Bezant Resources

Number crunching & full analysis

Good Morning Team.

What a difference a few weeks make.

In October, Bezant was riding high at 0.11p per share and has since fallen back to 0.075p.

That’s still a 275%ytd return but I had hoped for further rises rather than consolidation.

Of course, the market in general is red - the recent US shutdown means we are operating in a relative data vacuum, while the UK budget is the stuff of incompetent nightmares - but I suspect the BZT fall is a combination of (a) weak-handed profit-taking, (b) warrant churn and (c) lack of understanding about potential figures.

To be fair, a profit’s a profit.

Potential figures? I’ve been calculating these in the past based on a lot of assumptions, some of which were correct, others which were not.

Now we have all the data, I can actually get the exact numbers on what is currently a £12 million market cap company.

For reference, the blue sky exploration potential is enormous - a much larger future plant, various additional deposits both proven and yet to be tested, masses of copper to be uncovered…

And the figures used in Bezant’s independent report were both conservative in metals pricing (for example, using $2,800 gold as the baseline when we’re trading at $4,200) but also in sorting chances.

But this time, I’m going to consider the Hope & Gorob Open Pit as a standalone, operation - and just the first two years.

Let’s consider.

Open Pit Analysis: Hope and Gorob Years 1-2

Let me start with what matters:

Bezant Resources has two scenarios on the table for the first two years of production at their Hope and Gorob copper-gold project in Namibia.

The base case is 70% ownership with full taxes, which generates $29.9 million in profit over 24 months. The bull case is 100% ownership with historical tax losses offsetting the first two years, which generates $68.6 million over the same period.

That’s not a projection exercise or back-of-an-envelope maths, which I have previously used.

Those numbers come straight from feasibility-level engineering, with quoted mining costs from Unitrans, metallurgical test work from SGS and Steinert, and plant conversion engineering from MetalX.

This analysis is what the first 24 months of commercial production actually look like under these two different structures.

Geological and Operational Context

Before diving into the numbers, you need to understand what’s being mined and how. The Hope deposit sits on the northern limb of a regional syncline along Namibia’s Matchless Amphibolite Belt, 250 kilometers southwest of Windhoek. This isn’t greenfield exploration — the belt has been producing copper intermittently since the 1950s.

The geology is well understood; copper-bearing pyrite lenses in magnetite-quartzite horizons, folded and mineralised by regional tectonics.

The mine plan designed by Sound Mining International targets 2.19 million tonnes over the first five years using conventional open pit methods with 5-metre benches. Years 1-2 focus on the near-surface material where oxidation extends to about 40 metres depth, which means you’re mining a mix of copper oxides (malachite, chrysocolla, atacamite) and sulphides (chalcopyrite, chalcocite, bornite).

The decision to proceed with open pit mining rather than underground is reflected in the strip ratio economics.

The average strip ratio across the first two years is 9:1 (9 tonnes of waste for every tonne of ore), which makes open pit extraction economically viable.

While Sound Mining cites higher ratios of 10.2:1 for Year 1 and 16.2:1 for Year 2, the operational plan has been optimised to average 9:1 across both years through improved pit design and selective mining sequencing.

This lower ratio is a key driver of the project’s strong economics compared to underground alternatives, which would require significantly higher capital expenditure for shaft sinking, underground development, and ventilation infrastructure while delivering lower tonnage rates.

The critical detail for understanding Year 1-2 economics: you’re mining through lower-grade oxidised material to access the higher-grade sulphide core at depth.

Year 1 averages 1.05% copper, Year 2 improves to 1.24% copper, but you won’t hit the really good grades (1.36-1.86% copper) until Years 3-5.

That grade progression is why the first two years have modest margins compared to what comes later, and it’s also why capturing 100% ownership plus tax shields during these years creates such significant value — you’re converting the weakest production years into windfall cash generation.

An important operational advantage of the accelerated timeline: every two years of production delivers enough pre-stripping to pick up an additional year of mined ore for Year 3 and beyond.

This means the waste removal conducted in Years 1-2 not only accesses the immediate ore but also exposes ore zones that will be mined in Year 3, effectively front-loading the capital efficiency of the operation.

Additionally, Bezant could choose to pay contractors a retainer to remain on standby during any operational pauses, which reduces future operating costs by maintaining crew continuity, equipment readiness and avoiding remobilisation expenses.

This operational flexibility is a significant advantage in managing cash flow and maintaining production momentum.

