Critical Metals aims for copper production before end-2022

Investment vehicle company Critical Metals is hoping to get its brownfield Molulu copper-cobalt project in the Democratic Republic of Congo into production by the end of 2022, and acquire two more projects at the same time, Executive Director Russell Fryer told S&P Global Commodity Insights.

The company was formed to identify and acquire brownfield mining opportunities and aims to acquire projects in five different African countries with five different polymetallic deposits that it can move into production quickly and get two streams of EBITDA for every one stream of ore mined, he said.

The company is focused on strategic metals, but will also consider other polymetallic and gold projects, Fryer said, adding that it was actively evaluating opportunities in commodities including tantalum, niobium, antimony, copper, cobalt and rare earth elements.

"We have a really aggressive rollout plan – we'll shoot for the stars and if we only hit the clouds... we'd like to complete this transaction, get it into production and hopefully do two more transactions by year-end or early next year," he said.

The company has a pipeline of potential companies that were perhaps streamlining their asset bases and was having coffee talks with these, he said, adding that anything the company purchased needed to be in production within 12 months.

Critical Metals announced the Molulu transaction in May 2021, which resulted in a reverse takeover, or RTO, suspension. This has continued longer than the usual six months, Fryer said, as the company was also working on another transaction that it eventually declined to move forward on.

However, the suspension was not an issue, he said, as in the meantime, the DRC government had made minor changes to some mining laws and brought in a "use it or lose it" law, which was essentially an audit of licenses that weren't being used.

"One of the important things when listed in London is ESG and we hadn't made allowance for the [DRC] government to have a 10% carry like they do with bigger companies," Fryer said, adding that, while Critical Metals was not required to by law, it wanted to make sure from day one that it had made allowances for that 10% if it was required, meaning it had been reworking some agreements.

"Our plan is once we get readmitted is to put the capital down to the mine, get the four open pits dewatered, build roads, put the mine cap that got stolen during COVID back together and start mining within 90 days or so from first mobilization," Fryer said.

The company will first produce copper and also plans to do some exploratory drilling with an initial budget of $200,000 to drill for cobalt, he said.

"We are a critical metals company, we're not an EV, battery metals company - our whole ethos and DNA is about supplying those metals that keep economies moving," Fryer said. "Without cobalt you can't have high temperature applications, you can't have nuclear power... you don't have that aerospace, so that's why we have cobalt," he said.

While he had found African countries to be welcoming, with improving and maturing policies, one thing that needed to be done was to speed up licensing, Fryer said.

"It's not the policy that's the issue, it's the pedestrian speed of licensing once an application is submitted - time kills all projects and particularly, we're now at elevated mineral prices, but everything is cyclical in our industry so prices are not going to remain elevated forever, so the speed of an application being submitted to approval is really key," Fryer said.

Cobalt prices have been strong in recent months, with the Platts assessment of 99.8% Co metal at $39.475/lb in-warehouse Rotterdam May 12, up 18% compared to the beginning of January.