Copper 360 setback

Copper 360 missed its own projections by a country mile and has recorded its biggest loss since the company was launched.

Copper 360 is a copper mining company based in the Northern Cape. It is selling itself as South Africa’s next major copper producer.

It was formed in November 2022 following a reverse take-over of copper producer Big Tree Copper and copper mining company SHiP Copper.

Copper 360 CEO Jan Nelson told investors that they offer exposure to the only pure copper exposure available with major growth prospects.

The mining company was listed on the JSE’s AltX on 21 April 2023, and it was an instant hit. In the first week, its share price jumped from R5.00 to R12.25 per share.

However, the initial euphoria quickly wore off, and Copper 360 traded at R2.50 per share a year later.

The company regularly told investors that it had discovered that it had more copper than expected and at higher concentrations than initially thought.

These announcements temporarily spiked the share price, but it did not reach its highs when it was listed.

In April 2024, Copper 360 said it had noticed unusual trades in its shares and requested that the Financial Sector Conduct Authority (FSCA) investigate for potential market manipulation.

This seemed to have helped the share price increase from R2.50 per share to over R5.00 per share. However, it has fallen back to around R4.00 per share since this spike.

Many investors were waiting for the company’s latest results to see whether Copper 360 could produce on its promises.

At the end of November 2023, Copper 360 released a revenue and net profit forecast for February 2024.

It expected revenue of R161.7 million, a 385% year-on-year increase. It further said it expected a net profit of R18.7 million.

On Tuesday, Copper 360 released a trading statement for the financial year ending February 2024. It was not good.

The company notified shareholders that it expects a loss per share of between 12 cents and 10 cents.

This represents a total net loss between R64.5 million and R77.4 million – a decrease of between 17% and 41%  from the net loss of R55.1 million reported in 2023.

This net loss is a big deviation from its expected net profit of R18.7 million. This means that its forecasts were off by between R83 million and R96 million.

Copper 360 said the deviation in profits from its forecasted figures was mainly due to a poor revenue result.

The results may come as a surprise to many investors as the communication from the company in recent months indicated a significant increase in performance.

Copper 360 reported high copper concentrations and significant copper deposit upgrades at the Rietberg mine throughout 2023.

The company’s performance forecast looked overwhelmingly positive, with many investors expecting the group to report its first profits as promised.

However, by missing its latest earnings forecasts by such a significant margin, many investors may be sceptical about how realistic these forecasts are.