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Af Copper seal deal with ZCI

Staff Writer
Zambia Copper Mining (ZCI) has entered into a new term loan facility agreement with African Copper (ACU) to refinance the existing bridging loan facilities it made to ACU subsidiary, Messina Copper.

The term loan facility of up to $31,3 million, the equivalent of P217 million, will put ACU's borrowings from ZCI onto a more permanent footing and it will be used by Messina to repay the bridging loan, the company said last Friday.

The new term loan facility would be done in two tranches, with tranche A providing an amount of $8,37 million, which was convertible into ordinary shares of one Pula each in ACU.

Tranche B of the term loan facility is for an amount of up to $22,7-million, and it is not convertible.

ZCI said that the term loan facility will only be effective when it is approved by its shareholders. The security over Messina's assets, including the Mowana mine, is now effective.

ZCI will now assist the ACU management to optimise the Mowana Mine operations and seek ways to expand the mining and processing capability beyond the 25,000 t/y envisaged in ACU's current five year plan.The approval of ZCI's shareholders is expected to occur in September and security is expected to become effective in July.

Under the subscription agreement, ZCI subscribed for more than 676,557 million new ordinary shares of 1p a share at a cost of 6.76 million, or $9.9-million.

ZCI reported that an application had been made for the admission of the new

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shares to trade on the Aim, which was expected to occur last week. The new shares would rank at an equal rate, with the existing ordinary shares in ACU.

Following the issue and allotment of the new shares, ACU now has an issued share capital of 823.4 million ordinary shares of 1p each. As such, the total number of voting rights that will be attached to the enlarged share capital, on the basis of one vote for each ordinary share held, will be 823.4 million.

ZCI has finalised a compromise agreement with Read, Swatman & Voigt (RSV), one of ACU's remaining large trade creditors, pursuant to which RSV has been paid in cash 50 percent of money owed directly to RSV and 100percent owed to RSV subcontractors, being a total of R3.7 million, or about $448,141.87 in full and final settlement of debts due from ACU.

With the RSV settlement, all ACU debts to large trade creditors have been settled in cash and, accordingly, no shares will be issued to trade creditors of the company.

African Copper first announced in January that Mowana Mine had been placed on care and maintenance pending the finalisation of negotiations to raise US$15 million or P120m it needs to stay afloat as copper prices continue to plummet.



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