African Copper Plc
TSX : ACU
AIM : ACU

African Copper Plc

May 13, 2009 02:00 ET

African Copper Plc: Amended Agreement Between African Copper and Zambia Copper Investments

LONDON, UNITED KINGDOM--(Marketwire - May 13, 2009) - African Copper Plc (AIM:ACU)(TSX:ACU)(BOTSWANA:AFRICAN COPPER) -

Zambia Copper Investments Limited

(Registered in Bermuda)

(South African registration number 1970/000023/10)

JSE share code: ZCI & ISIN: BMG988431240

Euronext share code: BMG988431240

Zambia Copper Investments Limited ('ZCI') and African Copper Plc ('ACU')

Amended Agreement between African Copper and Zambia Copper Investments

Further to their joint announcement on 11 May 2009, ZCI and ACU are pleased to announce that they have on 12 May 2009 entered into amended versions of the binding agreements pursuant to which ZCI has agreed to provide ACU with a comprehensive financing package of approximately US$22.5 million (the "Financing Package"). Except as detailed below, the terms of the Financing Package are unchanged from those announced on 11 May 2009.

Bridge loan

The 10 million Dollar bridge loan (the "Bridge Loan") will now be available in two tranches as follows:

an initial tranche ("Tranche A") of up to $7,000,000 of which:



- $5 million has been drawn down by ACU for the purpose ofrepaying
indebtedness owing to Natasa Mining Limited, for professional fees
and for other authorised expenditures;

- an amount of up to $2 million to be drawn down and used to make
payment of the outstanding interest due on ACU's Pula bond (the
"Bond"). $1.75 million has been drawn down and used to make this
payment; and

- will, from the date of any draw-down of monies under Tranche B,
bear interest of twelve per cent. (12%) per annum; and

a second tranche ("Tranche B") of an amount equal to US$10 million
less the amount of Tranche A (but being no less than $3 million)
that:

- will be available following the execution of a compromise agreement
with Read, Swatman & Voigt (Pty) Limited ("RSV") and security for
the Bridge Loan having become effective;

- will be available for the purpose of making an interim payment to
RSV of amounts owed to them, as described below and for other
authorised expenditures; and

- will bear interest of twelve per cent. (12%) per annum.


Trade creditors

As announced on 12 May 2009, ACU and ZCI have entered into a binding debt assignment agreement with Moolman Mining Botswana (Pty) Limited ("Moolman") pursuant to which Moolman assigned its 60 million Pula plus VAT (approximately US$8 million at an exchange rate of US$1/7.5 Pula) outstanding debt (the "Moolman Debt") to ZCI at a price equal to 50 percent of the face value of the Moolman Debt plus the full amount of invoiced VAT. The amount of the VAT will be refunded by ACU to ZCI upon recovery by ACU.

Further, ZCI has today entered into a binding debt assignment agreement (the "Senet Agreement") with ACU's engineering procurement contractor Senet CC ("Senet") pursuant to which Senet assigned its ZAR 17,002,545 (approximately US$2 million at an exchange rate of US$1/ZAR8.44) outstanding debt (the "Senet Debt") to ZCI at a price equal to 50 percent of the face value of the Senet Debt.

As with the Moolman Debt, in order to help secure ACU's future and to accelerate the recommencement of mining operations at what is an important mine in Botswana, ZCI has agreed with ACU that it will not seek repayment of the Senet Debt until at least the completion of the Financing Package.

As a result of the Senet Agreement, Senet will not be taking up its portion of the offer to large trade creditors outlined in the announcement of the Financing Package.

ZCI still proposes that RSV, ACU's remaining large trade creditor, would be paid in cash 40 percent of monies owed and issued with approximately 1,631,766 new ordinary shares in full and final settlement of debts due from ACU. Following completion of the Financing Package, RSV would have an interest of 0.2 percent of the enlarged ACU share capital. The payment to RSV would be made in two equal instalments with an interim payment of half the amount made upon the availability of Tranche B of the Bridge Loan and the other half paid at completion of the financing transactions.

Small creditors will still be repaid in full in cash from the proceeds of the Financing Package as their debts become due.

Bondholders

Utilising the additional funds available to ACU under Tranche A of the Bridge Loan, ACU has today made a payment (the "Interest Payment") of 12,250,000 Pula (approximately $1.75 million at an exchange rate of US$1/7.0 Pula) to the trustee of the Bonds for immediate payment to the bondholders of the outstanding interest due on the Bonds.

Shareholdings

The proposed post-Financing Package shareholding structure following the revisions detailed above would be as follows:



Description New Share Structure

Ordinary Shares % of total

Shares to be issued to large trade creditors 1,631,766 0.20

Existing shares in issue 146,859,000 17.80

Shares to be issued to ZCI 676,570,500 82.00

TOTAL 825,061,266 100.00


The numbers set out above assume that the Convertible Loan Facility has not been converted into ordinary shares of ACU. Were the Convertible Loan Facility to be converted in full the new share structure would be as follows:



Description New Share Structure

Ordinary Shares % of total

Shares to be issued to large trade creditors 1,631,766 0.12

Existing shares in issue 146,859,000 10.61

Shares to be issued to ZCI 1,235,191,233 89.27

TOTAL 1,383,681,999 100.00


Timetable

The proposed timetable remains unchanged.

