8th September 2005
COPPER RESOURCES CORPORATION
("CRC" or "the Company")
COPPER RESOURCES CONCLUDES MOU TO ACQUIRE MMK IN DRC TO BECOME PRODUCER AT 5.3%
COPPER KINSENDA DEPOSIT NEAR ZAMBIAN BORDER
Copper Resources Corporation (AIM: "CRC") has entered into a Memorandum of
Understanding to acquire 75% of Minière Musoshi Kinsenda (MMK) which holds
three deposits in the south of Katanga Province of the Democratic Republic of
Congo (DRC), located near the Zambian border as follows:
Deposit Tonnes Billions Grade Meters
Pounds Drilled
Kinsenda 840,000 1.9 5.3% 66,000
Musoshi 580,000 1.3 2.4% 30,000
Lubembe 1,000,000 2.2 2.2% 12,000
Total 2,420,000 5.3
With this acquisition CRC will immediately embark on a US$5 million dewatering
program of the Kinsenda mine where production is expected to commence within 18
months. Kinsenda will produce 40,000 tonnes per annum of copper content in the
form of a rich, 45% concentrate from the high-grade 5.3% ore body. In the
interim CRC will produce 4,000 tonnes per annum of copper matte (95% copper
content) by treating existing ore stockpiles through the Musoshi arc furnace
that is currently in operation.
The Kinsenda and Musoshi properties were mined in 1968-1983 by a Japanese
mining consortium and by Canadian management on behalf of the Zairian
government from 1983-1987, and subsequently by Gecamines, a Congolese state
mining company; and are now owned by MMK, which is held 20% by SODIMICO, a
Government company, and 80% by the Forrest Group, the largest private business
in Katanga and one of the largest in Congo with extensive diversified
operations including mining, engineering, construction, cement. Having operated
successfully in Congo since 1922, the Forrest Group has extensive operational
and management experience in the country that will support and facilitate CRC's
effort in developing the properties.
In exchange for the 75% shareholding in MMK, CRC will issue 18,504,400 new
shares so that the Forrest Group will become the largest shareholder of CRC
with a 40% stake in the Company. Mr. George Forrest, Chairman of the Forrest
Group, said: "We look forward to developing our cooperation with CRC in the
context of a public company that could become the vehicle for other extensive
mining operations in the future."
The MMK acquisition is attractive as it represents 5.3 billion pounds of
contained copper at a cost 1/5th of a US cent per pound of copper.
Kinsenda and Musoshi are both currently flooded and will require a dewatering
program prior to bringing them back into operation. Lubembe is a green field
exploration property with high potential. All three deposits have been drilled,
Musoshi and Kinsenda extensively and Lubembe not to the same degree.
At Musoshi there is a plant which includes crushers, grinders, floatation tanks
and an ore concentrator with the capacity 2,500 tpd. The equipment will need to
be refurbished prior to commencing operations.
In addition the area has extensive infrastructure including roads, water, staff
accommodation and power. The power infrastructure includes a 220/110Kva line to
both Kinsenda and Musoshi. There is also a substation at Musoshi with
generators for back up if required.
The program would be to start production at Kinsenda in 6-9 months post the
de-watering of the mine itself. Initial indications are that it will cost in
the order of $5 million to complete the de-watering of the mine and US$30
million to refurbish and regenerate the underground mine and Musoshi
concentrator.
Sir Sam Jonah, CRC Non-executive Chairman stated: "The MMK acquisition offers
an exceptional opportunity to for CRC to become a long-term producer with world
class deposit in partnership with the Forrest Group who have been active in the
Congo are the premier private group in the country."
For further information please contact:
Copper Resources Nabarro Wells & Co. Westhouse Securities
Mitchell Alland Keith Smith Richard Morrison
Executive Vice Chairman
+44 (0)787 569 5563 +44 (0)20 7710 7400 +44(0) 20 7601 6100
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