Koryx Copper: Seasoned Executives Aim to Unlock Value in Huge Namibian Copper Project

• Koryx Copper is a copper development company with an advanced project in Namibia called Haib. New leadership, and a team with a track record of success, is bringing credibility back to the story.
• The Haib project has significant scale with 2.5 million tons of copper resource (5 billion lbs) at 0.3% grade. Recent drilling has increased grades by 10-15% and identified high-grade structural zones.
• The prior PEA based on heap leaching is being discarded. An updated PEA in 2025 will use conventional processing (crush, mill, flotation) plus bio-leaching of low-grade material to improve economics.
• Near-term work includes growth and infill drilling to expand and upgrade the resource, and trade-off studies to optimize the processing approach. This aims to boost grades to 0.4-0.45% Cu to support higher capex.
• Koryx is well-funded with up to $20M cash and strong financial backing. CEO suggests the stock is undervalued with significant re-rating potential as the project is de-risked and advanced.

As the world accelerates its transition to cleaner energy technologies, the long-term demand outlook for copper looks exceptionally strong. Electric vehicles, renewable energy, and infrastructure electrification are all extremely copper-intensive. However, the project cupboard is bare, with a lack of new copper mines being developed to meet this growing demand. This supply gap presents a tremendous opportunity for copper developers that can bring new production online in a timely manner.

One company that aims to fill the supply gap is Koryx Copper (TSXV:KRY). With a large, scalable copper project in a top mining jurisdiction, a proven leadership team, and near-term catalysts on the horizon, Koryx offers investors exposure to the copper growth story.

A Globally Significant Copper Project

Koryx's flagship asset is the Haib Copper Project in Namibia. Haib hosts a massive sulphide resource containing 2.5 million tonnes (5 billion pounds) of copper at a grade of 0.35%. The deposit has been drilled extensively in the past, with over 70,000 meters completed by major mining companies like Rio Tinto and Teck.

What makes Haib unique is its sheer scale, with the potential to support a large, low-cost, open-pit mining operation with a multi-decade mine life. As Koryx CEO Heye Daun explains,

Haib has a pedigree going back to the 1970s...with a billion ton resource, it's a globally significant project even by major mining company standards.

Drilling Success Enhances Project Potential

Koryx has already had early success in enhancing the value of the Haib deposit through drilling. In late 2023 and early 2024, the company completed an 8,000 meter drill program that delivered a 10-15% increase in the copper grade, lifting it from 0.3% to 0.35% Cu. Importantly, this drilling identified structurally controlled high-grade zones within the broader deposit that had been missed by prior vertical drilling. 

With very limited amount of drilling, we have managed to get the grade from 0.3 to 0.35%. It's only a 10-15% increase, but it is very significant for a big project like this.

These results open the door for further grade improvements with additional drilling. Koryx is planning an extensive drill program for 2025 to infill and expand the high-grade structures, with a goal of boosting the overall resource grade into the 0.4-0.45% Cu range.

There is also significant potential to grow the overall size of the resource, which remains open at depth and along strike. The deposit has only been drilled to about 200 meters depth to date.

This project is open at depth. It can easily have 30-50% growth potential to the size...but that's not the primary objective because the project is already very big.

Rethinking the Process Approach

A key focus for Koryx is updating the process approach for the project. A prior PEA completed by the previous owner contemplated using heap leach processing. However, Koryx views this as suboptimal due to the inherent challenges of consistently heap leaching low-grade sulphide mineralization at scale.

The old PEA was based on bacterial heap leaching, which is feasible at a small scale but far too risky for a project of this size. If your bugs die inside the heap, your project is dead. [Bacterial] heap leaching at a large scale like this is far too risky - nobody would finance it.

Instead, Koryx plans to utilize conventional crush-grind-flotation to produce a copper concentrate, with the lower-grade material treated using bio-leaching as a secondary process. An updated PEA is underway incorporating this new process approach, which is expected to be completed by mid-2025.

While the higher intensity processing will increase the capital costs, it should enable more copper to be recovered and improve the overall project economics. The concentrate can be readily transported to smelters in nearby Zambia, Namibia itself or overseas. As Daun sums up, 

What we have to do is squeeze this project to have enough grade that we can pay for the higher capex required for conventional processing. By the middle of next year, the updated PEA will estimate the capex and opex and demonstrate the technical and financial feasibility.

Interview with President & CEO Heye Daun

A Proven Team to Deliver

Koryx benefits from a highly experienced leadership team with a track record of successfully developing mining projects. CEO Heye Daun is a mining engineer with a 30-year industry pedigree, including co-founding the Otjikoto gold mine that was later sold to B2Gold and the Osino gold exploration company that made a major discovery in Namibia.

Our key strength is execution and getting stuff done. At Osino, I put together a high-class exploration team that made a discovery, raised C$100 million, and took it to a DFS that led to the company being acquired.

