African Copper Share Discussion Threads

[fruiticus] 24/1/2013 08:33

24 January 2013



African Copper Plc

(AIM: ACU, BSE: African Copper)



African Copper production report for the third quarter of fiscal 2013

Production up 47% year on year



African Copper Plc ("African Copper" or the "Company"), announces production figures for the third quarter of fiscal 2013 from its 100% owned operating mines in Botswana.



For the third quarter of fiscal 2013, the Company produced 2,577 Mt of copper in concentrate.



Third Quarter Production Highlights

· Ore processed of 215,383 Mt; 28% increase over prior year's Q3

· Copper recovery of 69.8%; 20% increase over prior year's Q3

· Copper produced in concentrate of 2,577 Mt; 47% increase over prior year's Q3



Mr Jordan Soko, Acting Chief Executive of African Copper, said, "The Company is on track to achieve record copper production in fiscal 2013. Our operations teams continue to successfully execute our mine plans and have done a great job to increase throughput, efficiencies and plant utilization. The focus now is to exceed these levels as we move into increasing proportions of sulphide ore at Thakadu and to prove up additional resources from our strong portfolio of appraisal and exploration prospects."



All of the ore processed at the Mowana facilities during the last three quarters was sourced from the higher grade Thakadu Mine. Ore processed in the third quarter and concentrate produced were slightly lower than the second quarter as a result of mining a lower grade split orebody from the western end of the Thakadu pit in the third quarter. Copper recovery at the plant has continued to benefit from the increasing proportion of sulphide ore. In the three months reported below, the proportion of sulphide ore processed increased from 43% of the total in October, to 70% in November and 86% in December. Trucking operations from Thakadu to the Mowana Mine processing facilities, a distance of 70km, ran to plan throughout the quarter.



Production levels for the three months ended 31 December 2012 are set out below:



Description


October

2012


November

2012


December 2012


Total Q3 2012/

2013


Total Q2 2012/

2013


Total Q1 2012/

2013

Ore processed (Mt)


76,544


58,983


79,855


215,383


250,005


171,908

Cu grade (%)


2.18


1.78


1.22


1.71


1.82


1.91

Recovery (%)


54.9


69.6


95.5


69.8


63.4


49

Concentrate produced (Mt)


4,322


3,287


4,220


11,829


13,810


6,888

Copper produced in concentrate (Mt)


916


730


931


2,577


2,882


1,609



Totals for the Third Quarter Ended 31 December 2012 in comparison with prior periods are presented as follows:



Description


3Q 2012/13


3Q 2011/12


FY 2011/12

Ore processed (Mt)


637,296


561,256


738,921

Cu grade (%)


1.81


1.89


1.93

Recovery (%)


61.3


49.3


48.4

Concentrate produced (Mt)


32,526


23,210


31,027

Copper produced in concentrate (Mt)


7,067


5,234


6,910

* Production during the first quarter ended 30 June 2012 was adversely affected by the failure of the mill pinion shaft which caused production to be shut down for 15 days.



As previously announced, the introduction of an increasing proportion of sulphide ore has brought flotation stability and improved recovery, evidenced by the December 2012 flotation recovery of 95.5%, and has also resulted in the reduction of costs due to curtailed usage of high cost flotation reagents. Improved plant efficiency continued through the quarter, principally from the Larox filter plant which increased filtration capacity and reduced moisture content.



The main mining contract at Thakadu mine, which is due to expire on 31 March 2013, is currently under review and being renegotiated. Pursuant to this, certain mining equipment has been demobilised. In the interim, mining operations continue with both the existing main contractor and a second Thakadu mining contractor who has been on-site since mining commenced at Thakadu. As a short term measure, management is also looking at equipment hire or short term contracts to augment mining volumes. As a result of the negotiations around the mining contract, the Company is expecting that less volume will be mined from Thakadu until additional equipment is delivered and the mining contract review finalised. The reduction in mining volumes is likely to result in lower mining costs. Any impact on ore delivery during a possible transition phase will be mitigated by the use of oxide ore stockpiles situated at Thakadu and Mowana Mines but the use of reagents to treat the oxide ore will increase treatment costs, reducing the benefit of the lower mining costs.



The technical information in this announcement has been reviewed and approved by David De'Ath, BSc (Hons), MSc, GDE-Mining, MIMM and MAusIMM, the Company's Manager, Geology, of the Mowana Mine for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009.


Basically positive but still no real news................

[lesteague] 22/12/2012 15:57

What was the share price when ZCI brought into ACU. I can't see them releasing stock until the share price has recovered slightly - keep in mind Acu's last production update was pretty impressive compared to the production figures for the whole of 2012..