The Processing Infrastructure: Why Economics Work

The reason this project generates serious returns is the NLZM plant acquisition. Instead of spending $50-100 million building greenfield processing infrastructure with a 2-3 year construction timeline, Bezant is acquiring 90% of Namib Lead and Zinc Mining for $2.5 million upfront plus production-based royalties.

The facility — a 180,000 tonne per annum flotation plant sitting 190 kilometres from the mine site near Swakopmund — was built in 2018 by North River Resources, never reached full capacity, and has been on care and maintenance since.

MetalX engineered the conversion from lead-zinc to copper processing at $2.8 million. Add the crushing plant ($1.47 million), Steinert ore sorter ($1.07 million), site infrastructure ($1.25 million), and mining establishment ($1.38 million), and total project capital hits $12.8 million.

Bezant’s share at 70% ownership: $8.96 million.

At 100% ownership: $12.8 million.

That capital efficiency is what makes the first two years work economically. You’re not servicing $80 million in debt or carrying depreciation on a massive greenfield build. You’re running a plant that somebody else paid for, converting it for pocket change, and capturing operating margins from Day 1.

The ore sorter changes haulage economics as well. Steinert’s pilot test work on Hope drill core showed 45% mass yield to concentrate with 85% copper recovery. That means you crush to -40mm at the mine site, screen at 17mm (fines bypass directly to the plant), run the coarse fraction through X-ray transmission sorting, and reject 55% of the mass while only losing 15% of the copper.

Critically, the chrysocolla oxide mineral — a hydrated copper silicate that responds poorly to flotation — never makes it to the ore sorter. This problematic oxide is identified during mining and grade control, then parked in designated tailings or stockpile areas.

This material can be extracted later if economics warrant, and if the oxide-to-sulphide ratio trends unfavorably, Bezant has the option to park oxide material entirely and pursue VAT (vat leaching) processing as an alternative recovery method.

This operational flexibility allows the company to optimise metallurgical performance by focusing flotation processing on sulphide-rich material where recoveries are highest, while preserving optionality on oxide treatment.

Instead of trucking 180,000 tonnes per year 190 kilometers to NLZM, you’re trucking roughly 100,000 tonnes of concentrate plus 45,000 tonnes of fines. Haulage costs drop by nearly half.

The metallurgy is straightforward for the sulphide material being processed. SGS bulk modal analysis showed copper mineralogy in the sulphide fraction breaks down roughly 40% fast-floating species (chalcopyrite, bornite), 13% medium-floating species (copper silicates), and 14% slow-floating species (atacamite). Since chrysocolla is removed before processing, the flotation circuit focuses on material that responds well to conventional flotation methods.

The test work confirmed strong performance on sulphide material - sulphide rougher recovery hit 91.8% in laboratory conditions with optimised reagent dosing, grind size at 80% passing 106 microns, and careful pH control. Combined recovery on the material actually sent to the plant should consistently exceed 90% given the pre-screening of problematic oxides.

That being said…

Base Case Scenario: 70% Ownership, Full Taxes

The base case reflects the current deal structure: Bezant owns 70% of the Hope and Gorob Mining joint venture, with a 30% partner who contributes proportionate costs and receives proportionate revenues. Taxes apply at Namibia’s 37.5% corporate rate from Day 1 of production.

Year 1: Ramp-Up and Commissioning

Mining starts at Hope with a target of 431,000 tonnes of ore at 1.05% copper grade. That’s not a typo — you’re mining lower-grade near-surface oxide material first because you need to strip overburden to access the higher-grade core, and you want to generate some cash flow while you’re doing it.

With an average strip ratio of 9:1 across the first two years, Year 1 involves moving approximately 3.9 million tonnes of waste alongside the ore extraction. Total material movement: roughly 4.3 million tonnes in Year 1.

That’s serious dirt moving for a first year — call it 360,000 tonnes per month average, which requires a fleet of 6-8 haul trucks cycling continuously plus excavators and drills running extended shifts.

The ore gets trucked to the on-site crushing plant where it’s crushed to -40mm and screened at 17mm. The +17mm fraction (about 75% of total mass) goes through the Steinert XRT sorter, which rejects 55% of the mass and concentrates the copper into 45% of the feed.

The -17mm fines (which average 2.76% copper due to preferential breakage of friable chalcocite) bypass the sorter and go directly into trucks. Total material trucked to NLZM: roughly 145,000 tonnes— 80,000 tonnes of sorter concentrate plus 65,000 tonnes of fines.

