Copper 360 misses by a landslide

Copper 360’s latest financial results revealed it missed its targets by a huge margin and that it spent far more to produce copper than what it makes.

On Thursday, the company released its reviewed condensed consolidated financial results for the year ended 29 February 2024.

It revealed that Copper 360’s revenue fell from R33.3 million to R31.62 million – a 5% decrease from the previous year.

Even more concerning is that its net loss before tax worsened from R77.7 million in 2023 to R104 million in February 2024.

Its copper production was even more disappointing. Pre-listing, Copper 360 said it produced 400 tons of copper per annum.

It told investors that by March 2023, its cathode plant would produce 100 tons of copper per month.

It also told investors its copper concentrate processing facility would produce 600 tons of copper metal by November 2023.

Therefore, investors expected Copper 360 to produce between 3,000 and 4,000 tons of copper for the 2024 financial year.

However, Copper 360 reported a mere 313 tons of copper for the entire year, less than it produced pre-listing in April 2023.

In its February 2023 annual report, Copper 360 told investors it was on track to produce 7,890 tons of copper per annum by February 2025 and 15,000 tons by April 2026.

That means that Copper 360 has to somehow produce an additional 7,667 tons of copper in the following year to meet its February 2025 goal.

The Copper 360 management sold it as a growth company with excellent copper-producing capabilities. To date, there has been no evidence of this being the case.

Copper 360’s financial performance is also miles away from its guidance in its pre-listing statement.

The pre-listing statement indicated that Copper 360 would generate R463 million in revenue for the February 2024 financial year.

The actual revenue of R31.6 million is only 7% of what Copper 360 promised investors when it listed.

Copper 360 further told investors that it forecasts an operating profit of R245 million for the February 2024 year. The latest results revealed an operating loss of R96 million.

Copper 360 was not even able to generate gross profit. It reported a gross loss of R38 million.

Simply put, Copper 360’s selling price for its copper is significantly lower than what it costs them to mine the copper.

This means that for every R1 that Copper 360 spends to mine copper, it only gets back R0.45 in revenue by selling the copper. The more copper it mines and sells, the more money it loses.

This loss does not even take the additional R74.5 million in other operating overhead costs into account.

Copper 360 has not yet proved that it can profitably produce copper metal and provide value to shareholders.

The table below shows what Copper 360 told investors it expected to achieve and its actual achievement.

Copper 360 (R million)Company ForecastActual Result% Difference
Revenue R462.52 R31.62-93%
Gross profit R289.21-R37.82-113%
Operating profit R244.83-R95.98-139%
Profit for the year R174.94-R70.59-140%