Mining Title Licence Review

RNS Number : 9225M

Copper Resources Corporation

06 February 2009

 



For immediate release                                                                                                6 February 2009

Stock Exchange Announcement

 COPPER RESOURCES CORPORATION

Mining Title Licence Review

Copper Resources Corporation ('CRC' or the 'Company') has concluded negotiations with the authorities in the Democratic Republic of Congo ('DRC') with respect to their title review process, specifically with respect to Miniere de Musoshi et Kinsenda ('MMK'). The agreement between Societe de Developpement Industriel et Miniere du Congo ('Sodimico'), CRC and Metorex, as approved by the DRC Government confirms the following:

• The revised shareholding of 23% non-dilutable for Sodimico (up from 20%) and 72.15% for CRC (down from 75%);

• Pas de porte payments to the amount of US$3 million over several instalments to 2011; and

• Royalties at 2.5% on gross revenue. 

The commercial aspects relating to the MMK revisitation process are as follows:

Commercial Aspect	Original Agreement	Revised Agreement
Shareholding	Metorex/CRC held a combined 80% interest in MMK and Sodimico held a 20% interest in MMK.	Metorex/CRC hold a combined 77% interest in MMK, the balance of 23% held by Sodimico.
Mineral Content Fee	Nil	A US$3million mineral content fee of US$3 million is payable as follows: US$500,000 payable on signature. A Further US$500,000 one month later and a further US$500,000 one month thereafter. In addition, a payment of US$500,000 to be made on 31 December 2009, 2010 and 2011.
Royalty	A royalty of 2.5% on gross revenue.	A royalty of 2.5% payable by MMK to Sodimico on gross revenue.

In addition to the above commercial aspects, it was agreed that the Musoshi Mine surface and underground infrastructure be returned to Sodimico together with certain equipment that had been transferred to Kinsenda Mine that was not in use at Kinsenda Mine. Compensation would be paid on a fair value basis for any equipment removed from Musoshi Mine to Kinsenda Mine that had been applied to the Kinsenda mining operations.

The power supply to Musoshi and Kinsenda is channelled through the Kasumbalesa Substation, which substation will require upgrading on the development of the Kinsenda Mine for which MMK has undertaken to finance the upgrade and recover the cost thereof from Sodimico on a basis to be agreed. This upgrade will only occur once the full scale development of the Kinsenda mine commences.

As announced on 6 February 2008, the Company has significantly scaled back the development of the Kinsenda mine on a temporary basis.  

The Company is focused primarily on establishing a financing package for the development of the Kinsenda Mining Project, which has a measured resource at grade of approximately 5% Copper. The life of mine is approximately 15 years at a milling rate of approximately 80,000 tons per month. 

In addition, approximately 13,000 metres of exploration drilling has taken place on the Lubembe deposit during 2008. The results are being evaluated and will be taken to a scoping study and/or pre-feasibility study during the forthcoming period of 12 months, subject to arranging appropriate financing.

The Kinsenda Mine has been dewatered to approximately Level 290 which is below the initially planned production levels. Dewatering and general care and maintenance will continue pending securing adequate financing for the development of the project. The metallurgical plant design has been completed by MDM and certain site establishment and civil work has been completed. Once the financing of up to US$200 million has been established, the project will be accelerated and could commence production of copper concentrate within a period of 18 months thereafter.

Charles Needham said: 'The Kinsenda Mine has a world class ore resource and has existing infrastructure being roads, power and water supply and underground development which is poised to commence production once suitable financing has been secured.

The outcome of the Revisitation process is considered to be equitable to both our company and Sodimico.'

Enquiries:

Copper Resources Corporation	Ambrian Partners Limited	GTH Communications
Robert Fischer Non-executive Director	Richard Brown Harry Stockdale	Toby Hall
+ 32 475 242 825	+44 (0) 20 7 634 4700	+44 (0) 20 7153 8035

 

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