Give or take.

At NLZM, the material goes through conventional flotation: grinding to 80% passing 106 microns, sulphide rougher flotation with xanthate collector and frother, cleaning stages to upgrade concentrate to 26.7% copper, and final dewatering through thickeners and belt filters.

Power consumption runs 1,419 kW, reagent costs are $2.08 per tonne processed (ZAR38.82 at an exchange rate of USD1 = ZAR18.6), and labor carries 66 employees including mill operators, maintenance crews, lab technicians, engineers, and administration.

The output: approximately 4,500 tonnes of contained copper (Bezant’s 70% share: 3,150 tonnes), 97.5 kilograms of gold (3,137 ounces; Bezant 70%: 2,196 oz), and 1,447 kilograms of silver (46,507 ounces; Bezant 70%: 32,555 oz).

At current metal prices — copper $11,165 per tonne, gold $4,180 per ounce, silver $53 per ounce — and after applying smelter payabilities (85% on copper with zero deduction because grade is high, 90% on gold with 0.5 g/t deduction, 100% on silver with 15 g/t deduction), Bezant’s 70% revenue hits $38 million.

Operating costs in Year 1 run $15.78 million for Bezant’s 70% share.

That’s everything: contract mining costs quoted by Unitrans (drilling, blasting, loading, hauling, grade control), crushing and ore sorting operations (power, maintenance, operator labor), trucking 190 kilometers to NLZM, plant processing costs ($17.60 per tonne or $3.17 million annually for 180,000 tpa throughput), site overhead, environmental monitoring, community relations, corporate G&A allocation.

At $54 per tonne of run-of-mine ore, the cost structure is competitive for a small African copper operation, though it’s not spectacular. You’re moving a significant amount of waste relative to ore in Year 1, which drives up the unit cost, though the 9:1 average strip ratio keeps this manageable.

Capital depreciation and minor sustaining capex take another bite —call it $2 million in Year 1 as you’re depreciating the $8.96 million upfront capital over the mine life and spending a bit on equipment maintenance and minor upgrades.

EBITDA (earnings before interest, tax, depreciation, amortization): $22.22 million. Subtract depreciation, and you’re at $20.22 million EBIT (earnings before interest and tax).

Taxes hit hard: 37.5% of $20.22 million is $7.58 million, though you get some deductions for exploration and development expenditure written off in the first year of production.

Net tax liability: approximately $6.38 million leaving -

Year 1 Net Profit: $13.84 million

Think about what that means. Bezant invested $8.96 million in upfront capital. In the first 12 months of commercial production—while still ramping up operations, commissioning the plant, and working through teething issues — they generate $13.84 million in profit.

That’s a 154% return in Year 1 alone, recovering 100% of invested capital plus $4.88 million extra. The payback period is somewhere around 7-8 months from first production, assuming relatively smooth ramp-up.

But Year 1 isn’t smooth. It never is. You’re mobilising contractors, getting the ore sorter dialed in (sensor calibration, belt speed optimisation, reject threshold settings), commissioning flotation circuits that have never run copper, training operators who’ve never processed this specific ore body, and dealing with whatever surprises the geology throws at you.

If metallurgical recovery comes in at 85% instead of 90% for the first six months while you optimise, you lose maybe $1-1.5 million in revenue.

If mining productivity is 80% of planned in Q1-Q2 while contractors get established, your costs run 10-15% higher. Real-world Year 1 profit might be $11-12 million instead of $13.84 million. Still excellent, and still recovers capital, but the feasibility study number assumes relatively smooth execution.

In my experience, it’s better to build in a margin of error, and be happily surprised if all goes to plan.

Year 2: Full Production and Grade Improvement

Year 2 is where operations hit stride. Mining steps up to 486,000 tonnes at 1.24% copper — 18% higher grade than Year 1 as you get past the oxide cap and into fresher sulphide material.

The strip ratio continues to average around 9:1 as the pit design maintains efficient waste-to-ore ratios while executing deeper cuts to expose the core of the deposit.

Total material movement: approximately 4.9 million tonnes in Year 2, reflecting both higher ore production and ongoing waste stripping.

That means fleet expansion — you’re probably running 10-12 haul trucks now, with multiple excavators working simultaneously, and continuous drilling and blasting to keep ROM stockpiles ahead of the crusher.

