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June 7, 2007
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African Copper-Annual Meeting Statement-Business & Growth Strategy - Growing African Copper into Botswana's next copper producer
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LONDON, UNITED KINGDOM--(CCNMatthews - June 7, 2007) - African Copper ("African Copper" or the "Company") (TSX:ACU)(AIM:ACU)(BSE:AFRICAN COPPER) announces its business and growth strategy as it makes the transition from exploration through development and into production over the course of the next 12 months.
"African Copper has reached the stage in its evolution as a company where we are in the position to articulate our broader business strategy and our opportunities for growth," commented Joe Hamilton, African Copper's Chief Executive Officer. "We began with an extensive sulphide exploration programme in the Bushman Shear area of northeast Botswana in 2005. By the end of 2006 we had completed the delineation of resources available for mining and had finalized flowsheets and mining methods. The 2006 year culminated in the award of a 25-year mining licence and the commencement of construction activities at the Dukwe site. We have also begun construction of a 1-million tonne-per-year concentrator. Alternative production optimizations scenarios are currently under examination in order to maximise the currently available mineralized asssets. Pre-production stripping has also been approved by the Board through the utilization of a scraper fleet to extract near-surface overburden ahead of the mobilization of the main load & haul fleet. We expect to have copper production in the first quarter of 2008 from the Dukwe open pit. The strategy that follows is our roadmap for the future."
Our Growth Strategy
African Copper's goal is to grow as a base metal (copper) mining company and to provide above average returns to shareholders. The Company's most advanced project is the Dukwe Mining Project, for which extensive drilling and sampling and subsequent engineering and metallurgical test work has been completed. African Copper also owns the rights to the prospecting leases for the Matsitama Exploration Project, which lies adjacent to and south east of the Dukwe Mining Project. The Matsitama Exploration Project offers 10 drill-ready and highly prospective targets, including the Thakadu-Makala Project.
In order to reach African Copper's goal, a growth strategy has been implemented encompassing four key strategic growth objectives:
1. Production - copper production from the Dukwe Mining Project is
expected to commence by the end of the first quarter of 2008 via open
pit,
2. Production Expansion - the processing plant has been engineered to
allow for a simple expansion of throughput capability. In order to
increase production the Company must first determine the ultimate
source for increased mill-feed, including the following options:
a. Underground resource - The substantial underground sulphide resource
is the most obvious source for supplying new mill-feed to an expanded
processing facility. The material has indicated resources. An access
plan with estimated capital costs and stoping outlines is expected to
be delivered by year-end 2007. Underground resources will likely
require trial mining prior to conversion to reserves.
b. Near pit resources - The Dukwe mineralization is known to extend to
the north and south of the open pit area. Significant copper-in-soil
anomalies exist along the 25-kilometre surface expression of the
Dukwe Shear. A recent geophysical survey has identified a number of
co-incident high-priority targets that will be drill-tested by
year-end 2007. A second open pit is a preferred development option
since capital requirements will likely be less than capital required
for an underground mine.
c. Production Optimisation - Studies are currently underway to optimize
the recovery of copper from the open-pit through the potential
utilization of Dense Media Separation (DMS) and Solution Extraction &
Electrowinning (SX/EW). The process facility has been designed to
allow an easy retrofit of either option if the studies prove
positive. Preliminary results have indicated that the Dukwe
mineralization is amenable to upgrade through a DMS plant. This would
have the effect of allowing mining to a lower cut-off, processing of
higher grade material through the concentrator and an overall
increase in the contained metal output of the Dukwe deposit.
3. Exploration - an aggressive exploration programme in the Matsitama
Exploration Project area continues at Thakadu, Nakalakwana Hill, and
at various other nickel, zinc and copper targets. The Company intends
to move swiftly through the initial assessment of these targets and
advance the most promising targets to delineation drilling as soon as
possible. The latest drill results from Thakadu (see African Copper
press release dated 17 May 2007) have shown that the Matsitama belt is
host to high-grade deposits of copper and silver.
4. Mergers & Acquisitions - African Copper continues to identify and
assess other projects and operations where a strategic fit has the
possibility of enhancing shareholder value.1. Production
The success of the Dukwe Mining Project is dependent on reaching key predetermined milestones over the course of the next 5 years involving both the initial open pit mine and the processing plant, both of which are currently in development.
African Copper anticipates production of the first copper concentrate from the Dukwe Mining Project in the first quarter of 2008, ramping up to full production through the remainder of the year. In order to reach full production, a number of events must occur, some of which were documented in the first quarter of 2007 and others which have yet to occur.
