Midnight Sun looks to Zambian copper giants next door to solve Solwezi puzzle

Al Fabbro has been looking for answers for a decade now, ever since Midnight Sun Mining (TSXV: MMA) acquired the Solwezi copper project in Zambia. 

The chief executive believes that Solwezi could hold the same scale of deposits as First Quantum Minerals’ (TSX: FM) neighbouring Kansanshi mine, which produced 146,000 tonnes of copper last year. 

Or for that matter, the other nearby world-class copper mines: Barrick Gold’s (TSX: ABX; NYSE: GOLD) Lumwana, First Quantum’s Sentinel, or on the other side of the border with the Democratic Republic of Congo, Ivanhoe Mines’ (TSX: IVN) rich Kamoa-Kakula. 

Solwezi has generated some excellent drill results. That includes a 2013 reverse-circulation hole that returned 21 metres grading 3.26% copper from 20 metres depth in the 22-zone. The official discovery hole, diamond drill hole DD-14-10 completed the following year, returned 11.3 metres (true width) at 5.71% copper. 

For the past 10 years, those and similar results hinting at something big have kept Fabbro and VP exploration Rob Sibthorpe going. But modest financings raised as the market — or friends’ and families’ pockets — allowed have only gone so far. 

Without a major drilling program — out of reach for a junior of its size — Midnight Sun can’t turn its prospective geology and good neighbourhood into a discovery the scale of which would interest a major. 

Fabbro, a 30-year veteran in the finance and mining sectors, including stints at Yorkton Securities and Canaccord Genuity, and as a lead director for Roxgold (now part of Fortuna Silver Mines [TSX: FVI; NYSE: FSM]), says the project has generated “great smoke,” so far. 

“There’s a forest fire going on here, but we still don’t know where the forest fire is,” he told The Northern Miner in July. 

But Fabbro is hoping to soon attract a partner with deep enough pockets to fund the 40,000- to 50,000-metre drill program needed to get real answers about Solwezi’s potential. 

Kansanshi parallels 

Midnight Sun’s 506-sq.-km Solwezi land package contains multiple targets and two high-grade discoveries — Kaziba Dome and Mitu — that are similar to Kansanshi. 

Kaziba is underlain by a basement dome, the same geological feature that’s associated with copper mineralization at Kansanshi, Lumwana, and Sentinel. 

Its 22 Zone discovery at Kaziba Dome was its earliest target and the one that’s seen the most drilling so far. However, it also seems to be the most complex target at Solwezi. 

“We had a lot of good holes, but then we figure he had the structure and we’re marching along it, and God, we’d hit this barren hole of marble,” Fabbro says. “It was really hard to figure out.” 

The mystery of the spotty results hasn’t been easy to solve.  

But parallels with Kansanshi, a sediment-hosted vein deposit that lies just 10 km to the northeast, suggest that may not be unusual. 

“Kansanshi is basically a low-grade deposit maybe 0.25 to 0.3% (copper), then they hit these big wide 10-metre-wide veins that run up to 5% copper, and the 5% carries the low grade” Fabbro says. “But if you don’t have the veins, it doesn’t work.” 

Those veins are present at targets at Solwezi, including at the newly identified Crunch zone, which has returned 10 metres of 2.5% copper in sections with those wide calcite veins. 

Misunderstood deposit type 

In 2020, Midnight Sun signed an option agreement with Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO). 

Under the $51-million, three-stage JV agreement, Rio Tinto could earn up to 75% stake in Solwezi. The investment would fund enough work to finally understand the project’s potential. 

But Rio terminated in June 2022 without earning an interest. 

It wasn’t because of a lack of potential, though, Fabbro says. 

“While Rio Tinto were not satisfied with the results generated by their work on our properties, I do not share their feelings,” he said in a news release at the time. “From the outset of this agreement, Rio Tinto made it clear to me they were looking for a ‘Rio sized deposit.’ Falling short of their parameters does not mean we don’t have the makings of an economic orebody on our hands.” 

Fabbro notes that few companies, including Rio Tinto, have expertise in sedimentary-hosted copper compared with porphyry deposits. 

“Until (Robert) Friedland came across with Kamoa and Kakula, these things were not really well recognized, even with the success of Kansanshi and First Quantum,” Fabbro says. 

Rio’s key expert in the deposit type, who had been the technical lead at Solwezi as part of its option agreement, left the company shortly after drilling began. 

After that, Rio focused more on geophysical work, in the end completing less than 6,000 metres in combined diamond, RC and air-core drilling. 

While it was disappointing to lose a potential major partner, Fabbro notes that Midnight Sun still got some benefits out of the short-lived arrangement, including cash payments and reams of geophysical data. It’s brought on Simon Dorling, an expert in the Zambian-Congo copper belt, as an adviser to bring the Rio-generated data together with recent research in the region and previous data from Solwezi to build a comprehensive database and help interpret structural-geological settings to identify new targets. 

Fabbro says there will be a drill program this year at Solwezi – the only question is the number of metres and who will fund it. 

Copper moment 

As miners scramble to secure deposits of the red metal in light of its importance to the energy transition and a projected supply gap by 2030 or earlier, copper is in the spotlight. Zambia, as a prospective, underexplored and mining-friendly jurisdiction appears poised to benefit. According to Bloomberg, Barrick Gold recently approached fellow copper belt miner First Quantum with a takeover offer. And in July, Barrick CEO Mark Bristow singled out the Zambian-Congo copper belt as an area where the company is looking for copper assets as it’s also investing to extend Lumwana’s mine life. 

In December, Kobold Metals – an AI exploration startup backed by the likes of Bill Gates and Jeff Bezos — committed to US$150 million in funding for the Mingomba copper-cobalt mine in Zambia. 

Fabbro says the current President Hakainde Hichilema, who is the leader of the United Party for National Development and was elected in 2021, “gets mining.” 

“He is a man of the people of the north, where the mines are,” Fabbro says. 

Hichilema has said he’s targeting a 3.5-fold increase in copper production to 3 million tonnes per year by 2032. 

Other targets 

Recent work has also focused on the Mitu trend, an 8- to 10-km wide corridor of intense deformation that lies on the western margin of the Solwezi Dome on the property, and about 20 km south of Zone 22. 

Last year, Midnight Sun completed a 17-hole, 3,600-metre diamond drill program — seven holes at Mitu and 10 at the Crunch zone, which lies between the Kaziba and Solwezi zones. 

Drilling at Mitu Trend, an “ore shale” type deposit like Kansanshi, has returned highlights including 11.6 metres of 3.44% copper 0.067% cobalt, 0.058% nickel and 331 parts per billion gold in 2017, and 11.5 metres of 1.41% copper, 0.11% cobalt and 0.3% nickel in hole MTDD044 completed last year. 

Finally, Dumbwa, a 20-km-long, 1-metre-wide soil anomaly that’s on strike with Kansanshi, is the least developed target, but perhaps the most prospective. Dumbwa is believed to be analogous to Lumwana, 60 km west, with stacked mineralized horizons, and will be the company’s priority this year. So far, it’s only seen a few shallow holes, with a highlight hole of 16.5 metres of 0.93% copper, including 5 metres of 1.36% copper. 

Midnight Sun has a tight share structure for a 10-year-old junior mining company, with 117.9 million shares outstanding. The stock is currently trading at 24¢ in a 52-week window of 24-35¢, for a market cap of $27.9 million.