The crushing and ore sorting plant is operating at nameplate capacity: 50 tonnes per hour through the primary jaw, secondary cone crusher handling the -40mm from Hope, screens separating at 17mm, and the Steinert sorter rejecting waste at 45% mass yield.

You’re trucking roughly 160,000 tonnes to NLZM — 90,000 tonnes of concentrate plus 70,000 tonnes of fines.

NLZM is processing the full 180,000 tpa now. Metallurgical recovery should be stabilising around design parameters: 92% on sulphides, with oxide material having been identified and parked rather than processed.

Plant availability is hitting 85-90% as you’ve worked through the commissioning issues from Year 1. Reagent consumption is optimised at $2.08 per tonne. Grind size is dialed in.

The operation is running the way it’s supposed to.

Production output: approximately 6,000 tonnes contained copper (Bezant 70%: 4,200 tonnes), 108.8 kg gold (3,500 oz; Bezant 70%: 2,450 oz), and 2,220 kg silver (71,400 oz; Bezant 70%: 49,980 oz). At current metal prices and payabilities,

Bezant’s 70% share of revenue: $45 million. That’s an 18% increase from Year 1, driven almost entirely by higher copper grade and throughput.

Operating costs rise proportionally to $18.79 million because you’re moving more total material and processing more ore through the plant. The unit cost per tonne of ore actually drops slightly to about $52/t because you’re spreading fixed costs (site overhead, G&A, some equipment costs) over higher tonnage. This is the operating leverage starting to show up — once you’ve got the operation established, incremental tonnes are cheaper than the initial ramp-up tonnes.

Capital depreciation and sustaining capex: roughly $2.2 million as you continue depreciating the upfront capital and spend a bit more on sustaining work (equipment rebuilds, facility maintenance, minor upgrades).

EBITDA: $26.21 million. EBIT after depreciation: $23.99 million.

Taxes at 37.5%: $9.00 million. With some deductions and adjustments, net tax liability lands around $7.68 million.

Year 2 Net Profit: $16.31 million

Now you’re printing money. You recovered your entire capital investment in Year 1, and Year 2 drops $16.31 million straight to the bottom line.

Cumulative profit through two years: $30.15 million.

That’s a 3.37x return on the $8.96 million capital in just 24 months of operations. The IRR through Year 2 alone is running north of 150%.

But remember the context: these are the lowest-grade years of the mine plan. Year 3 hits 1.36% copper, Year 4 runs 1.33%, and Year 5 reaches 1.86% as you mine out the high-grade footwall contact. You haven’t even gotten to the good stuff yet, and you’ve already tripled your money.

The cash flow profile in the base case looks like this: negative $9 million at end of construction (Year 0), positive $13.84 million in Year 1, positive $16.31 million in Year 2.

By month 20 of commercial production, you’ve recovered capital and banked $20.3 million in cumulative profit. That cash can fund the Year 3 pushback (where strip ratios remain manageable but you’re moving more total material), cover any working capital needs, and provide buffer for operational variability or metal price volatility.

The base case is solid. It works.

But it’s leaving significant value on the table if Bezant can restructure the deal.

Bull Case Scenario: 100% Ownership, Tax Loss Carryforward

Now let’s run the numbers if two things change: Bezant takes 100% of the project instead of 70%, and historical tax losses offset any tax liability for the first two years of production.

The ownership structure change is straightforward — instead of splitting revenues and costs 70/30 with a partner, Bezant captures 100% of project economics. The tax loss carryforward is more interesting.

The exploration losses that came with years of drilling don’t disappear — they can be carried forward and applied against future taxable income, subject to Namibian tax law limitations.

If those historical losses are large enough to cover the first two years of tax liability (roughly $14 million cumulative), Bezant effectively operates tax-free in Years 1-2 while the copper operation is generating profit but the entity-level accumulated losses are being utilised.

This is standard tax optimisation in mining acquisitions. The question is whether Bezant’s loss carryforward is actually large enough to cover two years of Hope and Gorob production, and whether Namibian tax authorities will allow the offset. That requires detailed tax due diligence, but for this scenario, let’s assume it works.

Year 1: 100% Economics, Zero Tax

Mining and processing operations are identical to the base case—same 431,000 tonnes at 1.05% copper, same strip ratio, same metallurgy, same plant throughput. The difference is purely financial: who captures the value and how much tax gets paid.

Production: 6,450 tonnes contained copper (100% vs 4,500 tonnes at 70%), 139 kg gold (4,467 oz vs 3,127 oz at 70%), 2,067 kg silver (66,440 oz vs 46,508 oz at 70%).