Commenting on the Financing Package, ZCI Chairman Tom Kamwendo said:

"The board of ZCI believes the amendments to the financing package allowing ACU to put the Bond back into good standing and the agreement with Senet demonstrates our determination to get Mowana back into production."

Commenting on the Financing Package, ACU's deputy Chairman Dave Jones said:

"The board of ACU are very pleased with these developments and will continue to work with ZCI to deliver a deal that provides value for all stakeholders."

About ZCI

ZCI is a Johannesburg Stock Exchange ('JSE') and Euronext (Paris) listed, Bermuda incorporated, mining investment company. ZCI previously owned 65 per cent. (subsequently sold down to 28 per cent. in 2005) of the Konkola Copper Mine ('KCM') in Zambia but sold its residual stake in 2008 and is looking to invest in Africa-based mining companies.

About ACU

ACU is an international exploration and development company incorporated in England and Wales and tri-listed on the AIM market of the London Stock Exchange, the Toronto Stock Exchange and the Botswana Stock Exchange. ACU is involved in the exploration and development of copper deposits in Botswana and is currently developing its first copper mine at the Mowana Mine and holds permits in exploration properties at the Matsitama Project. The Mowana Mine is located in the northeastern portion of Botswana and the Matsitama Project is contiguous to the southern boundary of the Mowana Mine.

Canaccord Adams Limited, which is authorised and regulated by the Financial Services Authority (the 'FSA'), is acting exclusively for ZCI and no-one else in relation to the Financing Package and will not be responsible to any person other than ZCI under the Financial Services and Markets Act 2000, the rules of the FSA or otherwise for providing the protections afforded to its clients or for any matter concerning the Financing Package or for providing advice in relation to the Financing Package or in relation to the contents of this announcement or any other transaction, arrangement or matter referred to herein. Canaccord Adams Limited can be contacted at Cardinal Place, 7th Floor, 80 Victoria Street, London SW1E 5JL.

Numis Securities Limited, which is authorised and regulated by the FSA, is acting exclusively for ACU and no-one else in relation to the Financing Package and will not be responsible to any person other than ACU under the Financial Services and Markets Act 2000, the rules of the FSA or otherwise for providing the protections afforded to its clients or for any matter concerning the Financing Package or for providing advice in relation to the Financing Package or in relation to the contents of this announcement or any other transaction, arrangement or matter referred to herein. Numis Securities Limited can be contacted at The London Stock Exchange Building, 10 Paternoster Square London EC4M 7LT.

The release, publication or distribution of this announcement into certain jurisdictions other than the United Kingdom and Canada may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of such jurisdictions.

Forward-Looking Information

This press release contains forward-looking information. All statements, other than statements of historical fact, that address activities, events or developments that may occur in the future (including, without limitation, the anticipated dilutive effect of the above transactions contemplated by the Financing Package, the anticipated stakeholder value that may result from such transactions, the proposed arrangements with ACU's creditors and bondholders and other statements which are not historical facts) are forward-looking information. Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of ACU to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, ACU. Factors that could affect the transactions described above (and ACU's future viability as a going concern) include the failure to complete the ZCI transactions as result of the non-fulfilment of the conditions precedent. All forward-looking information speaks only as of the date hereof and, except as may be required by applicable securities laws, ACU disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although ACU believes that its expectations reflected in the forward-looking information, as well as the assumptions inherent therein, are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, undue reliance should not be put on such information due to the inherent uncertainty therein.

Contact Information

  • ZCI
    John Kleynhans
    +35 24 025 05 427
    or
    iCapital (Financial Adviser to ZCI)
    Jordan Soko / Ken Muyangwa
    +260 211 256 657
    or
    Canaccord Adams Limited (Financial Adviser to ZCI)
    Robert Finlay / Mike Jones / Andrew Chubb
    +44 207 050 6500
    or
    Bridge Capital Advisors (Pty) Limited (Sponsors to ZCI)
    Pieter Veldtman / Zayd Laher
    +27 (0) 11 268 6231
    or
    College Hill (Public Relations adviser to ZCI)
    Paddy Blewer (UK)
    +44 207 457 2020
    or
    College Hill (Public Relations adviser to ZCI)
    Jacques de Bie (SA)
    +27 (0) 11 447 3030
    or
    African Copper PLC
    Chris Fredericks / Brad Kipp
    +27 (11) 467 2360 / (416) 847 4866
    or
    Numis Securities Limited
    John Harrison (Nominated Advisor) / James Black
    (Corporate Broker)
    +44 (9) 20 7260 1000