African Copper plc, the dual-listed copper mining outfit, paraded its first ever results after the most daunting recession in recent history but praised them as “more encouraging” as it looks forward towards the “ramping up” of production at Mowana Mine.
In its results signaling the first three since the re-opening of the mine and the twelve monthsÔÇö of audited period– to end of last December the company said it has seen an improvement in sales revenue from its first sale of copper concentrate.
Copper concentrate sold during the first three months represented 2.63 million British poundsÔÇö-about P 27.5 million ÔÇô leading to a net loss of 3.72 million pounds against the last corresponding period where net loss stood at 56.9 million.
Brad Kipp, Chief Financial Officer of African Copper, said, “This has been
an important period for African Copper and I am delighted with the progress we have made on all fronts in the fourth quarter after what was a testing time for the mining sector.
“We have recommenced operation at our flagship Mowana Mine and are making adjustments towards reaching full commercial production levels. We are also working on a mining license for Thakadu as well as seeking to unlock the potential of the Matsitama project with the right partner,” he said.
He further praised the financial performance of the company saying it is signaling a major improvement since the global economic crunch that greatly afflicted the mining sector on the African continent.
“On the financial side, we have started to produce revenues and our net loss has reduced substantially, a result of the reversal of heavy impairment losses recognized on the Mowana Mine property in 2008.
“This reversal reflects favourable changes in the underlying estimates of expected future cash flows.”
With the return of favourable copper prices, and a ramping up of production, we look forward to the next 12 months with genuine excitement,” he added.
Further, during the three months ended 31 December, 2009, African Copper made some major strides which management believes are important steps towards reaching full commercial production levels at its Mowana Mine.
Following the commencement of production in August 2009, the plant at the Mowana Mine produced 4,344 Mt of concentrate, at an average grade of 27.34 percent copper for 1,192 Mt of copper contained in concentrate up
to 31 December 2009.
The move has driven the company’s gross revenue up to 2.63 million pounds while incurring cash operating expenses of 4.34 million pounds.
Other important developments include the restructuring of the company’s short term financing replacing it with longer term ones in a bid to give it some breathing space.
Key to this is the $32.4 million of bridge loan facilities from Zambia Copper Investment.
The Company did not make any significant expenditure on its Matsitama project during the three months, but is actively reviewing work done on the project and considering its next steps.
Work is also being completed to secure a mining licence at Thakadu.
The budding miner, which is thirsty to push its brownish base metal through the throats of the marketsÔÇöon a five year off-take arrangementÔÇösaid it is currently engaged in an Environmental Impact Assessment ( EIA) study aimed at leap-frogging its aims of opening Thakadu Mine.
Thakadu is 70 kilometers south-west of Mowana mine, which is the bell weather of African Copper’s intended exploits in Botswana.
“We are in the process of doing EIA at the moment which I think will be complete in about two-and-half months,” Acting General Manager of Mowana mine, “ has said.
So far, Thakadu is the richest find within the basket of African Copper finds with 5 million tones copper resource at two percent compared to Mowana mine whose average copper grade is at 0.71 percent.
“The life-span of Thakadu open pit mine will be three years at 2.5 million tonnes,” he said, adding that there is an upside of going underground but emphasized that it will operate as a satellite mine.
Trucks will have to ferry the ore from Thakadu to the crushers which are based at Mowana mine.
If the Thakadu mine licence were approved by the authorities (Department of Mines) the move is likely to push African Copper to a point where it will be the pioneer of the northern copper belt in Botswana. Its concession area is closer to that of Discovery MetalsÔÇöan Australian base metal explorer with concession area, Dukwi, Maun and Selebi Phikwe areas.