The Osino team has reassembled at Koryx and is being supplemented by key additions, like Dr Trevor Faber who has extensive copper and capital markets experience as the former COO of Alphamin Resources.

This team knows Namibia intimately and has long-standing relationships with key government officials and regulators. This should help smooth the permitting process and project development timeline in a jurisdiction that is very supportive of mining.

Well-Funded to Execute

Following a series of recent financings, Koryx is well funded to execute on its planned work programs. The company is expected to have approximately $20 million in cash by the end of the year, sufficient to complete the updated PEA and planned resource expansion drilling in 2025.

Koryx's stock is tightly held, with management and key institutional shareholders controlling over 40% of the outstanding shares. Backers include prominent names like RCF (Resource Capital Funds), Ross Beaty, Mackenzie, Extract Capital, and Teck Resources. These groups did extensive due diligence on the company before investing.

We've got a great group of shareholders with deep pockets that believe in our vision. We don't need to raise money anytime soon. We've got the financial capacity to comfortably get us to a pre-feasibility study including all the bells and whistles.

Attractive Valuation and Re-Rating Potential

Following the recent financings, Koryx has approximately 65 million shares outstanding, giving it a market capitalization of roughly C$65-70 million based on its current share price. However, CEO Heye Daun believes the company is significantly undervalued compared to its peers.

If you compare us to our peers in South America or wherever, we are still grossly undervalued. I think just through delivery we can re-rate very substantially from here...then there will be another uplift when we prove the economic and technical feasibility of this project at a large scale.

As the company delivers on its planned milestones and further de-risks the project, there are a number of potential valuation catalysts on the horizon:

• Results from the expanded drill program showing further resource growth and grade improvements
• Completion of the updated PEA demonstrating the economics of the revised process approach
• Progress on key development milestones like permitting and project financing
• Signing an offtake agreement with a major smelter or trading company, validating the marketability of Haib's concentrates

Looking further out, Daun is confident that Haib will eventually be of interest to major mining companies once it is significantly de-risked and ready for construction. 

This is a big project, even by my standards. Our sweet spot is in the permitting, de-risking, and advancing - getting it ready to be built...that's when the big players come in because they don't want to deal with the early stages.

With Haib being a large, long-life asset in a stable and mining-friendly jurisdiction, it has all the attributes to appeal to major miners seeking to secure long-term copper supply. Successful examples of juniors that have been acquired after making a discovery and advancing a copper project to later development stages include Equinox Minerals (Lumwana mine - acquired by Barrick Gold) and Frontera Copper (Piedras Verdes mine - acquired by Invecture).

The Investment Thesis for Koryx Copper

• World-class, globally significant copper project in a top mining jurisdiction (Namibia)
• 2.5 Mt (5B lbs) at 0.3% Cu with substantial growth potential from recent high-grade drill results
• Planning an updated PEA utilizing a conventional processing approach to boost recoveries and economics
• Near-term catalysts include expanded resource drilling and the updated PEA
• Well-funded with $20M to execute on all planned work programs with strong financial backing
• Proven CEO and management team with a track record of developing and monetizing mining assets
• Undervaluation with significant re-rating potential as the project is systematically de-risked
• An attractive eventual takeover target for a major miner once Haib is construction-ready

Key Takeaways

The energy transition will require substantial amounts of new copper supply to be developed over the coming decades. However, a lack of new mine development and declining grades at many of the world's largest copper mines points to an emerging supply deficit.

Against this backdrop, Koryx Copper offers investors the opportunity to gain exposure to a large, scalable copper project in a top mining jurisdiction. With a new management team that has a track record of successful mine development, strong financial backing, and multiple near-term catalysts, the company is positioning to advance Haib up the value curve and eventually attract the interest of a major miner.

Macro Thematic Analysis

The copper price outlook is underpinned by the global energy transition that is now underway. Efforts to decarbonize the world's energy systems and shift to renewable power generation are extremely copper intensive given copper's use in electric vehicles, charging stations, solar panels, wind turbines, and electricity transmission infrastructure.

However, the pipeline of new copper projects is insufficient to keep pace with this demand growth, setting the stage for a prolonged supply deficit. Many of the world's largest copper mines are seeing declining grades and require ever-increasing amounts of capital just to sustain current production levels. The lack of exploration and development spending by the major miners over the last cycle also means the project cupboard is relatively bare.

This situation is creating opportunities for smaller development companies that can bring new copper production online in a timely manner. As Koryx Copper CEO Heye Daun sums it up:

Whether you are a believer in the decarbonization revolution or not, the world needs a lot more copper. What makes Haib unique is that the deposit is there - it doesn't have to be discovered anymore, it only has to be made better and then permitted. We just have to do the studies, cross the t's and dot the i's, and we'll get there within a very reasonable timeframe of about three years. That's what gives this project real scarcity value.