African Copper Plc, the BSE listed copper producer and exploration company focused on Botswana, said it has secured an additional loan of USD5 million (about P36 m) from its controlling shareholder ZCI Limited (ZCI).
It said the purpose of the new loan is to provide the company with further working capital and to invest in its Mowana Mine facilities and operations.
The new USD5 million loan from ZCI is a secured loan facility with an interest rate of 9.0 percent, repayable on 31 March 2013 (the Facility).
It added that interest will be accrued and interest payments deferred until 31 March 2013. The terms and conditions of the Facility are on substantially similar terms to the previous term loans from ZCI.
“USD1 million will be invested in increasing the trucking of ore from the nearby Thakadu deposit to the Mowana facilities, USD2 million will be invested in a Larox Filter to be installed at Mowana to reduce moisture content in exported concentrate and USD2 million of the Facility will be used for general working capital purposes,” the company said.
African Cooper revealed that mining and processing at Mowana are making positive progress toward reaching commercial production levels and earning positive monthly cashflow.
It added that both the Larox Filter and the increased Thakadu trucking campaign are key initiatives in the plan to become cash positive.
As ZCI owns 84.19 per cent of African Copper’s total issued ordinary share capital at the date of this announcement and is providing financing to the Company, the ZCI Loan falls within the definition of a related party transaction under Rule 13 of the AIM Rules for Companies.
The independent directors of the company consider, having consulted with nominated adviser Canaccord Genuity Limited, that the terms of the transactions are fair and reasonable insofar as its shareholders are concerned.
Last month African Copper secured an additional loan of USD2.0 million from its controlling shareholder ZCI Limited ZCI with the funds going towards providing the company with further working capital for its Mowana Mine facilities.
The USD2.0 million (about P14 m) was a secured loan facility with an interest rate of 9.0 per cent., repayable on 31 March 2013 (the Facility).
Interest will be accrued annually and interest payments deferred until 31 March 2013.
The terms and conditions of the Facility are on substantially similar terms to the previous term loans from ZCI and bring ACU’s total interest-bearing loans (including accrued interest) from ZCI to USD64.9 million, excluding the existing convertible loan of a further USD8.4 million.