African Copper, the AIM/ BSE listed copper production and exploration company, said this week that, as a result of the more than doubling of ore processed year-on-year, the increases in grades and recovery and generally buoyant copper prices, its top line rose as shown in the results for the year ending March 2011.
The company, which is developing Mowana Copper Mine in Botswana, saw its revenues for the year rising to US$24.7 million (about P169.8 million). The performance was better than US$7.4 million (about P48.5 million) in the same period last year.
Its operating loss was also lower at US$2.3 million (about P15 million) compared to US$11.6 million (about P76 million) figure of last year.
Administrative expenses were cut to US$4.8 million (about P31.5 million) from US$7.9 million (about P51.8 million) in the prior period, reflecting expenses over a twelve month period compared to a fifteen month period and significant professional fees and other one-time costs incurred during the financial restructuring that was completed during 2009.
The company said after increased finance costs due to both the quantum and interest cost of borrowings being higher, loss before tax was US$9.0 million (about P58.9 million), compared to a profit of US$30.7 million (about P201 million) in the prior period, which included a US$46.0 million (about P301 million) reversal of prior period impairment charges.
Interim CEO of African Copper, Jordan Soko, said this year they will be looking at reducing costs and increasing throughput.
“There is no doubt that the upcoming year will be a pivotal time in our company’s development as many of the key initiatives at Mowana are implemented to maximise production and minimise costs,” Soko said.
“Our goal this year is to have the operations at Mowana and Thakadu reach sustainable profitability so we can start to leverage off the considerable assets we have in Botswana,” he added.
African Copper Chairman, David Rodier, said at Mowana, the programme to upgrade and de-bottleneck the production facilities, was continued with key plant CAPEX projects awaiting delivery, installation and commissioning of units following placement of orders.
Rodier added that throughput has risen and progress is being made on opening up the Mowana pit by increasing the stripping ratios in the short term to increase the available ore extraction footprint.
“At Mowana, the constraint on production levels remains ore delivery to the mill as a result of poor secondary and tertiary crusher availability and although these constraints have been somewhat offset by improving mill feed copper grades during the past three months, a permanent solution needs to be implemented,” Rodier said.
“Despite the constraints on production which were mostly caused by circuit bottlenecks and breakdowns progress was made during the year as ore processed increased to 632,981Mt compared to 290,259Mt in the previous 15 month fiscal period.”
The company added that following the award of a Mining Licence for the Thakadu deposit, which is approximately 70 km from Mowana mine, the start of ore extraction further increased the utilisation of the Mowana facilities.
Currently, ore processing at the Mowana facilities continues to be batch processed on an alternating basis between Mowana and Thakadu ores due to differences in ore quality that require different chemical reagent suites to maximise copper recovery.
To support the completion of the infrastructure upgrades at the Mowana and Thakadu mines and renewed exploration efforts at Matsitama, the Company’s controlling shareholder ZCI Limited (“ZCI”) has provided strong support during the year.
After providing a $10 (about P65.5 million) million working capital facility in March 2010, ZCI provided a further $7.5 million (about P49 million) development facility for exploration drilling at Matsitama and Mowana North, scoping study at the Makala deposit and certain plant enhancements at Mowana.
ZCI added another funds in February 2011 with a $12.5 million (about P81.9 million) development facility for Mowana plant enhancements, acceleration of mining activities at Thakadu and working capital. At 31 March 2011 $4.0 million of the available $12.5 million had been drawn.
At 31 March 2011 ZCI also provided a 1 year extension on the payment of the March Facility which was due.