At current metal prices and payabilities, total revenue: $54.3 million. That’s 43% higher than the $38 million base case, reflecting the incremental 30% ownership.

Operating costs: $22.54 million for 100% of project costs versus $15.78 million for 70%. You’re covering all the contract mining, all the crushing and sorting, all the trucking, all the NLZM processing costs, all the site overhead. No partner to split costs with.

Capital depreciation and sustaining capex: $2.9 million, reflecting 100% of the $12.8 million upfront capital being depreciated plus full sustaining spend.

EBITDA: $31.76 million. EBIT: $28.86 million.

Normally, you’d owe 37.5% of $28.86 million in corporate taxes —about $10.82 million. But the loss carryforward offsets the entire amount. Tax liability: $0.

Year 1 Net Profit: $28.86 million

Compare that to $13.84 million in the base case. You’re generating 2.08x the profit in Year 1 purely from deal structure optimisation.

The incremental 30% ownership adds $6.88 million (43% more revenue minus 43% more costs), and the tax shield adds another $10.82 million. Together, that’s $17.70 million of additional Year 1 profit—a 128% improvement.

From a capital recovery perspective, you’re recovering the full $12.8 million upfront capital in less than 6 months of commercial production. By month 8, you’ve banked $15+ million in profit above your initial investment.

That’s venture capital-style returns on a mining project, which just doesn’t happen often.

The cash flow implications are significant. Instead of recovering capital and banking $4.88 million by end of Year 1, you’re sitting on $16.06 million in cash above invested capital.

That money can fund Year 3 pre-stripping (where you’re continuing to expose higher-grade ore zones), finance working capital needs (concentrate in circuit, spare parts inventory, receivables), maintain contractor standby capacity to reduce future operating costs, and provide a substantial buffer against operational issues or metal price weakness.

Year 2: Continuing the Momentum

Year 2 operations remain identical to base case — 486,000 tonnes at 1.24% copper, 9:1 average strip ratio, full plant capacity, metallurgical recovery stabilising at design parameters.

Production: 8,580 tonnes contained copper (100% vs 6,000t at 70%), 155 kg gold (4,984 oz vs 3,489 oz at 70%), 3,171 kg silver (101,956 oz vs 71,369 oz at 70%).

Revenue: $64.3 million versus $45 million in the base case — same 43% uplift from full ownership.

Operating costs: $26.84 million (100% of project costs) versus $18.79 million (70%). You’re moving approximately 4.9 million tonnes total material, processing 180,000 tpa at NLZM, and covering all site-level costs.

Capital depreciation and sustaining: $3.1 million.

EBITDA: $37.46 million. EBIT: $34.36 million.

Tax shield from loss carryforward offsets the $12.88 million that would normally be owed.

Tax liability: $0.

Year 2 Net Profit: $34.36 million

That compares to $16.31 million in the base case — a 2.11x improvement, same multiplier as Year 1. The incremental ownership adds $7.84 million, the tax shield adds $10.21 million, and together you’re generating $18.05 million more profit in Year 2 relative to the base case.

Cumulative through Year 2: $63.22 million in profit on $12.8 million invested capital.

That’s a 4.94x return in 24 months — a 150% annualised IRR through the first two production years.

Cumulative Comparison: Base vs Bull

Here’s where the scenarios diverge dramatically:

Base Case (70% ownership, full tax):

Year 1: $13.84M profit

Year 2: $16.31M profit

Cumulative: $30.15M profit

Multiple on $8.96M invested: 3.37x

Capital recovered: Month 7-8

Bull Case (100% ownership, tax shield):

Year 1: $28.86M profit

Year 2: $34.36M profit

Cumulative: $63.22M profit

Multiple on $12.8M invested: 4.94x

Capital recovered: Month 5-6

The difference is therefore $33.07 million in additional profit over the first 24 months. That’s transformational capital that changes the risk profile of the entire project.

Think about what $33 million in incremental cash does strategically.

The Year 3 operations at Hope continue to benefit from the pre-stripping conducted in Years 1-2. Remember, every two years of mining picks up an additional year of exposed ore for Year 3, meaning the waste removal costs are effectively front-loaded and Year 3 operates at lower incremental cost. That waste movement is expensive, but in the bull case, you’re funding it entirely from internal cash generation with tens of millions left over. The ability to pay contractors to remain on standby during any operational pauses further reduces Year 3 operating costs by avoiding remobilisation expenses and maintaining crew efficiency.

