Kansanshi smelter exceeds its Q1 target. Owned by ZCCM-IH & FQM

LUSAKA, ZAMBIA – First Quantum Minerals has recorded a 39 per cent increase in production at its Sentinel mine in the first quarter of 2018, compared with the same period of last year.

While the company’s Kansanshi smelter at Solwezi exceeded its target for the quarter, with 350,591 tonnes of concentrate processed.
The mining firm has also reported comparative earnings of US$49 million, even after a US$121 million loss realised under a programme to hedge copper sales, for which no tax credit is available.

“We are pleased with the quarter’s results in all aspects of the company. The solid performances at our Zambian operations are of particular note considering the severity of the seasonal rains,” noted FQM Chairman and CEO Philip Pascall, after the company released its first quarter 2018 financial and operating results on Thursday.

In executing several proactive measures to strengthen the balance sheet and improve liquidity, the global mining company FQM  ended the quarter with US$810 million in net unrestricted cash and cash equivalents, US$1,670 million of committed undrawn facilities and in full compliance with all financial covenants.

The mining firm has also put in place a new US$400 million five-year term facility agreement in the subsidiary that owns the Sentinel mine. Repayments are scheduled to start in December 2019.

The mining firm also completed a US$1.85 billion senior note programme, which will be used to repay an existing term loan facility, the outstanding balance on a revolving credit debt facility, fees associated with the offering and for general corporate purposes.

“With the reduction in our copper forward sales contracts, the value of maintaining our capital investment programme through a challenging economic environment is becoming more visible. The significant turnaround in our financial results from a year ago is indicative of First Quantum’s enhanced earnings and cash generating capability. This is expected to grow substantially when Cobre Panama begins commercial operations,” said Mr Pascall, referring to the company’s massive US$5.48 billion Cobre Project in Panama, which will become one of the largest copper mines in the world.

“While we had several successes in the quarter, we also had a few challenges. Such occurrences are not unexpected in the resource industry with the onset of improved commodity prices and sentiment. While this can be momentarily distracting, these matters do get resolved through open discussion and transparency which we are committed to,” Mr. Pascall concluded.


About First Quantum Minerals Ltd
First Quantum Minerals Ltd is a global metals and mining company producing mainly copper, gold, nickel and zinc. The company’s assets are located in Zambia, Spain, Mauritania, Australia, Finland, Turkey, Panama, Argentina and Peru.
In 2017, First Quantum produced 573,963 tonnes of copper, 199,736 ounces of gold and 17,837 tonnes of nickel.
In Zambia it operates the Kansanshi mine – the largest copper mine in Africa – and smelter and the Sentinel mine in Kalumbila.
The company is listed on the Lusaka and Toronto stock exchanges.