[fruiticus] 22/12/2012 09:47

Companies Act, 1973, (No. 61 of 1973)
The Securities Regulation Code on Takeovers and Mergers
The Code
Section D. The Approach, Announcements and Independent Advice
Rule 2. Secrecy Before Announcements: The Timing and Contents of Announcements

2.2) The cautionary announcement



2.2.1) Definition and contents of a cautionary announcement



A cautionary announcement is a brief announcement to be published in the press and is intended to preserve the integrity of trading in a company's securities on The Stock Exchange preceding or during negotiations which may lead to an announcement of a firm intention to make an offer.
It may be couched in general terms and would normally state that talks are taking place or that a potential offeror is considering making an offer or that an announcement is pending which could have a material effect on the price of the offeror or the offeree company's securities. It shall state that the holders of the securities concerned are advised to exercise caution in dealing in their securities. The potential offeror must be named in the cautionary announcement unless the Panel rules otherwise.


2.2.2) When a cautionary announcement shall be made



A cautionary announcement shall be made when an offer is under discussion and -

a) the offeree company is the subject of rumour and speculation or there is an abnormal movement in the price of the offeree company's securities or in the volume of such securities traded on The Stock Exchange; or

b) negotiations or discussions are about to be extended to include more than a very restricted number of persons (outside those in the companies concerned who need to know and their immediate advisers).


there are clear rules regarding making cautionary announcements in takeover situations

[p1ncer] 10/12/2012 10:38

"The engagement of Rand Merchant Bank ("RMB") to realise value from ZCI's investment in its subsidiary, as reported previously, remains a key area of focus. RMB and the Board of Directors remains committed to the process to identify potential parties with sufficient resources to support the development of the Group's operations and realise its potential value"

I personally don't think they will sel out completely, I think they are looking form someone with deeper pockets than they have to bring the other exploration areas into production.
It looks like there is a lot more potential than has so far been realised.

[serge gnabry] 10/12/2012 09:29

are ACU still going to be disposed off by the majority shareholder?

[p1ncer] 10/12/2012 09:10

Morning Outsourcer,

Sp movement doesn't suprise me.

As far as I am concerned this is now completely de-risked, and I will top up at these levels whenever I can.

A no brainer as far as I can see and a great little investment.

Lucky for us this is completely off the radar of most investers, by the time they realise it will be to late.

[outsourcer] 10/12/2012 09:07

All looking good, disappointing that the share price hasn't moved though, need to spend a bit of timing looking through everything

[p1ncer] 10/12/2012 09:01

"Mowana North Exploration Project

"We carried out a total of 34,826 metres of combined diamond and percussion drilling during 2011. 62 new holes
were drilled and combined with data from 10 holes drilled during an exploration programme by Falconbridge
Exploration between 1977 and 1982. At a 0.0% copper cut off grade, Coffey Mining reported an Inferred Mineral
Resource of 56.8 million tonnes grading 0.45% copper"

"The Company is currently committed to a six-month drill-exploration programme to be carried out in two specific
areas of the Matsitama exploration licences:

/T/

1. The Thakadu Near-Mine Licence area including Matsitama West, aimed at
locating additional copper-silver resources to supplement the Thakadu
Mine reserves.
2. the Greater Nakalakwana Target Zone, aimed at locating viable Iron
Oxide-Copper-Gold mineralisation"

Looks like there is plenty more of the stuff to dig up also

[p1ncer] 10/12/2012 08:48

Seeing as they had Operating costs excluding amortisation of $20,7million and they produced 4,490 I work out costs per tonne of about $4600.

Can anyone with better maths then me confrim or refute these figures?

If true with copper at $8000 a tonnes, is very promising indeed

[p1ncer] 10/12/2012 08:22

"Despite our increased revenue, our operating costs declined by 20% compared to the comparative period, reflecting the significant increases we obtained in plant efficiency, and the reduced costs flowing from the greater percentage of sulphide ore."

As I have always said, as production goes up, costs will come down.

By and large these are a cracking set of results.

Plenty of positive stuff in there, and plenty of improvement to come.

[p1ncer] 10/12/2012 08:17

"Copper produced in concentrate during the six-month period increased by 29% compared to the same period last year, and by 31% compared to the six-month period from 1 October 2011 to 31 March 2012;"

"Average recoveries anticipated to continue to increase as mining progresses deeper into the mines and away from more oxidic areas;"

"The overall increase would have been even higher if not for the failure of the Mowana mill pinion shaft on 20 May 2012, which caused a 43% decline in ore processed between April and May 2012"

"the increasing proportion of sulphide ore brought greater flotation stability and improved recoveries, evidenced by the August 2012 flotation recovery of 69.8%. This progress has also allowed us to reduce the costs of deploying the reagent AM2 (secondary collector) and NASH (Sulphidiser), used to treat oxide
ores. Plant efficiency has also benefited from the Larox filter plant we installed this year,"

[p1ncer] 10/12/2012 08:10

Copper produced in concentrate during the six-month period increased by
29% compared to the same period last year, and by 31% compared to the
six-month period from 1 October 2011 to 31 March 2012;

[p1ncer] 10/12/2012 08:08

"African Copper made excellent progress during the six month period ended 30 September 2012 toward achieving stable operations at the Mowana plant and attaining profitability"

[p1ncer] 10/12/2012 08:07

Half year results out.

