Midnight Sun Shares Drop After Zambia Rejects Kazhiba License Renewal
Midnight Sun Mining Corp. (TSXV: MMA) saw its shares drop sharply late Thursday following the Zambian government’s rejection of its application to renew the exploration license for the Kazhiba target, part of its flagship Solwezi project.
Kazhiba is one of three key targets within Midnight Sun’s 506 km² property in Zambia, which has already yielded significant copper discoveries.
The area is underlain by a previously undiscovered basement dome similar to those found at First Quantum’s Kansanshi mine, a major copper producer in the region.
These basement domes are believed to be linked to copper mineralization at nearby mines, including Kansanshi, Sentinel (both operated by First Quantum), and Barrick’s Lumwana mine.
Kazhiba’s 22 Zone, located just 10 kilometers from Kansanshi’s western gate, was identified in 2012 through shallow drilling that followed up on a subtle copper anomaly. One of the discovery holes intersected 11.3 meters of 5.71% copper near the surface.
This year, Midnight Sun planned to further explore Kazhiba to define its copper oxide resources, with potential to supply ore to the nearby Kansanshi mine under a cooperative exploration agreement with First Quantum.
The company had submitted an application for the final three-year renewal of the Kazhiba license as per Zambian mining regulations.
However, the Zambian mining licensing committee rejected the application in June without issuing a formal notice to Midnight Sun. Instead, the decision was posted on the committee’s website.
Midnight Sun claims that the ministry did not provide any explanation for the rejection and subsequently issued the license area to a new entity.
As a result, Midnight Sun has suspended operations at Kazhiba but is exploring legal options to defend its exploration rights. “While we are disappointed with the current situation, we believe it will be rectified.
We are taking all possible steps to expedite a swift resolution so we can resume our exploration at Kazhiba,” said Midnight Sun’s CEO, Al Fabbro.
Despite the setback at Kazhiba, Midnight Sun emphasized that its other two licenses—covering the Dumbwa target, under an earn-in agreement with KoBold Metals, and the Kansanshi-style Mitu target, part of the cooperative exploration plan with First Quantum—remain unaffected.
Exploration will proceed as planned at Mitu, which has shown promising results, including an 11.6-meter drill intercept at 3.44% copper.
Following the news, Midnight Sun Mining’s shares dropped 11.2% by market close on Thursday, leaving the company with a market capitalization of C$58.7 million ($43.5 million).
SOURCE:mining.com
