African Copper bullish about second licence

Staff Writer | Tuesday December 7, 2010 00:00

 

In a statement accompanying its half-year results for the period ended September 30, African Copper - which operates Mowana Mine in eastern Botswana - says it believes the company will be issued with a licence before the end of this year.

African Copper, which is majority-owned by JSE-listed ZCI, started trial mining at the copper/silver deposit after receiving environmental approval earlier this year.

The Thakadu deposit is expected to share infrastructure with the company's flagship open pit Mowana Mine, giving it an anticipated short lead time to profitable production.

Meanwhile, the company recorded a 'sound increase' in its copper production to 1, 790 tonnes, with August seeing the highest-ever production levels of 561 tonnes and company record recovery levels of 68 percent against a target of 53 percent.

Acting CEO Jordan Soko says Mowana's September copper production dropped to 363 tonnes as a result of the processing of high-grade but highly oxidised Thakadu ore.

'This was a challenging period at the plant as highly oxidised near-surface Thakadu ore required a different plant set-up and settings while the processing characteristics of this ore were being understood,' Soko says.

Recoveries on Thakadu ore are expected to increase significantly with depth once the oxide ore was exhausted and the company starts processing the sulphide ore that underlies this oxide ore 30 metres below the surface.

Soko attributes the company's higher overall output in the half-year to the infrastructure improvements implemented at Mowana Mine that reduced production bottlenecks.

Production levels were expected to improve further and levels achieved during the forthcoming rain season should be significantly better than last year as a result of investments already made.

Last week, the company announced it had secured a further loan of P50 million from majority shareholder ZCI for exploration drilling on the Matsitama exploration project and Mowana North deposit and completion of a scoping study for the Makala deposits as well as Mowana plant enhancements.

'African Copper now has an exciting mix of production, near-production and exploration assets on the highly prospective Matsitama base, which we look forward to developing further in the future,' the company says in the statement accompanying the results.

African Copper, which is also listed on AIM, reports an interim revenue of $8,1 million, an increase from the previous period, owing to production only commencing at the Mowana Mine in late August 2009 and no concentrate being sold in September 2009.

It has also recorded a net cash outflow from operating activities of $3,8 million, compared with $14,7-million in 2009. A capital investment of $3,4 million relates to additions to Mowana property plant and equipment.

Soko points out that African Copper had made transformational strides over the past six months, but that it is likely to require additional working capital in the next 12 months.

However, the requirement would be at a level that could be financed by providers of finance. Its subsidiary, Messina, has already started discussions with finance providers in Botswana regarding a working capital credit facility.