Spotlight 🔍 Midnight Sun

Midnight Sun poised to make next
major copper discovery in Zambia

“After over a decade of presence in Zambia, we’re more confident than ever that we are on the brink of unlocking the next multi-generational copper deposit.”
- Adrian O’Brien, Midnight Sun’s Director of Marketing and Communications.

As the world intensifies its battle against climate change, the transition to electrification and renewable energy sources has sparked a soaring demand for copper – the essential metal that is at the heart of technologies powering a more sustainable future.

According to the International Energy Forum, copper demand is expected to double by 2035 while a recent S&P Global forecast predicts a chronic shortfall in copper supply from this year onwards.

Global mining giant BHP has also released a new report that copper consumption will increase by an additional one million tonnes annually on average until 2035.

In 2023, total copper demand reached 31 million tonnes. By 2050, BHP projections show the demand to grow by 70% to reach 50mt of copper annually. 

Against this backdrop of surging copper demand and anticipated supply shortfalls, it’s not surprising that the hunt for the red metal by Vancouver-based Midnight Sun Mining Corp. (TSX-V: MMA OTCQB: MDNGF) has gained significant momentum.

The company’s strategic focus on Zambia’s mineral-rich copper belt puts it at the forefront of efforts to secure the high-quality copper deposits needed to support the global shift toward electrification and renewable energy.

Guided by a seasoned geological team with a track record of multiple discoveries and successful mines worldwide, Midnight Sun intends to find and develop Zambia’s next generational copper deposit.

Its flagship Solwezi Project located in the heart of the Zambia-Congo Copperbelt – the second largest copper producing region in the world - spans 506 square kilometres and is surrounded by world-class copper mines and deposits.

They include Barrick’s Lumwana operations, which is merely 20km from Midnight Sun’s property that is boasting 960 million tonnes @ 0.55% Cu; First Quantum’s Sentinel (1.03 billion tonnes at 0.51% Cu); Ivanhoe’s Kamoa Kukula in the neighbouring Democratic Republic of the Congo (1.4 billion tonnes at 2.73% Cu) and China Molybdenum’s Tenke Fungurume mining operations (122 million tonnes at 2.06% Cu)

Right next door to Midnight Sun’s property in the copper hotspot referred to as the Domes Region, is First Quantum’s Kansanshi Mine, Africa’s largest copper mining complex, with a resource of one billion tonnes at 0.66% copper.

“The Domes Region is the number one spot on the planet right now for copper exploration,” said Adrian O’Brien, Midnight Sun’s Director of Marketing and Communications.

“We're the only junior with a very large land package in the middle of the Domes Region of Zambia and we are surrounded by some of the biggest high grade copper deposits in the world which are typically very shallow and easy to mine,” he said.

Midnight Sun’s hunt for copper in Zambia

Midnight Sun has identified four separate target areas within its property each with the potential for a transformative copper discovery. The targets are identified as Dumbwa, Mitu, Kazhiba (22 Zone) and Crunch Zone.

Dumbwa

Dumbwa is the company’s Tier-One exploration target which features a 20-kilometre-long soil anomaly with peak values of 0.73% copper, as well as numerous high-grade discovery drill intercepts. Last February, Midnight Sun inked an earn-in agreement with KoBold Metals, a cutting-edge exploration firm backed by tech luminaries such as Bill Gates and Jeff Bezos. This partnership injects $15 million USD into aggressive exploration efforts in the Dumbwa zone over the next 4.5 years. The Dumbwa Target area included in the KoBold agreement is 108² sq kilometres. KoBold is taking an aggressive approach to exploration plans, with drilling to begin systematic exploration of structural targets at Dumbwa.

According to the KoBold sediment-hosted copper team, which has decades of experience working in the African Copperbelt, the Dumbwa Target hosts intriguing copper-in-soil anomalies and a structural setting comparable to other major deposits in the region.

Kazhiba (22 Zone)

Midnight Sun has begun exploration work at the Kazhiba Target. This work is part of the Cooperative Exploration Plan in place with First Quantum Minerals designed to define near surface oxide copper resources as a potential feed source for First Quantum’s Kansanshi Mine, located less than 10 kilometres from Midnight Sun’s property. Drill results demonstrate that Kazhiba is a high grade, near surface, copper oxide opportunity with the potential for the mineralized zone to extend beyond areas previously drilled. The plan with First Quantum Minerals puts Midnight Sun in a position to receive significant near-term positive cash flow from the throughput of material from its property.