ZCCM-IH Zambia’s profit after tax up 480% to K510 million for Half Year 2019

We have extracted the financial summary from the interim report of ZCCM Investments Holdings PLC, listed on the Lusaka Securities Exchange under the share code ZCCM.zm. ZCCM Investments is a diversified holdings company holding interests in the fields of energy and mining amongst others. The following is an excerpt from the interim report; Financial Performance “The Group recorded a turnover of K67.5 million for the six-month period ended 30th September 2018 which represents 80% over the turnover of K37.5 million reported during the six months to 30th September 2017. The increase is mostly on account of the consolidation of Investrust Bank following the Group’s increase in the Bank’s shareholding to 71.4%. The Group recorded an operating loss of K222 million (Sept 2017: loss K123 million) and received dividends of K44.8 million from Kansanshi Mining Plc (September 2017: Nil). The Group’s share of profit in associate companies was K437.5 million (September 2017: K227.3 million). The performance of the associate companies has continued to improve due to continued increase in demand for copper on the world market resulting in increased copper prices. Overall the Group recorded an after-tax profit of K510 million (September 2017: K87.8 million). Operations and Strategic developments Ndola Lime Company Limited In September 2018, Two (2) former employees of Ndola Lime Company Limited (NLC) instituted proceedings in the High Court of Zambia to place NLC under supervision pursuant to the Corporate Insolvency Act No. 9 of 2017. By order of the Court dated 5th October 2018, the Official Receiver was appointed as Interim Business Administrator of NLC. The application for the Business Rescue Proceedings will be heard in January 2019 at which all affected persons (including ZCCM-IH) will be heard. Investrust Bank Plc In April 2018, ZCCM-IH conducted a Mandatory Offer to purchase shares from all other minority shareholders in Investrust Bank Plc (Investrust) in accordance with Rule 56 of the Third Schedule of the Securities (Takeovers and Mergers) Rules, Statutory Instrument No 170 of 1993, issued pursuant to the Securities Act, Chapter 354 of the Laws of Zambia, now repealed and replaced by the Securities Act No 41 of 2016, (the “Securities Act”). The Mandatory Offer culminated into ZCCM-IH acquiring an additional 2,125,890 shares, representing a 26.0% shareholding in Investrust; ZCCM-IH effectively increased its shareholding from 45.4% to 71.4%. Subsequent to increasing its shareholding in Investrust, ZCCM-IH has committed to recapitalise and drive strategic performance improvements of the Bank. Cement Manufacturing Project During the period under review, ZCCM-IH signed a Shareholders’ Agreement with China Machinery Construction Group Limited (SinoConst) for the development of a cement plant to be located in Masaiti District in the Copperbelt Province of Zambia under the incorporated Special Purpose Vehicle, Central African Cement Limited. CBMI Construction Co., Limited (Sinoma) has been engaged as the Engineering, Procurement and Construction (EPC) Contractor for the project once it reaches financial close. Tailings Reprocessing In June 2018, ZCCM-IH and Horizon Mining Limited executed a Shareholders Agreement relating to the incorporated Joint Venture Company, Copper Tree Minerals Limited (Copper Tree), in which ZCCM-IH and Horizon Limited each have shareholdings of 15.58% and 84.42% respectively. Copper Tree was established to reprocess material at Tailing Dams 25, 26 and 27 located in Kitwe. Oil Exploration ZCCM-IH obtained licenses for two oil blocks situated in the Western and Muchinga provinces of Zambia. In order to undertake exploratory works on these oil blocks ZCCM-IH entered into a partnership with Oranto Petroleum (Oranto), where ZCCM-IH farmed out a 90% participating interest on the oil blocks to Oranto and retained 10%. Under the partnership, Oranto will fully fund all exploratory activities and development works as well as provide technical support for the project. Mushe Milling Limited As part of ZCCM-IH’s strategic intent to participate in the agriculture, agri-business or agro-processing [sub] sectors, ZCCM-IH began discussions regarding the potential acquisition of Mushe Milling Limited (Mushe), a maize milling company located in Lusaka. The opportunity to acquire Mushe has been assessed and discussions have reached an advanced stage with the terms and conditions of the transaction close to finalisation. Real Estate/Property During the period under review ZCCM-IH expressed interest to invest in the development and purchase of Leopards Square, a mixed commercial property with a unique tenant mix. The opportunity would allow for ZCCM-IH to invest into this property through the purchase into the capital structure of the property at pre-development stage and earn an enhanced return due to development profits/savings. This transaction is nearing finalization, upon completion of a Subscription Agreement and a Shareholders Agreement. ZCCM-IH also acquired Village Villas Complex in Roma area in Lusaka pursuant to its strategy in investment property. Silica Sand Mining and Glass Manufacturing During the period under review ZCCM-IH placed a formal offer to acquire the assets held by Kapiri Glass Manufacturing Company (2008) Limited (In Receivership), including the mining rights to the primary silica sand deposit in Kapiri Mposhi. However, the transaction has not been completed or finalised, as an injunction has been placed against to halt any further progression on the transaction due to legal action taken against the Kapiri Glass Manufacturing Company (2008) Limited (In Receivership). Kariba Minerals Limited Subsequent to the period under review, ZCCM-IH acquired an additional 50% shareholding in Kariba Minerals Limited from Gemfields Limited at a total consideration of US$2.5 million. The completion of the transaction is subject to regulatory approvals. Going forward, ZCCM-IH will implement a robust strategic plan aimed at improving production, processing and marketing activities in order to increase profitability of the mine.”
Source: African Financials

ZCCM-IH | Further Cautionary Renewal

ZCCM Investments Holdings PLC (“ZCCM-IH”) Files a Notice of Arbitration against Kansanshi Holdings Limited and Kansanshi Mining PLC.

On 26 October 2016, ZCCM-IH filed a Notice of Arbitration in London against Kansanshi Holdings Limited and Kansanshi Mining PLC for various Claims arising from transactions between Kansanshi Mining Plc and FQM Finance Limited. ZCCM-IH applied to the Arbitral Tribunal to bring a derivative claim on behalf of Kansanshi Mining PLC which application was heard on 10-12 January 2018.

Further to the Cautionary Renewal released by ZCCM-IH on 6th February 2018, regarding these matters and in compliance with the requirements of the Securities Act No 41 of 2016 and the General Obligations of Disclosure under the Continuing Obligations of the Listings Requirements of the Lusaka Securities Exchange, shareholders are informed that on 22nd February the Tribunal denied ZCCM-IH permission to bring its proposed derivative claim on behalf of Kansanshi Mining PLC.

On 22nd March 2018, following the award denying permission, ZCCM-IH filed an Arbitration Claim in the Commercial Court in London applying to challenge the award dated 22nd February 2018.

Shareholders of ZCCM-IH are accordingly advised to exercise caution when dealing in securities of the Company until further information is published.

By Order of the Board
Chabby Chabala
Company Secretary

Issued in Lusaka, Zambia on Tuesday, 10th April 2018

Lusaka Securities Exchange Sponsoring Broker
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First Issued on 1 November 2016