Cyprium Metals highlights $1.12b Nifty copper project valuation after turning down Appian Capital takeover offer

Copper mine developer Cyprium Metals (ASX: CYM) has rejected a takeover bid by Appian Capital Advisory on the grounds that it would not be in the best interests of shareholders.

Appian made the non-binding indicative offer (NBIO) last week for a cash price of $0.035 per Cyprium share.

The Cyprium board and legal adviser King & Wood Mallesons took just seven days to determine that the price did not reflect the company’s inherent value.

Board response

The board said some of the conditions outlined in the takeover proposal could be difficult to satisfy and others had the potential to delay or eliminate active pursuits by the company to create additional value from Cyprium’s asset portfolio.

“At the advice of legal counsel, Cyprium has determined to make shareholders and investors aware of the company’s receipt of the NBIO,” it said.

“Shareholders do not need to take any action [and] there is no certainty that the Offeror will remain interested in generating further proposals.”

Nifty PFS

Cyprium’s value was highlighted by a November pre-feasibility study (PFS) for the Nifty copper complex, which previously produced significant amounts of copper from oxide and sulphide resources.

The study established the economic viability of large-scale copper-in-concentrate production through the refurbishment of the project’s concentrator and the development of a new surface mine.

It confirmed a pre-tax net present value of $1.12 billion, underpinned by an average annual copper production of 37,300 tonnes per annum over the first ten years and a life-of-mine production of 718,000t.

Brownfield redevelopment costs of $458 million include $189m in capitalised operating costs and $239m to refurbish and expand the concentrator and upgrade site infrastructure.

Profitable development

Cyprium executive chair Matt Fifield said the comprehensive study demonstrated Nifty’s long duration and “immense profitability”.

“This is a large and important copper source and economic engine for Australia,” he said.

“There are few other near-term copper development opportunities that present the same scale, longevity and positive economics, and none that have the speed and cost advantages of a permitted brownfield site and access to WA’s world-class supply chain.”