Mitu

Mitu is a target area located in the southwestern portion of Midnight Sun’s Solwezi Project. Mitu is also part of the Cooperative Exploration Plan in place with First Quantum Minerals designed to define near surface oxide copper resources as a potential feed source for their Kansanshi Mine. Significant high-grade, near-surface oxide mineralization has been intercepted in drilling at Mitu, and this oxide target will form the second phase of exploration work to be carried out under the plan with First Quantum. The plan with First Quantum Minerals puts Midnight Sun in a position to receive significant near-term positive cash flow from the throughput of material from its property. Additionally, successful results from drilling carried out in 2022 concluded that sulfide copper mineralisation intercepted at Mitu is associated with cobalt, nickel, and anomalous gold. This suite of metals is comparable in mineralization style and grade to that of the nearby First Quantum’s Sentinel Mine, which is associated with cobalt, nickel, and anomalous gold. Further exploration work is being planned for sulfide targets at Mitu, in conjunction with work planned to explore oxide targets.

Crunch Zone

The Crunch Zone exploration target is situated between the Kazhiba Dome in the northwest and the Solwezi Dome in the southeast. This newly identified structural target features a wedged fan of tight structural folds, located between domal structures, and linked to Kansanshi via a succession of sedimentary host rock. A VTEM survey identified the largest untested continuous EM conductive target/anomaly on the property, and this trend occurs in the same stratigraphy as that surrounding the neighbouring Kansanshi Mine. The anomaly remains largely untested & continuous for over 5 kilometres in length and 2 kilometres on strike. The sheer size and scale demonstrated by this anomaly, clearly indicates that appropriate investigation and attention is warranted. This conductive trend represents a potential new discovery at the Crunch Zone.

Midnight Sun the Top Pick for Investors

Midnight Sun’s operations in Zambia provided several compelling reasons for investors to consider it the Top Pick at two successive CEM investor summits this year. The summits attract North America's top investment advisors and small-cap fund managers to meet with Canada’s most promising lineup of public issuers.

The company garnered Top Pick status at the CEM-hosted TSX Venture Growth 2024 conference in Kelowna this past summer and was once again in the limelight at CEM’s 12th Annual Muskoka Capital Event, held last month.

Stock Information TSXV:MMA.V

1. As of market close on October 21, 2024
2. As the top pick at CEM Muskoka Capital Event held on September 27-29, 2024

I caught up with Adrian O’Brien, Midnight Sun’s Director of Marketing and Communications to take a deeper dive into the company’s Top Pick accolades:

What is attracting investors to Midnight Sun?

“When you're looking at copper today and why people should invest in it, you are dealing with one of most sought-after metals right now. In the global copper production landscape, most of the low hanging fruit has been picked, meaning most of the easy to find copper deposits in the world have been found. We are in one of the few places in the entire world where the remaining deposits have critical size, meaning, a size that's large enough to create global impact, given the imminent supply crunch that everyone is worried about. They are shallow high-grade deposits that are easy to mine. So that comes with a lower capital expenditure. 

Five of the top copper mines in Africa literally surround us. The top copper producer in Africa is less than 10 kilometers away from us and there is no doubt that Zambia is among the best places to be when it comes to mining. About 75% of Zambia’s export earnings are copper. They want to increase output and so if you find it, and build on the resource, the government is going to support you. Zambia is a welcoming and stable jurisdiction and mining powerhouse for 100 plus years. We have grade, we have scalability, we have location, and we are in a very supportive jurisdiction. And we are surrounded by billion-ton deposits. So, if you look at all of those pieces it starts to paint a pretty amazing picture for Midnight Sun. Taking that a step further, we have the funding in place.”

Midnight Sun recently announced some very impressive partnerships. What does this mean for the company?

If you take our 506 sq. km property and break it into four pieces each of the segments has the potential to host one of these billion-ton deposits and each of them has a unique underlying geological system that will drive the opportunity. Our objective is to bring in different parties for each piece and that’s what we have done with KoBold Metals to explore the Dumbwa Target. As you know KoBold is backed by major investors like Bill Gates and Jeff Bezos and uses its proprietary analytical tools and big data to accelerate the exploration process.  The Dumbwa target KoBold will be exploring has a 20-km-long soil anomaly with a peak grade of 0.73% copper, which is significantly higher when compared to the operating mines in the area. KoBold will spend US$15 million on exploration over the next four and a half years and make cash payments to Midnight Sun of $500,000, to earn a 75% interest in the target. 

