RE: RNS29 Nov 2025 16:10
Something to chew on.
There are three parts to the valuation
1. SML - The open Pit.
2. SML - The underground - but potentially reachable from a ramp down from the open pit
3. Exploration Target - The deeps - potentially 65mt @2.37%
Contained Copper Tonnage
1. Open‑pit–amenable resource (Option 1): about 5.8 Mt at 1.0% Cu above a 0.25% Cu cut‑off ≈ 58,000 t contained copper
2. Underground resource (Option 2): about 6.3 Mt at 1.5% Cu above 1.0% Cu ≈ 94,500 t contained copper
3. Ignore for now. It's blue sky and they GLR hase to confirm the ZCCM source of a large deep potential figure (which is why GLR bought the asset)
Contained Copper Value
Option 1. Gross metal value: 58,000 t × 10,000 USD/t = 580,000,000 USD.
Option 2. Gross metal value: 94,500 t × 10,000 USD/t = 945,000,000 USD.
Recoverable - say 85% (usually 80% - 90% for modelling purposes)
Option 1. Recoverable copper (85%): 58,000 × 0.85 = 49,300 t. Revenue at 10,000 USD/t: 49,300 × 10,000 = 493,000,000 USD.
Option 2. Recoverable copper (85%): 94,500 × 0.85 = 80,325 t. Revenue at 10,000 USD/t: 80,325 × 10,000 = 803,250,000 USD.
What are the costs - proxy
1. Jubilee Metals Group recently reported a copper cost of US$5,948/t for its Zambian operations in H1 FY2025, inflated by a once‑off ore price adjustment of US$573/t; stripping that out implies an underlying cost of about US$5,375/t.
What does that mean
Option 1. First off the block
Operating cost @ 5,500 USD/t: 49,300 × 5,500 = 271,150,000 USD.
Operating surplus (pre‑royalties, tax, etc.): 493,000,000 − 271,150,000 = 221,850,000 USD.
Capex I expect to be outsourced to Opex and included in the $5,500 per tonne. Open Pit is the cheapest method.
Say 4.5 year life mine - Average annual operating surplus: 221,850,000 ÷ 4.5 ≈ 49,300,000 USD per year.
GLR own 75%, Statunga 25%. If a deal with Jubilee is done I expect a further pro-rata of some of it.
If a third party buys the open pit - I expect they may get it for (assumption) 30% of the LOM value = $66.5m = £50.5m. From a buyer’s side, having clear underground and deep potential in the same mining licence area increases strategic value; even if the sale is structured around Option 1 economics, the buyer knows they may negotiate later phases if the project performs well.
Option 2.
Bigger. If some of this is mined via open pit ramp-down underground operations, or if optimisation leads to a deeper or larger pit shell, total life of mine (open pit plus underground) could extend significantly beyond the initial 4–5 year open‑pit schedule, but no definitive combined LoM has yet been published.
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