Sunday, June 21, 2009

African Copper Plc ('ACU') and Zambia Copper Investments Limited ('ZCI') Term Loan Agreement Between ACU and ZCI

06/19/09 -- African Copper PLC (AIM: ACU)(BOTSWANA:AFRICAN COPPER) -

Zambia Copper Investments Limited
(Registered in Bermuda) - (South African registration number 1970/000023/10)

JSE share code: ZCI & ISIN: BMG988431240
Euronext share code: BMG988431240

ZCI and ACU are pleased to announce that, on 18 June 2009, they entered into a new term loan facility agreement ("Term Loan Facility") to refinance the existing bridge loan facilities ("Bridge Loans") made by ZCI to ACU's wholly owned subsidiary Messina Copper (Botswana) (Proprietary) Limited ("Messina") and which were guaranteed by the African Copper Group. The Term Loan Facility will put ACU's borrowings from ZCI onto a more permanent footing. The principal terms of the Term Loan Facility are as follows:

- The Term Loan Facility is for an aggregate amount up to US$31,129,100 which may only be used by Messina to repay the Bridge Loans.

- Tranche A of the Term Loan Facility in an amount of US$8,379,100 is convertible into ordinary shares of 1p each in ACU at a conversion price of 1p per share ("Tranche A"). The maximum aggregate number of new ordinary shares which may be issued pursuant to the conversion rights attaching to Tranche A is 556,307,263 new ordinary shares (subject to usual adjustments), which would, were Tranche A to be converted in full, increase ZCI's interest in the enlarged issued share capital of the Company from 82.16 per cent. to 89.36 per cent.

- Tranche B of the Term Loan Facility is for an amount up to US$22,750,000 and is not convertible ("Tranche B").

- Tranche A will bear interest at 12 per cent. per annum and Tranche B will bear interest at 14 per cent. per annum.

- Both Tranche A and Tranche B are repayable four years following the date upon which the Term Loan Facility becomes effective unless Messina is in default under the agreement in which event the Term Loan Facility will become immediately due and repayable.

- The Term Loan Facility will not become effective until, inter alia, the shareholders of ZCI have approved the Term Loan Agreement and the security over Messina's assets, including the Mowana Mine, has become effective. The approval of ZCI's shareholders is expected to occur in September 2009 and security is expected to become effective during July 2009.

- The Term Loan Facility contains typical covenants, warranties and events of default for an agreement of this nature.

- The Term Loan Facility has been guaranteed by ACU and all other ACU group companies.

In view of ZCI's shareholding in ACU, ZCI is considered to be a substantial shareholder under the AIM Rules and as a result is considered to be a "related party" for the purposes of the AIM Rules. The independent Directors of ACU consider, having consulted with ACU's nominated adviser, Numis Securities Limited, that the terms of the Term Loan Facility are fair and reasonable insofar as shareholders of ACU are concerned.

In view of ZCI's shareholding in ACU, ACU has also resolved to change its accounting reference date to coincide with that of ZCI. Accordingly, ACU will extend its current accounting reference period to end on 31 March 2010.

Commenting on the Term Loan Facility, ACU's deputy Chairman Dave Jones said:

"I am delighted that we have agreed terms with ZCI to put our loan facilities onto a more permanent footing, and look forward to working with ZCI to bring the Mowana Mine back into production."

Commenting on the Term Loan Facility, ZCI Chairman Tom Kamwendo said:
"ZCI is pleased to have concluded the last major outstanding agreement in its deal with ACU. The Term Loan Facility puts ACU on a financially stable footing and allows ZCI and ACU to focus all of their efforts on bringing the Mowana mine back into production."

ZCI - John Kleynhans: +35 24 025 05 427
Capital (Financial Adviser to ZCI) Jordan Soko/ Ken Muyangwa: +260 211 256 657
Canaccord Adams Limited (Financial Robert Finlay/ Mike Jones/ Adviser to ZCI) Andrew Chubb: +44 207 050 6500
Bridge Capital Advisors (Pty) Limited (Sponsors to ZCI) Pieter Veldtman/ Zayd Laher +27 (0) 11 268 6231
College Hill (Public Relations adviser to ZCI)
Paddy Blewer (UK): +44 207 457 2020
Jacques de Bie (SA): +27 (0) 11 447 3030
African Copper PLC Chris Fredericks/ Brad Kipp +27 (11) 467 2360/(416) 847 4866
Numis Securities John Harrison (Nominated Advisor)/ Limited: James Black (Corporate Broker) +44 (9) 20 7260 1000

About ZCI
ZCI is a Johannesburg Stock Exchange ('JSE') and Euronext (Paris) listed, Bermuda incorporated, mining investment company. ZCI previously owned 65 per cent. (subsequently sold down to 28 per cent. in 2005) of the Konkola Copper Mine ('KCM') in Zambia but sold its residual stake in 2008 and is looking to invest in Africa-based mining companies.

About ACU
ACU is an international exploration and development company incorporated in England and Wales and dual-listed on the AIM market of the London Stock Exchange and the Botswana Stock Exchange. ACU is involved in the exploration and development of copper deposits in Botswana and is currently developing its first copper mine at the Mowana Mine and holds permits in exploration properties at the Matsitama Project. The Mowana Mine is located in the northeastern portion of Botswana and the Matsitama Project is contiguous to the southern boundary of the Mowana Mine.