Copper 360 has serious challenges

Copper 360 has missed its targets by a huge margin without any indication that things will change anytime soon.

Late on Friday, 29 November, at 17:00, Copper 360 released its unaudited interim results for the six months ended 31 August 2024.

Copper 360 reported a significant deterioration in its profitability, showing that the business is not sustainable in its current form.

It reported a gross loss of R15.7 million, which means the group could not sell its copper for more than it cost them to produce.

In addition, Copper 360 generated a net loss of R78.1 million, representing 111% of its total revenue for the period.

The group increased its copper sales by 263%. However, this was from a very low base of only 212 tons in the previous period.

The group reported producing only 526 tonnes of copper for the half-year period ending 31 August 2024.

The reported 526 tonnes of copper produced is significantly lower than the targets Copper 360 shared with investors.

Copper 360 said in its pre-listing statement that it would produce 480 tonnes of copper per month from July 2023, 100 tons from its cathodes, and 380 tonnes in concentrate.

The company then reported that starting in November 2023, its combined cathodes and concentrate plants would produce around 700 tonnes of copper metal per month.

This never happened. In February 2024, Copper 360 reported that it produced a mere 313 tonnes of copper for the entire year.

This means that Copper 360 only produced 26 tonnes of copper per month, a far cry from the 700 tonnes per month figure it shared with investors.

Despite the incredible underperformance, Copper 360 did not fail to dream even bigger and increase its targets.

In its February 2024 annual report, Copper 360 stated it was on track to produce 12,000 tonnes of copper in the 2025 financial year.

This translates to an average copper production of 1,000 tonnes per month from February 2024 to February 2025.

Meeting this target has not gone well so far. In its August 2024 interim reports, Copper 360 reported that it only produced an average of 88 tonnes per month.

The lost production means that Copper 360 will need to produce an average of 1,912 tonnes per month from September 2024 to February 2025 to meet its target in February.

This is a noticeable increase from its latest reported 88 tonnes of copper per month, as shown in the chart below.