources’ license for the Haib copper project has been overturned by the High Court of Namibia.
Although the ministry missed a deadline to register the permit’s refusal, the Canadian miner won its struggle to extend the company’s prospecting license for the Haib project with the decision.
In June 2021, Deep-South’s license was not renewed by Minister Tom Alweendo because of the Vancouver-based company’s incapacity to proceed to the prefeasibility stage and complete the proposed drilling programme on schedule.
Deep-South brought the dispute before the Namibian High Court which ordered that until further consideration, no licences could be issued over the same area.
Deep-South spent more than C$2 million on the project between April 2017 and April 2021, which included an updated preliminary economic study. The miner has also suggested a feasibility study at C$7.1 million and a pilot plant worth C$25.5 million. In 2017, the business purchased the remaining portion of the project from one of its major shareholders, Teck Resources.
Using a US$3 per pound copper price and a 24-year life-of-mine with annual production of 35,332 tonnes of copper cathode and 51,080 tonnes of copper sulphate, the updated preliminary economic assessment from December estimated Haib’s after-tax present value at US$957 million with an internal rate of return of nearly 30%.
The result of the most recent order is that the minister must restart the application process for license renewal and make a new judgment. The court pointed out that in making its decision, it should not have disregarded the evidence provided by Deep-South subsidiary, Haib Minerals.
According to the verdict, the Minister and Mining Commissioner did not take into account Deep-South’s significant financial commitments to the development of a low-grade deposit.
The court concluded that they failed to assess how the Covid 19 epidemic affected the exploration programme. Additionally, the Ministry was mandated by the court to cover Haib Minerals’ legal expenses.
“This is a very favourable decision, and we are sure that we can establish a new positive working relation with the Minister and the new Mining Commissioner,” Deep-South Chief Executive, Pierre Leveille said in a statement. “It is also a significant ruling for Namibia since it demonstrates that the rule of law is upheld there. Our Board of Directors would like to thank our shareholders for their strong support over all that difficult period.“
The Minister and the Mining Commissioner have the right to appeal the judgement in the Supreme Court of Namibia, Deep-South said. If they decide to lodge an appeal, the request shall be filed within 21 court days from the date of the judgement, 10 March 2023.
