ZCCM INVESTMENTS HOLDINGS PLC

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PRESS STATEMENT FOR IMMEDIATE RELEASE

ZCCM-IH Shareholders Unanimously Approve the Mopani Copper Mines Transaction

26th February 2024,

Lusaka, Zambia: ZCCM Investments Holdings Plc (ZCCM-IH) shareholders have unanimously approved the Mopani Copper Mines Plc (Mopani) transaction where Delta Mining Limited (Delta), a subsidiary of International Resource Holdings (IRH), has agreed to acquire a 51% shareholding in Mopani for a total investment of up to US$1.1 billion.
The approval was given at the Shareholder’s Extraordinary General Meeting (EGM) held in

Lusaka on 23rd February 2024.

ZCCM-IH will retain 49% shares in Mopani, with 3 out of 9 board seats (5 by Delta and 1 by GRZ), and thus continue to participate in the governance of Mopani and have full visibility of its operations.

Speaking after the EGM, ZCCM-IH Board Chairperson stated that “the transaction is a landmark achievement that delivers significant value to ZCCM-IH, Mopani, and the Zambian people, as it unlocks the long-term sustainability of Mopani operations, which contributes to the revitalisation of the Copperbelt”.

“It’s pleasing to note that IRH has committed to retain Zambian workers, including the management team, who will be complimented by new skills and expertise from Delta to facilitate the expansion of MCM production to 200, 000 tonnes per annum”, remarked Mr Muyangwa.

IRH have already proved their commitment by providing interim funding of $130m, before they take over, that has allowed continued payment to suppliers and contractors.

Further, ZCCM-IH Board Director Mr Phillippe Taussac who represents minority shareholders said that “the extinguishing of the Mopani $1.5billion debt that ZCCM-IH had guaranteed, will certainly lead to significant improved financial performance for all ZCCM-IH’s shareholders”. Mr Taussac expressed happiness that ZCCM-IH now has a strong long-term strategic equity partner in Mopani, whilst remaining a significant shareholder in the company”.

This transaction represents a major step for Zambia’s copper mining industry towards the

achievement of the country’s 3 million metric tonnes of copper production per annum by 2030.

Following the announcement of the transaction, the markets have responded positively with increased activity and share price appreciation. On the Lusaka Securities Exchange ZCCM-IH shares soared by 11.9% from K42 to K47 per share.

End

Issued by:
ORIGINAL SIGNED
Loisa Mbatha
Corporate Affairs Manager ZCCM Investments Holdings Plc loisa.mbatha@zccmnew.wpenginepowered.com

NOTE TO THE EDITOR:

SUMMARY OF SOME KEY TERMS OF THE TRANSACTION

1. Key Financial Terms:

   • Equity Component: US$620m

     • US$220m is payable at closing;
     • US$130m already advanced via interim financing shall be converted into equity
     • US$19m will be used to repay a portion of ZCCM-IH’s shareholderloan
     • The remaining US$71m will be used as working capital
     • US$400m will be allocated towards funding MCM’s project development plan and is payable as and when the funding is required

   • Loan Component: US$400m

     On closing, Delta will provide MCM with a loan of US$400m which will be used to settle all existing Glencore debt (2021 transaction debt and LCs)

     • The net result is a reduction in MCM’s debt burden by US$1.4bn
     • ZCCM-IH’s guarantee over Glencore’s debt will be releasedFurther loans of up to US$88m may be made available to MCM as shareholder loans, if required, based on the future working capital requirements

        

        

2. Significantly improved financial performance for ZCCM-IH’s shareholders

   Line item	Before	Pro Forma Adjustments	After	%change
   Earnings Per Share (EPS) (ZMW)	(23.54)	92.37	68.83	392.4%
   Headline Earnings Per Share (HEPS) (ZMW)	(23.54)	55.27	31.72	234.8%
   Net Asset Value (NAV) per share (ZMW)	49.18	94.23	143.42	191.6%

    

3. Renewal of GRZ’s golden share and one board seat.