[lesteague] 30/11/2012 12:13

PI's must be expecting an update from ACU during december, surely ACU have some positive news to share with the market.

[p1ncer] 26/10/2012 21:52

Since 22-May when we had the failure of the Ball Mill pinion shaft, we have had two Record Production RNS's.

So we cannot complain of them not delivering positive news, however when you dig down it becomes even more positive.

The latest update is from October 15 when they produced 976 mt from 81,294 mt of ore processed with
a 69.8% recovery rate

The capacity is capable of I believe 90-100000 mt, and the % of ore processed target is 80%-90%, as both these figures improve, then the amount of money coming in is going to hit some eye watering figures. Also as the amounts being produced go up, the costs come down

If Norlisk or anyone else comes calling ZCI are not exactly a forced seller

[p1ncer] 17/10/2012 13:50

Outsourcer,

I have asked in the past for a per lb or per tonnes cost, without success.

Though as you say they should hit $75m turnover this year, and over $100m next, if they can't make a profit on that they are in the wrong business.

Though to be fair they have had unexpected costs, and now they are mining sulphide ore, costs will come down, recovery's will increase.

They should start to hit the kind of profits that we believed they could when we first bought in a long while ago.

If they don't get sold first.

Though I have a feeling that ZCI are not looking ro sell out completely, just reduce their stake, and have a wider portfolio. It could be they have plenty of companies wanting a full sale, but no one wanting a jv on their terms and conditions

[outsourcer] 17/10/2012 09:00

P1ncer, that is what confuses me, from memory back in December 2010 we hit 6p just after the granting of a licence for Thakadu I think. Back then we had no income, now we have had a record production quarter with potentially more to come, should turnover around $75M for the the year to March 2013, yet are still 60% down from that level and as you said in your other post are near record lows.

If we had an idea of the productions costs per tonne of copper produced that would give us some idea of the expected net profit.

[p1ncer] 17/10/2012 08:46

"highly oxidized ore has been difficult to process, as evidenced by the 2012 recovery rate of 48%. As noted, to assist in improving recoveries from the oxide ore, we employed a series of chemical re-agents, significantly increasing the cost of processing. These chemicals will not be required as the mine moves into the sulphide ore. While historical test work estimated a recovery of some 40% for the Thakadu oxide ore, the corresponding estimate for the sulphide ore is in the range of 80% to 90%"

So far recovery rates have increased to between 55% and 69%, if they can increase to 80% to 90% this will further increase cash flow and profitibility. so still plenty of improvement left in the tank.

If you go back a year and a half, when the share price was 6p you would have expected the share price to hit 9p to 10p with this kind of good news.

These days it seems to stick to 2p like glue.

[p1ncer] 17/10/2012 08:44

Discovery Metals' The Boseto Copper Project (100% owned) is designed to produce an average of approximately 36,000 tonnes copper and 1.1 million ounces silver per annum in concentrate from 3 million tonnes per year

ACU already mining 950mt per month and 125,477 ounces of silver in the last financial year. If I remember ACU where looking for between 20k and 30k mt p/a .Plus they also have other prospecting zones

Both opperate in botswana, DML recently tunred down an $830m bid.

Not always easy to compare like for like, but even at a give away price $200m looks somewhat ridiculous in comparision.

Surely this strategic review cannot continue indefinately, Lets hope we can get some idea of what we are actually worth. Sometime before the next ice age would be nice

[p1ncer] 16/10/2012 10:40

Mr. Jordan Soko, Acting Chief Executive of African Copper, said," The focus now is to exceed these levels as we move into increasing proportions of sulphide ore at Thakadu and to prove up additional resources from our strong portfolio of appraisal and exploration prospects."

Looks like they are actually delivering, with more to come. Somewhat ironic that the as they reach record production the share price nears record lows

[p1ncer] 16/10/2012 10:40

------------Discovery rejects A$830m cash bid

Production and Markets

Publishing Date 12 Oct 2012

Botswana-focused copper producer Discovery Metals Ltd has rejected a A$830 million(US$852 million) cash takeover from a Chinese joint venture comprising Cathay Fortune Corp (CFC) and China-Africa Development Fund (CADF).

Discovery said after discussing the takeover yesterday with representatives from CFC and CADF it advised the joint venture it would not accept the non-binding A$1.70 per share proposal.

In a statement released to the market, Discovery said the offer was inadequate and did not reflect the value of the company?s operations and expansion plans.

The takeover offer from the joint venture, which is 75%-owned by CFC and 25%-owned by CADF, was made on September 21 but was not publicly announced until October 4.
CFC, which is the largest shareholder in Discovery with about a 13% stake, said at the time the offer was made it represented a 50% premium to the 30 day volume-weighted average price.

However, DML shares had risen steadily to close at A$1.455 on the day before the takeover bid was announced to the markets, reducing the A$1.70 per share offer-------------------------

If they want to spend $830m on a Botswana based copper producer, they could try having a nibble at ACU

[lesteague] 15/10/2012 14:49

i'd guess potential investors are watching to see the next qtr update to see if the production figures are continoues or just a lucky one off.