Handa Copper Pens First Agreements For African Properties

Handa Copper Pens First Agreements For African Properties

By: Tomas Ronolski - AllPennyStocks.com News

Tuesday, April 29, 2014

The Republic of Congo was the sixth-largest copper producer in the world in 2013, overtaking Zambia to become the biggest producer in Africa. By producing 846,000 metric tons of the industrial red metal, Congo edged out Zambia by about 2 percent, the first time the country outproduced its southern neighbor in 25 years. The country is home to some massive base metal reserves, including state-owned Gecamines Deziwa and Ecaille C mining concessions, which have 4.9 million certified tons of copper and more than 400,000 tons of cobalt reserves. The War in Congo, poor management and electric power problems have made the mammoth project a challenge, to say the least, in the last three centuries, choking production from nearly half-a-million tons per year in the early 1980’s to only 41,000 tons in 2013. Gecamines said last week that it intends to ramp-up production to 60,000 tons this year. Vancouver’s Handa Copper Corporation (TSX-Venture:HEC) has a goal to get a piece of the Congo copper pie as part of its overall strategy to build a portfolio of copper projects in Africa. Handa has come about in a round-about fashion, originally called New Hana Copper Mining Ltd., a spin-out of Hana Mining, a company acquired by Cupric Canyon Capital LP in February 2013 for $82 million. Last week, New Hana Copper Mining changed its name to Handa Copper Corp., although nothing was changed with the capital structure in connection with the new name.


Handa is a branding move referencing a copper ingot that was cast in the form of a cross and used as a form of currency about 500 years ago in what is now the Democratic Republic of Congo. The name is meant to signify the company’s commitment to developing copper projects in Africa.

In announcing the name change, newly-coined Handa president Jon Stacy, commented, “I am confident that in the near future we will be able to announce our first project in what we expect will ultimately be a portfolio of noteworthy copper projects in Africa."

Looks like that was some foreshadowing by Stacy as on Tuesday, Handa said that it entered into two, separate binding agreements for projects in the Republic of Congo. The first is with Renaissance Copper S.A.R.L for its 3,000-square-kilometer Maboudou project located within the department of Niari in the north part of Congo. The second is with Nirvana Resources S.A.R.L for its 5,100-square-kilometer Banda-Kayes project in the department of Bouenza in the southern portion of the country. Handa can earn a 100-percent interest in each of the projects.

Although the agreements are completely independent of each other, they carry the same terms. Handa can earn a 20% interest in a project for $200,000 in cash. Handa can raise its interest to 51% by paying another $200,000 and proving the first inferred copper resource on a property within 32 months of Research Permit. To earn the remaining 49%, Handa is required to (in summary) make a $3 million payment, complete a bankable feasibility study and receive a mining permit. The original owners will retain a 1.455% production royalty on the respective project.

"I see these agreements as an opportunity for the company to play a major role in what may prove to be one of the last undeveloped copper provinces in the world," said Stacy in a prepared statement. "In geological terms, the West Congolian Belt is very similar to the Central African Copperbelt; all the ingredients are present and there are many known copper showings, but it has never been systematically explored…we have every reason to believe that large-scale Copperbelt-style deposits like Kansanshi, Lumwana and Sentinel could be present.”

Stacy, a lifelong Zambia resident running the company’s operations from their offices in the country, added that Handa has sufficient funding to execute the first phase of exploration, with mobilization to the fields expected in the near term.

This is a classic early-stage growth play (to the extent that the website isn’t up and running yet) with the acquisition of a first property in what could prove to be a prolific base metal region. With a market capitalization of only $1.48 million and $2.25 million in short-term investments as on October 31, 2013 on the books, investors may start paying attention to where these agreements lead the company as the story is told. Proper due diligence is, as always, encouraged.

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