All data are collected in the Fiscal Year of 2008-2009.

Botswana / Energy, Mining, Resources

African Copper is the holding company of a mineral exploration and development group of companies that are exploring and developing copper deposits in Botswana. The Company is currently commercializing its first copper mine at the Mowana Mine (formerly named the Dukwe Project) and holds permits in exploration properties at the Matsitama Project.

African Copper plc was formerly known as Afrinewco plc and it changed its name to African Copper plc in March 2004. The company was incorporated in February 2004 and is based in London, United Kingdom. African Copper plc operates as a subsidiary of Zambia Copper Investments (ZCI-a Bermudian registered public cash company).

It became the holding company for Mortbury and its subsidiaries following a merger in May 2004. Mortbury was established in 1995 for the purposes of acquiring Messina which held a prospecting licence relating to the Dukwe Project.

The Company's wholly-owned subsidiary Messina holds the Dukwe Project comprising exploration licence PL 33/2005, with an area of 139.6 km2, and within the exploration licence a mining licence 2006/53L of 32.7 km2 valid until end 2031 .To the north of PL 33/2005 an additional licence was applied for and awarded during 2008; this licence 180/2008 covers an area of 114.4 km2. The Dukwe Project with its associated licences encompasses the Mowana Mine and all current estimated mineral resources and reserves associated with the mine; together with north and south extensions of mineralization that lie outside of the Mowana Mine licence area. Open pit proven (10.82 million tonnes at 1% copper) and probable (3.98 million tonnes at 1.4% copper) reserves have been estimated for a total of 14.8 million tonnes grading 1.11 per cent copper.

The Company's wholly-owned subsidiary Matsitama holds the Matsitama Project, which is comprised of the Matsitama Licences. In the Matsitama Project area African Copper holds five prospecting licences which are contiguous with the Mowana Mine deposit. All the licences are valid and contain prospective areas of mineralization.

Mortbury began exploration in the Matsitama Belt in 1995. In 1998, Mortbury signed a joint venture agreement with Anglo American Prospecting Services (Proprietary) Limited ("Anglo") regarding the exploration and development of the Matsitama Project. The work by Mortbury as confirmed by Anglo confirmed the existence and scope of at least three large mineralized targets measured in tens of kilometres of strike extent, as well as numerous smaller anomalies.

In January 2009 African Copper put Mowana mine on care and maintenance pending completion of financing talks. It subsequently received $41 million in funding from ZCI. In September 2009 African Copper announced that Messina Copper recommenced operations at the Mowana Mine.

Mowana is located close to Botswana's second largest city, Francistown, in the north-eastern part of the country, in an area which has been mined for the past 400 years. The Matsitama Project lies adjacent to and south east of the Dukwe Project.

The Group's principal activity is exploring for and developing copper and other base metal deposits in Botswana. It focuses on the development of the Mowana Mine and conducts exploration programme at the Matsitama Project.

208 Employees

For the 6 months ended June 30th 2009, the company posted a pre-tax profit of GBP 27.7 million as compared with a loss of GBP 2.6 million in 2008. About GBP 29.6 million of previous impairment costs recognized in 2008 were written back to its balance sheet.

African Copper's 100% owned Mowana Mine is Botswana's only pure copper mine. Production is yet to start.

The Company's aim is “to grow as a base metal (copper) mining company and the transition from operations start up to sustainable producer at Mowana.”

The ZCI recapitalisation provided an established and experienced financial and management catalyst, enabling ACU operations to grow to their full potential. Its business model currently focuses on the following: plans being made to convert advanced prospect to Mining Licence status at the Thakadu deposit; extensive Matsitama exploration which offers further blue sky potential; and new acquisitions and joint ventures will be considered on a strategic basis to add further value for shareholders and enhance the value of its portfolio.

Currently, the Company has indirect 100% interests in the Projects, located in Botswana.
The mineral rights are 100% attributable to African Copper through wholly owned subsidiaries. Substantial share interests are as follows:

Under Botswana legislation, the Company was required to drop 50% of the surface area covered by the Matsitama exploration licences at the end of the first quarter of 2007. The Company applied to the Geological Survey of Botswana to keep approximately 80% of the surface area of the licences on the basis of prospectivity, work-to-date and exploration expenditures over the past two years. Early in the third quarter of 2007, the Geological Survey approved the application to retain most of the ground encompassed by the licences. Of the four licences, 50% of PL 17/2004 was dropped which represented 12% of the total area of 3,528km². Approximately 88% of the ground was retained.

In December 2006, the Government of Botswana granted Messina the Mowana Mining Licence for the area within the Dukwe Project that would contain the surface development and open pit. This approval followed previous approvals by the Government of the EIA and the EMP, the granting of water abstraction rights and the issuance of a conditional archaeological discharge for the site.

In July 1999 Botswana’s parliament passed a new Mines and Minerals Act replacing the Mines and Minerals Act that had been in place since independence. A summary of the new law is as follows: prospecting Licences for up to 1000km2 are issued for an initial period of three years and renewed for two further periods of two years each; upon each renewal a reduction in the size of the licence by 50% is required; following the conclusion of the seven year period of a Prospecting Licence a Retention Licence can be applied for. The Retention Licence may be granted for an initial period of three years, renewable for not more than three years; the holder of a Prospecting Licence or Retention Licence may apply for a Mining Licence in order to mine a mineral deposit within the Prospecting Licence or Retention Licence; upon the grant of a Mining Licence the Botswana Government has the option of acquiring up to a 15% working interest in the proposed mine, on commercial terms; a Mining Licence will be for a term of 25 years and renewals can be applied for.

Mining companies resident in Botswana are subject to income tax, withholding tax and mining royalties. Botswana’s company tax rate is 25%. A general Withholding Tax of 15% is deductible in Botswana from the payment of dividends, interest and commercial royalties paid to non-residents of Botswana (including non-resident companies). The value of the Additional Company Tax is accumulated and can be used as an offset against the payment of Withholding Tax.

A royalty of 3% of gross market value is payable to the government on production from a nickel, or base metal mine. The term “gross market value” is defined as the sale value received at the mine gate in an arm’s length transaction without discounts, commissions or deductions. The Minister has the power to defer the payment of a royalty for such a period that the Minster may determine. Exchange control regulations in Botswana have been significantly relaxed, effectively allowing the free remittance of funds from Botswana.

Messina Copper restarted operations in 2009. The operational team on site have mobilized a new mining contractor and re-commissioned the concentrator with the assistance of an experienced team of specialist metallurgical and engineering personnel from ZCI. The operational key indicators derived from start up have been encouraging. The feed grade delivered from the pit from fresh ore exposure has been consistently +/-20% above the forecast feed grade of 1.2% Cu. Similarly, the early average concentrate grade produced is 26% Cu which is +/-12% above forecast.

During 2008 work continued on the three main Cu-Zn-Pb-Ag-Au structural corridors identified in the belt and in the Ultramafic Formations with Ni-PGM potential, namely: Thakadu Mutsuku Corridor; Nakalakwana Hill Corridor; Lepashe Cu-Snake Corridor; and the Mosupe-Sebotha Ultramafic Formations. As a result of interpreting the combined historical data of 118,000 soil samples with 17,000 African Copper soil samples, two hundred and seven (207) Cu, Cu-Zn and Cu-Ni first priority Areas of Interest (“AOI’s”) were selected.