Critical Metals PLC (LSE:CRTM) is on the cusp of becoming that paragon of London-listed junior mining companies: the small scale operator that’s generating enough cash to keep the lights on and fund further deals and expansion.
The project that will deliver this status to the company is Molulu in the Democratic Republic of Congo, a relatively small copper-cobalt project that should be straightforward enough to get into production.
Indeed, the chief executive of Critical Metals, Russell Fryer, talks confidently of all the newsflow that Molulu’s likely to generate in the near term: first drilling, first ore sales, and first receipt of revenues.
Before that, though, there’s the small matter of actually tying off the acquisition itself.
The deal is so far advanced it’s practically done.
“The critical papers are all signed,” explains Fryer.
“We’ve just got to get FCA regulatory approval and make payment. We’ll only make payment when the FCA says you’re good to go. But we can do early mine work, early preparation work.”
Indeed, Critical Metals already has security on site at Molulu, and you can tell that Fryer himself is itching to set everything in motion.
“From the time I pull the trigger it’ll be 90 days till first sales,” he says.
Initially the plan is just to sell ore outright. Critical Metals is well into negotiations with several local plants that would be capable of processing its product. And after all, the Democratic Republic of Congo is one of the world’s great copper mining addresses – so there will be plenty of choice.
In the longer run, though, it’s possible that Critical Metals might take the processing of its ore in-house. Indeed, it’s already been in talks in regard to the acquisition of a processing plant, although as things stand, nothing’s come of those.
Even so, it looks as though the company’s just a couple of ticks in boxes away from setting up as a small scale producer, and laying a secure foundation for its broader expansion plans.
These haven’t changed since Critical Metals first listed over a year ago.
The plan is to operate across sub-Saharan Africa, and to be involved in the production of a variety of metals that will be critical to the global economy of the future.
Exactly how that vision turns out will depend, of course, on the types of deals that come across Fryer’s desk.
But as a back-of-the-envelope exercise, a hypothetical future for the company might involve it holding a copper-cobalt asset in the Democratic Republic of Congo, a tantalum project in Rwanda, a tin project in Namibia, a wolfram or antimony project in Zimbabwe, a vanadium project in South Africa, and a niobium or cassiterite project in Kenya.
Will it turn out that way?
Hard to say. For one thing, Fryer says that current expectations about asset valuations are unrealistic, and that he’s had to keep his powder dry in situations where more attractive terms might have got deals done.
On the other hand, he’s off to Indaba in a couple of days, will be talking to a couple of useful contacts down there, and is confident of coming away with several good leads at the very least.
He concedes, too, that Africa isn’t always the easiest place to operate, but then brings the conversation back to his home turf: North America. The right legal action, he says, speaking from experience, can stymie projects completely. At least in Africa you can get things built.
For now, he spends most of his time assessing potential new deals and working on getting the Molulu acquisition closed. Indaba could prove fruitful, and if nothing else, Fryer is confident that he’s in the right space.
“Copper is a commodity for the long-term,” he says.
“I’m not sure how you substitute it.”
And the same is true for the other commodities that Critical Metals is targeting too.
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