The other strategic implication: exploration and resource expansion. The Matchless Belt extends for hundreds of kilometres with at least 18 known copper deposits. The Hope deposit has endless copper to be discovered.

In the base case, you’re focused on execution and capital preservation — exploration is a nice-to-have if extra cash materializes. In the bull case, you can fund a $2-3 million drill program in Year 2 from operating cash flow without affecting the balance sheet.

That creates optionality to extend mine life and prove up additional resources while the operation is demonstrating successful production. Banks and investors care about that — a proven producer with resource expansion potential trades at a very different valuation than a single-asset mine with no growth profile.

Metallurgicals

Both scenarios assume the metallurgical performance hits design parameters: 92% recovery on sulphides, with problematic chrysocolla oxide material identified and parked rather than processed. The ore sorting delivers 45% mass yield at 85% copper recovery. That’s the core assumption underpinning the revenue projections, and it’s worth analysing because pilot test work doesn’t always translate to commercial scale.

The Steinert ore sorter test work crushed to -40mm, screened at 17mm, and ran three sensor settings. Results showed 45% mass yield with 85% copper recovery using induction sensors.

Steinert later reprocessed the data using XRT sensors (which weren’t used for product selection in the initial test) and found that 88% of misplaced copper in the reject stream could be identified and recovered by switching to XRT. That suggests upside —the current study is using induction sensor results, but XRT could improve recovery to 88-90% while maintaining 45% mass yield.

Not priced in, but it’s on the table.

The flotation recovery is more straightforward now that chrysocolla is removed before processing. SGS did bench-scale test work showing 91.8% sulphide recovery in laboratory conditions with optimised reagent dosing (at $2.08 per tonne, or ZAR38.82 at USD1 = ZAR18.6), grind size at 80% passing 106 microns, and careful pH control.

Translating that to a full-scale plant processing 180,000 tpa — especially a converted plant that’s never run copper — introduces variability, but the removal of problematic oxide material significantly improves the reliability of achieving design parameters.

First six months of production might see 85% sulphide recovery while operators learn the ore behavior, optimize dosing rates, and dial in the grind.

If recovery in Year 1 averages 87% overall (versus modelled 90%), you lose about 3% of copper to tailings. On 4,500 tonnes contained copper (100% basis), that’s 135 tonnes lost worth $1.5 million. Across 70% ownership, that’s $1.05 million revenue hit. Across 100% ownership, $1.5 million hit.

By Year 2, recoveries should be stabilising closer to design as the plant team gains experience. With oxide material properly segregated, achieving 90%+ recovery on the sulphide-rich material being processed becomes more achievable.

Call it $0.8 million at 70% ownership, $1.2 million at 100% ownership if there’s still some underperformance.

Total metallurgical risk across Years 1-2: maybe $1.8-2.0 million in the base case, $2.5-2.7 million in the bull case.

Significant but not too significant.

The base case Year 1-2 cumulative profit drops from $30.15M to $28.15-28.35M if recoveries underperform. Bull case drops from $63.22M to $60.52-60.72M.

You’re still generating excellent returns — the bull case with metallurgical headwinds still outperforms the base case with perfect metallurgy.

The hedge here is the XRT ore sorting upside. If Steinert’s reprocessed data is correct and XRT can recover 88% of copper at similar mass yields, you pick up 3-4% incremental recovery at the sorter.

That’s worth $1.5-$2 million per year, roughly offsetting the flotation recovery shortfall. So the net effect might be close to neutral if you optimize sorting while learning flotation.

Strip Ratio Sensitivity

The other assumption worth stress-testing is strip ratio. The design uses an average of 9:1 across the first two years, based on Sound Mining International’s pit optimisation using preliminary geotechnical parameters. This represents an improvement over earlier study assumptions and reflects the decision to pursue open pit rather than underground mining.

The study explicitly notes that actual slope angles need to be validated through geotechnical drilling during construction —they’re using assumed slopes based on similar deposits in the Matchless Belt, but haven’t drilled specifically for rock mass characterization.

Metamorphic rocks like the schist and amphibolite at Hope tend to be foliated and jointed. That typically means flatter slopes than you’d design for competent igneous rock. If geotechnical work determines you need 42-degree slopes instead of 45-degree slopes, the strip ratio increases. Not dramatically — maybe 5-10% more waste — but enough to matter at the margin.

