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Africa: African Copper Heads for First Production
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Mmegi/The Reporter (Gaborone)
4 April 2008
Posted to the web 7 April 2008
Gaborone
Emerging copper firm African Copper, which hopes to produce the first concentrate at its flagship mine in Botswana next month, will publish plans for underground mining at the operation in the coming weeks, CEO Joseph Hamilton said on Tuesday.
The mine, formerly known as the Dukwe project, was renamed Mowana last year, the local word for the Baobab tree which stands near the entrance to the property. "Production is imminent and construction is over 90% complete at this point," Hamilton said on a conference call with analysts. The company, which received a 25-year mining licence for the operation in December last year, expects to pour the first concentrate at Mowana within the next three months, and hopes to achieve commercial production in the third quarter.
The company expects to produce around 5 500 t of copper this year, but will ramp up to output of some 29 000 t/y in 2012. It currently has over 200 000 t of ore on stockpile.
African Copper, which trades on the Aim, TSX and Botswana Stock Exchange, earlier this year inked a five-year off-take agreement for metal produced at Mowana with Switzerland-based MRI Trading.
The Mowana openpit is expected to produce until 2015, but the company is currently studying plans to develop an underground mine on the property. "The longevity of the Mowana mine will likely come from the extraction of the significant underground sulphide resource," Hamilton commented.
The firm completed dense-media separation testing last year, which confirmed the viability of bulk-mining methods, and was currently reviewing the results and finalising design work for underground mining at Mowana. It completed a scoping study in December last year on an underground mine, and expects to publish a revised feasibility study by the end of this month.
The project, which would take about 24 months to complete, is expected to cost between $50-million and $60-million, in line with previous estimates, Hamilton said.
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Shares in African Copper rose 5,26 percent in Toronto on Tuesday, to C$1,00 a share.
The company recently raised Pula 150 million through the floatation of a bond. Messina Copper (Botswana) (Pty) Ltd ("Messina"), African Copper's 100 percent owned subsidiary, received binding subscription agreements as part of a Pula 200 million Botswana Note Programme for Pula 150 million notes from local Botswana institutions (the "Botswana Bond"). The Botswana Bond is denominated in Pula and is an unsecured fixed rate note that bears interest at 14.0 percent per annum and has a bullet maturity in 7 years.
The Chairman of African Copper, Roy Corrans also said, "The Board is delighted with the support that we have received from Botswana based shareholders and investors throughout 2007 and into early 2008. The response and the financial support shown by Botswana institutions and the Botswana Stock Exchange have been unequalled. The Board remains confident that the Company development objectives are achievable in 2008 and believes that the share price will respond positively as we meet our corporate goals throughout the balance of 2008."
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