African Copper continues loss making streak

Keikantse Lesemela | Tuesday January 6, 2015 11:59

Commenting on the recently published financial results, African Copper Acting Chief Executive Officer and Director, Jordan Soko said the company continues to require the support of its parent company and principal shareholder ZCI Limited.

“ZCI has agreed to defer all principal and interest payments arising from the company’s debt obligations until 31 December 2015 and has confirmed it will continue to make sufficient financial resources available to African Copper up to a maximum of $7million to allow it to meet its liabilities in the course of normal operations,” said Soko.

The average copper produced in concentrate for the period amounted to 946 tonnes per month, with the highest and lowest levels yielding 1,303 tonnes and 407 tonnes. The revenues increased by about four percent to $30.8 million.

However, the copper produced in concentrate for the period increased to 5,679 million tones, which is 15 percent higher than the corresponding period from last year, owing primarily to a 25 percent increase in recoveries.

Soko said the operating income from mining operations stood at $4 million, a decrease of 39 percent from $6.5 million for the corresponding period last year, driven primarily by increased mining and transport activities at Thakadu, in an effort to make good on previous shortfalls in mining and drilling activity.

“The acceleration in mining cost reflects our success, working with our new mining contractor, in addressing and turning around the low delivery rate of Thakadu ore we experienced under the previous contractor,” he noted.

Soko further explained that subsequent to the period end, the group had been impacted by working capital shortages due to a backlog in required Thakadu waste stripping and lower than planned production levels during October and November, namely 972 tonnes and 607 tonnes copper produced in concentrate respectively.

Consequently, the group requested financial support from ZCI in December 2014 to the value of $2.5 million in order to fund the waste stripping required to manage the transition from the Thakadu pit to the Mowana pit. The Group entered into a $2.5 million term facility agreement with ZCI in December 2014.

He said they were able to report improvements during this six-month period in the key operating measures. “However our mining and transport costs increased during the period as we needed to accelerate mining activities at Thakadu to make up previous shortfalls in mining and drilling activity. Nevertheless, we were pleased with our ability to work with our new mining contractor in turning around the low delivery rate of Thakadu ore that we experienced under the previous contractor,” Soko said. He added that this greatly enhanced their strategic position, as the company was moving mining operations back to the larger Mowana open pit.