African Copper Plc, the owner of the Mowana mine, said Friday that it is planning to re-open its Botswana operation in the next three months after it got an injection of US $ 10 million from its Zambia Copper Investments (ZCI), as part of a move to help the country’s budding miner to get off its feet.
African Copper sold 6,766,705 shares worth about US $ 9.9 million that gave ZCI an interest in the organization of 82 percent during the week. That is an addition to the extra US $ 25.4 million which it injected from the US $ 22 million loan facility. That move is expected to move back the legal threats posed by Natasa Mining Limited ÔÇöthe Australian company whose bid was rejected ÔÇô which is suing the miner for not accepting its bid.
“We are currently working on a new mining plan and the plan is to re-start operations within three months,” African Copper’s Chief Executive Officer, Chris Federicks said Friday. The company also de-listed from the Toronto Stock Exchange saying that London market will be able to serve the rest of Europe and northern America.
The new loan facility that was re-negotiated during the beginning of the week will see African Copper and its subsidiaries being given up to US $ 25.4 million which ZCI claims is enough to pay in full bonds acquired by Natasa which are said to be carrying a face value of US $ 21 million or 149 million Botswana pula.
The move means that the offer is being pushed up from the initial US $ 22.5 million that was announced at the beginning of May.
“As a result of the new funds being provided to ACU (African Copper) under the loan, ZCI and ACU have agreed to reduce the amount of the previously announced US $ 10 million bridge finance loan by US $ 3 million because compromise agreements that have been reached with Messina’s (African Copper subsidiary in Botswana) two largest trade creditors directly by ZCI and, therefore, these other funds are not required.
“Small creditors will be repaid in full in cash from the proceeds of the financing package as their debts become due,” ZCI said in a statement released on Monday.
African Copper Plc, the tri-listed copper mining on the London AIM, Toronto and Botswana stock exchanges, was slapped with a law suit last week just days after it rejected Natasa offer.
However, ACU has shrugged off threats of liquidation from Natasa Mining Limited indicating on Friday that it would strongly defend the law suit.
Chris Fredricks, chief executive officer for African Copper, confirmed to Sunday Standard Friday night that they would vehemently defend the challenge that falls on the heels of the African Copper’s EGM’s rejection of Natasa’s offer.
“Natasa has entered into negotiations with the bondholders indicating that they are going to file a wind-up of the company,” Fredericks told Sunday Standard, adding that “ we are going to challenge it”.
“The agreement under ZCI offer at this point in time provides more capital for the company (African Copper),” Fredericks added.
African Copper which shut a mine in January after running out of cash, fell the most in London trading since going public in 2004 after the holder of a bond issue demanded immediate repayment.
African Copper slid as much as 51 percent. The London-based company has breached the 150 million-Botswana-pula ($21 million) issue’s terms, Natasa Mining Ltd., owner of the bonds, said Friday in a Regulatory News Service statement. It petitioned the High Court of Botswana to wind up African Copper’s Messina Copper unit (otherwise known as Mowana mine) , the bond issuer, the statement shows.
The copper producer agreed in March to a $15 million investment from Natasa in return for a controlling stake. In the following month, Zambia Copper Investments Ltd. offered $22.5 million in financing. African Copper stockholders rejected Natasa’s offer this month in favour of the proposal from Zambia Copper, which has a stake in three mines in the country.
The African Copper, London AIM, Toronto and Botswana listed company is operating Mowana mine which is about 100 kilometers west of Botswana’s second largest city, Francistown.