African Copper slides to a P35m loss
Boitshepo Majube | Tuesday January 7, 2014 16:49
This is a huge improvement compared with a loss of $9 million for the corresponding period last year.
African Copper chairperson David Rodier said revenues were $29,7 million, an increase of 9 percent from $27,2 million for the corresponding period last year, while operating income from mining operations was $6,5 million, an increase of 51% from $4,3 million for the corresponding period last year. This was driven by better recovery rates on sulphide ore and lower operating costs per ton.
“Administrative costs increased to $4,4 million from $3,9 million in the comparative period. The increase was primarily driven by greater salary costs, reflecting both strategic determinations related to retention and motivation, and externally imposed factors,” Rodier said.
Rodier said they incurred foreign currency exchange losses of $1,2 million, compared to $4,4 million in the previous period, arising primarily from translation differences of the US Dollar-denominated ZCI loans reflecting the relative strengthening of the Dollar to the Botswana Pula during the period.
“Interest expense of $4,9 million, comparable to the comparative period, predominantly relates to ZCI interest payable as well as associated withholding taxes,” he said.
He added that the remaining amount related to interest on a capital facility provided by the African Banking Corporation of Botswana Limited
(ABCB) and a loan provided by MRI Trading AG.
Rodier said their consolidated principal debt was $97,7 million at September 30, all of which they owed to ZCI (African Copper parent company), and they had net current liabilities of $99,2 million, up $12,8 million from their net current position of $86,4 million at March 31, 2013.
“ZCI has agreed to defer all principal and interest payments arising from our debt obligations until June 30, 2014, and has confirmed it will continue to make sufficient financial resources available to African Copper to June 30, 2014 to allow it to continue to meet its liabilities as they fall due in the course of normal operations,” he said.
However, he said the directors had not yet received confirmation from ZCI that it would extend the terms of the deferral of principal and interest and of its formal financial support beyond June 30, 2014.
Rodier further stated that its copper concentrate of 4, 937 Mt, achieved for their half-year results for the six months ending September 30, 2013 was 10 percent higher than the corresponding period from last year.
However, Rodier said this increase would have been significantly greater if not for production problems during the second half of the period, causing a 12 percent overall reduction in the volume of processed ore. “During the first three months of the period, sulphide ore constituted 92 percent of the total volume processed, and we recorded aggregate recoveries of 84 percent” he said.
Rodier noted that they subsequently experienced a shortage of high grade sulphide ore from the Thakadu pit, directly attributable to the mining contractor’s poor performance in stripping the required amounts of hanging wall waste to expose high grade sulphide ore.