During the first quarter of 2007, the Company was granted an unconditional archeological permit which is required under Botswana regulations. Any areas of archeological interest that had been identified on the property to be covered by the mining lease, including areas of artifacts remaining from previous mining operations, were examined by third party consultants and reports are compiled for historical records. Once this mitigation process was complete, a permit was granted allowing the Company to work through these areas.
In December 2006, the Government of Botswana granted the Company a 25-year mining licence. This approval followed previous approvals by the government of the Environmental Impact Assessment ("EIA"), the Environmental Management Plan ("EMP") and the granting of Water Abstraction Rights. The issuance of the mining licence allowed the Company to begin the mine construction programme at the Dukwe Mining Project. During the first quarter of 2007, the mining licence was expanded to include a 5 km area of influence along the strike extent of mineralization around the mining area, an expansion from the 2 km area of influence originally granted. Under existing EIA and permits, any material found in this expanded area may be brought into the mine plan without the requirement for additional permitting.
An updated mineral resource estimate is being calculated for the Dukwe Mining Project to include the 7,000 metres of drilling that was completed subsequent to the cut-off date of the previous mineral resource estimate (see African Copper press release December 2006). Upon completion of this updated estimate, which the Company expects to release by the end of the second quarter of 2007, the information will be used to reevaluate the open pit optimization plan. This in turn will allow the completion of an optimized production schedule. African Copper anticipates announcing this schedule by late third quarter or early fourth quarter of 2007.
In terms of processing plant development, the primary, secondary and tertiary crushers were purchased in June 2006 and are currently undergoing retrofitting in Johannesburg, South Africa. An order for a ball mill was placed in June 2006. The Company expects that all three crushers and the ball mill will be installed by the end of the third quarter of 2007. The deep footing and foundations for each of these pieces of equipment were nearing completion at the end of the first quarter of 2007.
Botswana Power Corporation (BPC) has been contracted to supply power from the main grid to the mine site by the fourth quarter of 2007. Until that time, construction power will be provided by a generator, which will later be used as a standby power supply during production. The power line to the water bore field has been commissioned and this is initially powered using the on-site diesel generator.
In early May 2007, the Company signed a 66-month mining contract with Moolman Mining Botswana (Pty) Ltd ("Moolmans"), an operating group of Aveng Limited. The contract provides for both the mobilization and demobilization of the mining fleet which, at full contingent, will consist of three face-loading shovels and twenty-six 100-tonne haul trucks. The Company expects this fleet to mobilize over a six to ten month period beginning in July 2007 and begin operating in August 2007. It is anticipated that the mining cost will be in the range of US$1.80 - $2.50 per tonne of material moved (both ore and waste rock) over the course of this contract.
Currently, Moolmans has a fleet of six scrapers in operation on site to facilitate the pre-stripping of surface material. Through this pre-stripping process, African Copper anticipates the stockpiling of 180,000 to 210,000 tonnes of material prior to the commissioning of the 1-million tonne-per-year concentrator. This stockpile will be used to help ensure a smooth start-up and commissioning phase for the processing facility.
Site construction activities are expected to reach completion by late fourth quarter of 2007 with cold commissioning of the processing plant planned to begin early in the first quarter of 2008 and hot commissioning planned for mid to late first quarter resulting in the production of first concentrate in the first quarter of 2008.
Another key driver for achieving production from the Dukwe Mining Project on time is the hiring of required personnel at all levels. To the end of the first quarter of 2007, all senior staff members have been recruited and are in place. Over the next four quarters, the Company and its contractors will continue to hire semi-skilled labour from the region surrounding the Dukwe Mining Project. With seven operating mines within a 200 km radius of the Dukwe Mining Project, the Company believes there is no shortage of skilled workers. Relationships with the local communities from which much of the labour will be drawn remain cordial and African Copper has implemented community relations programmes to increase awareness of the Dukwe Mining Project and the employment opportunities that will arise for community members.
It is African Copper's intention to change the name of the Dukwe Mining Project before the end of the third quarter 2007. A study is currently underway in consultation with local communities to explore potential names for this open pit mine.
2. Production Expansion
African Copper has a large land position around the Dukwe Mining Project in a favourable geological setting, which remains relatively unexplored. Sourcing additional mill-feed for production expansion may come from one or more of three options: underground mining, near-mine exploration or from production optimization methodologies.
