This article is a sponsored feature from Mining.com.au partner True North Copper Limited. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Turnaround stories in the small cap resources space are few and far between, but True North Copper (ASX:TNC) appears to be on the right track after it rounded out 2024 with a $53.4 million recapitalisation and pivot back to exploration.
While voluntary administration can be an uncertain time for companies and shareholders, True North received some “very positive sentiment” from its investors on the best way forward, according to Managing Director Bevan Jones.
True North was producing copper from its Cloncurry Copper Project in Queensland, but only on a small scale, which limited its cash flow at the same time it was unable to drawdown on its existing loan facilities or raise additional capital. This forced a bit of a strategic rethink.
“Initially, the people who wanted to invest in us said, ‘we like the story, we like what you guys have tried to do, but we think that you need a bigger mineral inventory and you need to get some value out of the exploration potential that everybody sees in you that keeps getting pushed to the back burner because of your operational focus’,” Jones tells Mining.com.au.
“The top 20 shareholders of TNC spoke quite loudly through a consortium led by Morgans and Canaccord, which put together a proposal in conjunction with the TNC leadership.
“There was a high degree of sentiment that the TNC story was a worthy story, and it was of interest to people.”
Jones says what emerged from the process as a key learning for a small company was the need for scale.
“The original 4.5 years, 1 million tonnes per annum, 6,000 tonnes of copper a year is doable, and it makes good money whilst you’re operating – all things being equal and going well,” he explains.
“But if you have a hiccup, it’s nice to have a bit of scale so you can pick the slack up somewhere else. So this concept of where to from here needs to include scale, more assets and more access to throughput.
“This has given us the opportunity to go back and have a rethink about it, go out and do some of this exploration work, come up with a plan that has more tenure and more likelihood of success, and then come back and talk to the investors about where to from here.
“We think that there’s as much value from growing the mineral inventory as trying to make a small-scale mining operation work.”
From administration to acceleration in months
At the time True North went into administration, the resources landscape in regional Queensland was evolving, with Glencore (LSE:GLEN) preparing to mothball its Mount Isa copper operations, removing a significant chunk of copper production from the market and leaving its smelter short of supply.
The Queensland Government was also investing in projects like CopperString, which will provide 840km of new electricity transmission line to connect Queensland’s Northwest Minerals Province to the National Electricity Market.
True North paused production at Cloncurry to refocus on building its resource base and extending the mine life.
“Since going into voluntary administration, we’ve had this situation where more throughput has opened up in the region and so we have a couple of options that could potentially see us north of 2 million tonnes per annum,” Jones says.
“That changes the landscape of where you can operate significantly. It means that instead of being stuck at 6,000 tonnes of copper a year, it means that we can be looking at twice that much. We’re seeing opportunities open up for us.”
In June, geophysics identified multiple large-scale drill targets at the Salebury iron oxide-copper-gold system within the Cloncurry Project.
True North also uncovered new zones of copper-gold-cobalt mineralisation outside of the Great Australia Mine resource at the Cloncurry Project.
These new zones were intersected at the Copperhead, Coppermine Creek and Paddock Lode South prospects during a 3,444m, 17-hole reverse circulation drilling campaign.
True North says Cloncurry is underexplored with multiple highly prospective, drill-ready targets, including near-pit opportunities to expand the current mine life and optimise the mine plan.
This discovery was followed in early July by a new copper-cobalt-silver discovery at the Aquila Prospect, part of True North’s advanced Mount Oxide Project.
Aquila is one of six priority, previously undrilled prospects being tested in an up to 8,000m reverse circulation drilling campaign.
Drilling intersected copper mineralisation from the surface within two broad zones. The upper zone returned top intercepts of 30m @ 2.45% copper, 0.02% cobalt and 6.2 grams per tonne silver from 20m, including 10m @ 5.31% copper, 0.02% cobalt and 12g/t silver from 31m.
The Aquila Prospect is located over 4km northeast of True North’s existing Vero indicated and inferred copper-silver resource of 15.03 million tonnes @ 1.46% copper and 10.59g/t silver and measured, indicated and inferred cobalt resource of 9.15 million tonnes @ 0.23% cobalt.
Exploration pivot unlocks scale and value
True North says the Aquila discovery demonstrates the key characteristics of a new large-scale copper deposit, with the mineralisation remaining open and extending beyond the most recent drilling.
The broader Mount Oxide Project is located on the Dorman Fault – a major regional fault system, with over 10km of strike hosting the Vero resource.
“In fact, of the 10km strike length of the Dorman Fault which we have in that area, the Vero deposit is only about 1km of that,” Jones notes.
“So there’s 9km that’s unexplored, and there’s a lot of surface mineralisation and some very interesting geology in the area.”
True North relisted on the ASX in mid-January and was trading at just under $0.50 a share. After less than four months of being back on the bourse trading and trending down, True North turned a corner with a steady flow of positive news and an uptick in investor interest.
Between May and late June, the company rallied as much as 193% to $0.44 and while it has edged back, the stock is still up 127% since May.
To keep the momentum going, True North is keeping its finger on the pulse of other potential opportunities for growth in the Mount Isa region.
“There is a need for regional consolidation. It is a bit of a jigsaw puzzle how that’s all pulled together, but the pieces are starting to come together,” Jones says.
“We have been very closely looking at opportunities that could see consolidation in the region potentially.
“The entire region is centred around the copper smelter, all the facilities of Glencore. But all of the near-term production is not in the hands of Glencore.
“Specifically, it’s in the hands of companies like True North Copper. We are fortunate to be in the situation where we are in the box seat.”
Write to Angela East at Mining.com.au
Images: Mining.com.au & True North Copper
