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African Eagle ponders a Lusaka listing
Allan Seccombe
Posted: Fri, 25 Jul 2008
[miningmx.com] -- AFRICAN Eagle could apply for a listing in Lusaka to raise funds towards its 49% owned Mkushi copper project in Zambia, or it could bring Zambia Consolidated Copper Mines (ZCCM) in as a financier, reducing its own stake in the venture.
Mkhushi, which is just outside the copper belt, is African Eagle’s most advanced project. It has three other copper exploration projects in Zambia and a gold project in Tanzania.
The AIM-traded African Eagle, which is also listed on the JSE's AltX exchange, is hunting for partners at its Ndola project and its Eagle Eye iron oxide, copper, gold prospect.
Freeport McMoRan’s subsidiary Phelps Dodge Mining (Zambia) (PDMZ) decided not to pursue exploring the Ndola copper prospect, leaving African Eagle with sole ownership.
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There have been visitors to both projects, said Chris Davies, African Eagle’s operations director. “Now that we have identified targets we can cut a better deal with other companies,” he said, adding major firms as well as some groups already involved in copper projects in Zambia had shown an interest.
One of the priorities is the raising of capital towards Mkushi, which will cost up to $70m to bring into production. The partner on the project is Australia’s CGA Mining, which will
lead the fund raising.
“We are looking at the possibility of listing African Eagle in Lusaka, which will give Zambians the chance to invest in the Mkushi project,” Davies said.
An alternative might be to allow ZCCM to invest directly in the project, trimming African Eagle’s stake, he said.
Talks on financing the project will begin in earnest once the reserves are established in August towards a bankable feasibility study in November.
The project will clear the higher hurdle rates set by new tax rates imposed by the Zambian government earlier this year on mines. A February 2008 pre-feasibility study shows the six-year life-of-mine will recover 208 million pounds of copper, having a capital payback period of 2.5 years. More drilling has upped the life to nine years.
Talks with power suppliers in Zambia have started and Neil Seldon & Associates have been engaged to assist in preliminary concentrate off-take agreements in Zambia.
Production could start in 2010.
The second most advanced project is Mokambo on Zambia’s copper belt. Mokambo is equally held between African Eagle and the private Copperbelt Minerals mining company, which is busy with projects in neighbouring Democratic Republic of Congo.
The first phase of drilling twinning holes and more on-strike holes will be completed in the “next few weeks”, said Davies. A decision would then be taken on starting a pre-feasibility study.
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