That $15 million will be true exploration dollars going into the ground and the program will be very aggressive. KoBold has arguably put together the best geological team on the planet and it is led by David Broughton, KoBold’s chief copper geologist, who led the discovery of Kamoa Kakula, and was instrumental in the discovery and development of Kansanshi and other major mineral deposits in the region. We’ve been wanting Broughton to work with us for some time and all of a sudden, we’ve got him working with us on Dumbwa, which is one of his top copper picks in Zambia.

At the same time Dr Kevin Bonel has joined the Company as COO Zambia. Kevin has decades of geological experience in Africa and was recently responsible for unlocking Barrick Gold's Lumwana operations located directly west of our property, turning them from a Tier Two asset, into a Tier One asset in just 24 months and developing multiple decades of reserves for the project. 

The other key partnership we announced recently involves a Cooperative Exploration Plan with First Quantum to define potential feed sources for its oxide copper circuit at the Kansanshi Mine, which is less than 10km away from our property and connected by a haul road. We’ve been talking to them for a few years now about becoming a source of feed material because Kansanshi has depleted its oxide reserves. With targets at Kazhiba and Mitu falling under the partnership, we have identified and seized an opportunity to unlock near-term production, and with success, realize significant near-term, sustained cash flow. The Kazhiba exploration program has begun after which we will then move to the Mitu target, where good grades have also been found right at surface. If we're successful with our goals with First Quantum we could be in a situation where we see significant cash flow as early as this time next year.

What next for Midnight Sun?

“This year is set to be a pivotal one for us, filled with news and milestones. We have the dual advantage of near-term production potential alongside massive exploration upside. Our partnerships bring not just capital and expertise, but also a direct path toward production. With KoBold’s $15 million backing, we’ll be drilling 40,000 to 50,000 meters—enough to transform our targets into significant deposits, as seen with other discoveries in the region.

Immediate catalysts will center on our drilling progress, results from KoBold’s work, and advancements in our First Quantum exploration plan. After over a decade of presence in Zambia, we’re more confident than ever that we are on the brink of unlocking the next multi-generational copper deposit. By aligning our efforts with a market bracing for copper shortages, we are strategically positioned to tap into both immediate and longer-term opportunities in the global copper market.”

Our View

At the Investor Breakout Exchange, we see Midnight Sun as an attractive opportunity because of its strategic positioning in Zambia’s prolific copper belt especially as the demand for copper surges driven by the global shift towards renewable energy and electric vehicles.

• With the $15 million commitment from KoBold, Midnight Sun is well-equipped to fast-track drilling and analysis at its promising Dumbwa target, which has shown exceptional early indications with a 20-kilometer-long soil anomaly.
• The company’s recent agreement with First Quantum to explore feed sources for the Kansanshi Mine’s depleted oxide circuit is a strategic move that could generate early cash flow, providing financial stability while advancing larger-scale exploration efforts.
• Midnight Sun is led by a team with a proven track record of discoveries in copper-rich regions. The addition of Dr. Kevin Bonel, who has decades of experience and familiarity with the Zambian mining sector to work alongside KoBold’s top geologists, strengthens the company’s technical capabilities. This expertise enhances the likelihood of uncovering a major deposit and turning it into a producing asset.

With these elements in place, Midnight Sun offers a rare blend of near-term production potential and long-term growth through exploration. For investors, the opportunity lies in the company’s ability to deliver results amidst a global copper market that is increasingly reliant on new sources of supply.

The Investor Breakout advantage

As you already know, our Investor Breakout newsletter is based on the top picks and performers at CEM conferences, which are held seven times a year. These invite-only summits serve as the meeting ground for North America’s most influential investors and industry leading issuers that attend a day-long series of 1-1 meetings.

At the end of each event, after over 1,000 meetings have taken place, investors gather for the Breakout Exchange forum to identify their top picks.

Next Stop: Florida 

Mark your calendars! 

CEM is proud to announce the 8th annual Florida Capital Event, scheduled for November 22 to November 24, 2024, at the JW Marriott Miami Turnberry Resort & Spa in Aventura, Florida. This elite conference, marking one of the first major investor gatherings post-U.S. elections, is designed to foster strategic connections between companies and top capital finance leaders through carefully arranged one-on-one meetings and dynamic networking activities.

Warm Regards and Happy Investing,
Fabian Dawson