Underground mining/secondary pit
A substantial portion of the Company's indicated resource occurs as sulphide copper beneath targeted open-pit mining levels. This material represents a significant opportunity for African Copper to access extra mill-feed early in the mine-life of Dukwe. The current development plan envisages the underground mine being developed over the life-span of the open-pit utilizing available cash flow to support capital costs. Accelerating this underground development would allow the Company to supply more mill-feed to the processing facility and thereby increase the annual copper production from the Dukwe Mining Project. Studies are currently underway to determine likely capital costs and construction schedules for the underground mining option. These studies are expected to be complete by the end of 2007.
Near-mine exploration
Extensive TITAN geophysical surveys have been completed along strike of the Bushman Shear zone from the Dukwe mineralization. These surveys encompass an area of more than 30 km around the shear zone to the north and south of the proposed open pit, where sulphide mineralization at the Dukwe Mining Project is known to continue. During the fourth quarter of 2006 the Company completed compilation of the data from these geophysical surveys. This information will be integrated into the development plan for the entire deposit and the results of this survey will form the base for follow-up exploration and delineation drilling during 2007. A number of copper and gold targets have been generated to the south of the Dukwe deposit. Exploration drill programmes are expected to commence shortly on the most prospective targets. The development of a second open pit may allow for an increase in plant throughput and associated copper production. Capital costs for a second open pit are expected to be lower than for the development of an underground mine.
Mineral resource estimates were completed in the vicinity of the proposed open pit in December 2006. Additional drilling was completed to the south of the pit area after the cut-off date for compiling the December estimate. In addition, a close-spaced drill programme was conducted within the open-pit for grade control purposes. African Copper intends to provide a new mineral resource estimate for both the proposed open pit and potential underground mine before the end of the second quarter of 2007.
Production optimization
The Company is testing the applicability of using Dense Media Separation ("DMS") technology for the processing of mixed ore materials as a method to maintain grade control thereby optimizing production. In addition, the use of conventional Leach Solution Extraction & Electrowinning technology to treat oxide concentrates on site is being examined. Results of test work to determine suitability and applicability of these technologies is expected in the third quarter of 2007. Initial results remain encouraging. The DMS plant will be required to enable bulk mining of the underground mineralization, but the Company may elect to utilize the same technology during open-pit mining.
The Dukwe mineralization has a vertical orientation with a resultant high strip ratio in the open-pit. Pit slope studies were completed in 2006 on a pit design that had a near-zero risk of failure. New studies have been commissioned that will look at risk-adjusted angles for pit slopes. These studies may result in different pit slope angles and a change in the ultimate pit strip ratio which may enhance the project economics.
Additional information with respect to Dukwe is contained in a technical report prepared by RSG Global dated December 1, 2006 entitled "Dukwe Copper Project - Database Review, Geological Modeling and Grade Estimation of the Dukwe Copper Project. A copy of this report may be obtained from Sedar at www.sedar.com.
3. Exploration
Exploration activities are divided into risk profiles (ranked from lowest to highest risk):
i) near mine exploration - lowest risk
ii) along strike indications of mineralization to the south of the Dukwe deposit
iii) exploration in the vicinity of known mineralization - Thakadu
iv) greenfields exploration of geophysical/ geochemical anomalies - highest risk
Near-mine exploration activities are described in the Production Expansion section above and will be conducted utilizing the mine-site geological team. The objective is to move discovered areas of mineralization that are in close proximity to the processing facility into a consolidated mine plan.
Previous workings identified an area of the Dukwe shear that had substantial copper and gold anomalies in soils. Coincident geophysical anomalies mark these areas as having a high priority for follow-up. The Company expects to mobilise a drill before the end of the second quarter of 2007.
The Matsitama Prospecting Licences cover an area of approximately 2,000 km2 of highly prospective mineral holdings. The Matsitama exploration porgramme is administered from a stand-alone exploration base camp just outside of Matsitama Village and close to the Thakadu deposits. The exploration activities are separate from the operating team at the Dukwe deposit and maintain a dedicated staff with a specific budget.
Two areas within the large Matistama Prospecting Licences have been the subject of continuing studies:
1. Thakadu-Makala-Dihudi-Mutsuku trend ("Thakadu");
2. Nakalakwana
Both of these areas of focus have undergone extensive geophysical surveying. Exploration drilling in each area is ongoing and results will be released as they become available. The Matsitama Exploration Project has a wealth of systematic multidisciplinary exploration data that indicates substantial areas of highly prospective terrain especially for sediment-hosted copper and zinc deposits.
Additional information on the Matsitama Exploration Project is contained in a technical report dated 30 March 2006 and entitled "Technical Report on the Dukwe Copper Project and Matsitama Prospecting Licences, Botswana, Africa", a copy of which can be obtained under the Company's profile on SEDAR at www.sedar.com.