A 10% increase in waste movement in Year 1 means roughly 390,000 additional tonnes moved. At $3-4 per tonne mining cost, that’s $1.2-1.6 million in extra costs. Across 70% ownership, call it $0.8-1.1M cost increase.

Year 2 is similarly sensitive. A 10% increase is approximately 440,000 tonnes extra, costing $1.3-1.8 million. At 70%: $0.9-1.3M.

Cumulative strip ratio risk across Years 1-2: $1.7-2.4M in the base case, $2.5-3.4M in the bull case if slopes need to be flattened 10%. That would cut base case profit from $29.9M to $27.5-28.2M, and bull case from $62.6M to $59.2-60.1M.

Combined with metallurgical risk, you could see $3.5-4.5M of headwinds in the base case (cumulative profit $25.4-26.4M) and $5-6M in the bull case (cumulative profit $56.6-57.6M). The returns are again still excellent — the bull case with everything going slightly wrong still generates 4.4-4.5x on capital versus 2.8-2.9x in the base case with things going slightly wrong.

The larger point: these numbers have cushion. Even if you’re sceptical about assumed recoveries and strip ratios, the order-of-magnitude returns hold up.

The bull case could underperform by 15% and still generate 4x+ returns in two years. The base case could underperform by 15% and still return 2.8x capital in 24 months. That’s the margin of safety created by low capital intensity ($12.8M project capex), strong metal prices (copper 20% above feasibility study assumptions) and reasonable cost structure ($55/t operating cost).

Capital Structure

The implicit question underlying this entire analysis: can Bezant actually restructure the deal to capture 100% ownership and utilise their tax losses?

The 100% ownership piece depends on negotiating with the current 30% partner. Maybe that partner lacks capital to fund their share of development costs and would sell their stake at a reasonable price. Maybe they’re content with NSR (net smelter royalty) rather than equity ownership. Maybe Bezant issues equity to buy them out pre-production.

The tax loss carryforward requires legal and tax structuring to ensure accumulated losses can be applied against copper production income. Namibian tax law allows loss carryforwards for mining companies, but there are often restrictions on change-of-control transactions or limitations on using pre-acquisition losses against post-acquisition income.

That requires detailed tax due diligence with Namibian counsel and engagement with tax authorities to confirm the treatment. It’s not automatic.

If both elements come together — 100% ownership and tax shield utilisation — the bull case is very real. If only one element materialises (say, 100% ownership but full taxes), you’d get a scenario somewhere between base and bull: maybe $45-48M cumulative profit over Years 1-2, roughly 3.5-3.8x on capital.

Still substantially better than the base case.

If neither element materialises, you’re back to base case economics: $29.9M profit over two years, 3.3x return.

That’s still good. The base case isn’t a bad outcome — it’s just leaving money on the table if restructuring is possible.

Timing and Execution Path

Both scenarios assume the same development timeline: operations commence in April/May 2026 with first copper production by Q4 2026. This accelerated timeline is achievable because the NLZM plant already exists and requires only conversion rather than greenfield construction. The plant conversion, crushing circuit installation, and ore sorter commissioning can proceed in parallel with mine development and contractor mobilisation.

Commissioning typically takes 3-6 months to achieve nameplate capacity in flotation plants. The study assumes relatively smooth commissioning, but converted plants usually take 6-9 months to hit 90%+ nameplate.

Add 2-4 months of slippage risk to the timeline.

Total realistic scenario: First true commercial production rates achieved by Q1 2027. That delays cash flows by one quarter but doesn’t change the magnitude of returns —you’re still making the same profit per tonne produced, just on a slightly pushed-out timeline.

The other execution risk is capital cost overrun. The $12.8 million project capex assumes fixed-price contracts for major equipment (Steinert sorter, crushing plant, MetalX EPC conversion) and quoted pricing from Unitrans for mining establishment.

There’s a 5% contingency ($640k) built in, but that’s thin coverage. Typical mining capex runs 15-25% over budget due to scope creep, currency fluctuations, unforeseen site conditions and schedule delays that extend indirect costs (overhead, supervision, financing).

If capex overruns 20%, you’re at $15.4M instead of $12.8M — an extra $2.6M. In the base case at 70% ownership, Bezant’s share increases from $8.96M to $10.8M. In the bull case at 100%, from $12.8M to $15.4M.

What Actually Matters in Years 1-2

Strip away all the financial engineering and tax optimisation, and what matters in the first two years is simple: can the operation produce copper at the assumed grades and recoveries, at the assumed costs, without major incidents?