Thakadu
The Thakadu deposits are located approximately 70 km to the southeast of the Dukwe Mining Project and 5 km to 10 km from the Francistown-Orapa paved highway. In 2006, the Company established an exploration base camp and initiated a 10,000 metre delineation drill programme at the Thakadu deposits. The drilling was confined to depths that could be accessed by open-pit methods although the deposits are known to continue to depth. This drilling programme was completed in 2006, and final assays have been received. A mineral resource estimate is currently being prepared by independent consultants, and this is expected to be released by the end of the second quarter of 2007. The geological mapping of drill core from Thakadu has led to new geological interpretations of the area. Several unexplored geochemical anomalies have now become higher priority exploration targets.
The Thakadu deposits represent an advanced exploration project that has the potential to develop into a mining project in its own right or, alternatively, as a complementary project running either in parallel or in series with the Dukwe Mining Project. A preliminary economic assessment of the capital costs required to bring the Thakadu deposits to production indicate that another deposit of similar size and grade is required in the immediate area in order to justify the construction of a stand-alone plant. Exploration efforts will be focused on the unexplored geophysical and geochemical anomalies within 5 kilometres of the Thakadu deposits.
Drilling of new targets discovered by the geophysical surveys undertaken in 2006 continues with results expected in the third quarter of 2007.
Nakalakwana
This Copper/Gold exploration target is represented by an extensive area of alteration, some 5 km by 12 km, the centre of which is located approximately 140 km to the southeast of the Dukwe Mining Project. More than 1,700 metres of phase one drilling was completed by the end of April 2007 and results are expected for release by the end of the second quarter of 2007. In addition, an extensive TITAN geophysical survey has been completed over a substantial potassium radiometric anomaly that occurs in this area. This survey has generated a number of high-priority anomalies and drilling of these targets will continue throughout 2007.
4. Mergers & Acquisitions
African Copper will continue to examine potential merger or acquisition opportunities in southern Africa where strategic fit with current projects is determined. Copper remains the focus for the Company, although opportunities exist for zinc, nickel and gold deposits.
Strategy Summary
This strategy provides the roadmap that African Copper will use as a guide for growth as it makes the transition from explorer to producer. The roadmap identifies key strategic decision points that will be constantly challenged to adjust thinking in order to optimise the transition of the Dukwe deposit into production, expand and optimise tenement production opportunity, and to identify new exploration targets leading to future resources.
Mr. Joseph Hamilton, P.Geo. and Chief Executive Officer of African Copper, is a "qualified person" as such term is defined in National Instrument 43-101. This press release has been prepared under Mr. Hamilton's supervision.
African Copper PLC
African Copper is a tri-listed (AIM, TSX, Botswana Stock Exchange) international exploration and development company. African Copper is developing its first copper mine at the Dukwe Mining Project scheduled to commence production in the first quarter of 2008. The flotation concentrator at Dukwe has been designed for a 3,000 tonne-per-day throughput producing approximately 44 million pounds of copper in concentrate annually at full production. Initial production is expected to be from open pit, followed by underground mining of sulphides.
The Company's other interests are the Matsitama Exploration Project concessions adjacent to the Dukwe Mining Project, which contain ten high priority drill-ready targets and 35 lower priority targets. For more information on African Copper, please visit www.africancopper.com or email info@africancoppper.com.
This press release contains or refers to forward-looking information, including statements related to future production, exploration and mine development plans, timing of the development of the Company's projects in Botswana, exploration results, metallurgical test results, and other statements which are not historical facts. When used in this press release, words such as "schedule", "could", "plan", "estimate", "expect", "believe", "intend", "may" and similar expressions are forward-looking statements. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include risks related to failure to convert estimated mineral resources to reserves, the grade and recovery of ore which is mined varying from estimates, future prices of copper, capital and operating costs varying significantly from estimates, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, delays in the development of projects, conclusions of economic evaluations, political risks arising from operating in Africa, changes in project parameters as plans continue to be refined, and other risks involved in the mineral exploration and development industry. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could case actual results to differ materially from expected results. Accordingly, readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or to revise them to reflect new events or circumstances, except as required by law.
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CONTACT INFORMATION:
African Copper Plc
Naomi Nemeth
Vice President, Investor Relations
(416) 214-2922
Email: Info@africancopper.com
Website: www.africancopper.com
or
Numis Securities Limited (NOMAD)
John Harrison / James Black
+44 (0) 20 7260 1000
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INDUSTRY: Manufacturing and Production - Mining and Metals
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