The mine needs to move approximately 4.3 million tonnes in Year 1 and 4.9 million tonnes in Year 2 safely and efficiently. That means equipment availability above 85%, contractor performance hitting productivity targets, no major geotechnical failures or slope instabilities, and blast fragmentation that delivers properly sized feed to the crusher.

If any of those elements underperforms—availability drops to 75%, productivity runs 15% low, you get a slope failure that costs two months of downtime — costs rise and throughput drops.

The ore sorter needs to deliver 45% mass yield at 85% copper recovery consistently. That means sensor calibration holding stable, belt speed optimised for the specific ore characteristics, reject and accept streams reporting to the right destinations without cross-contamination, and maintenance keeping the unit running at 90%+ availability.

Sorting technology is proven, but it’s not foolproof. Sensor drift, belt wear, and material buildup can all degrade performance if not actively managed.

The NLZM plant needs to achieve design recovery: 92% on sulphides. That requires grind size control (maintaining 80% passing 106 microns despite ore hardness variability), reagent dosing optimization (xanthate collector and frother for sulphides at $2.08 per tonne total reagent cost—ZAR38.82 at USD1 = ZAR18.6—lime for pH control), flotation kinetics that allow proper residence time for slow-floating species, and concentrate cleaning stages that upgrade to 26.7% copper without excessive losses.

Every 1% recovery shortfall costs $1.1-1.2 million annually in lost revenue (100% basis), so metallurgical performance isn’t academic — it’s the difference between strong margins and mediocre margins.

The operational flexibility around chrysocolla management—being able to identify and park oxide material, with the option to pursue VAT leaching if needed—provides important downside protection. If oxide content trends higher than expected or flotation performance on mixed material proves challenging, the operation can adapt by focusing on sulphide-rich zones and preserving oxide material for future processing.

Those are the operational realities that determine whether you actually realize the $29.9M base case or $62.6M bull case profits.

The financial models assume competent execution. Mining rarely delivers perfect execution in the first two years. There’s almost always something — weather delays, equipment failures, metallurgical surprises, personnel turnover, supply chain disruptions, community issues, regulatory audits.

But the margin of safety in these scenarios suggests manageable headwinds are tolerable. The bull case can absorb $10-12M of adverse variance and still return 3x+ on capital. The base case can absorb $5-6M of variance and still double invested capital. That’s not bulletproof, but it’s very reasonable for a development-stage mining asset.

The Bottom Line

If you’re evaluating Bezant Resources’ Hope and Gorob project on a two-year view — either because you want quick payback before committing to longer-term exposure, or because you’re sceptical about Years 3-7 assumptions and want to see proof of concept — the first two years offer genuine value creation under both scenarios.

The base case — 70% ownership with full taxes — generates $29.9 million profit on $9 million invested capital over 24 months. That’s a 3.3x return, annualized IRR of about 135%, with capital recovered in months 7-8 of production.

For a junior mining development play, that’s exceptional.

The bull case — 100% ownership with tax loss carryforward—generates $62.6 million profit on $12.8 million capital over the same period. That’s a 4.9x return, annualised IRR around 149%, with capital recovered in months 5-6. The incremental $32.7 million over base case comes from capturing the extra 30% ownership ($14.6M) and eliminating $18.1M in taxes via loss carryforward.

Even the base case works very well. You don’t need the bull case to justify investment. The base case alone delivers returns that would make most mining investors happy. But if management can execute the restructuring — buying out the 30% partner and utilising tax losses — the returns move from ‘very good’ to ‘exceptional.’

The risks are standard development-stage mining risks: metallurgical performance, cost control, execution timeline, metal price volatility. None are exotic or unique to this project.

The mitigants are also standard: low capital intensity reduces financing risk, existing permits reduce regulatory risk, contracted mining costs reduce cost uncertainty, strong current metal prices provide margin cushion, and operational flexibility around oxide management provides downside protection.

The ability to maintain contractor readiness through standby arrangements and the pre-stripping benefit (every two years of mining exposing ore for Year 3) further improve its operational and financial flexibility.

The risk-reward profile is tilted favourably toward reward.

The numbers laid out here are what’s possible if those elements come together. Investors need to assess probability of execution and adjust position sizing accordingly. But the magnitude of potential returns in the first two years alone — before even considering Years 3-7 upside — makes this worth serious consideration for anyone looking at development-stage copper exposure.

Watch this space.