AFRICAN COPPER PLC
UNAUDITED CONSOLIDATED FINANCIAL INFORMATION
Three Months ended 31 March 2007
Expressed in Pounds Sterling
The accompanying Financial Information for the three months ended 31 March 2007 and 31 March 2006 have not been
reviewed or audited by the Company's Auditors and has an effective date of 14 May 2007.
African Copper Plc
Consolidated Income Statement
(Unaudited)
Three Months ended
31 March
2007 2006
Note �'000 �'000
Administrative expenses (568) (242)
Share based expenses (222) (4)
Depreciation (16) -
Exchange loss (77) -
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Operating loss (883) (246)
Finance income
Bank interest receivable 704 92
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Loss before and after tax (179) (154)
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Basic and diluted loss per ordinary share 0.14p 0.30p
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The accompanying notes are an integral part of these consolidated financial statements.
African Copper Plc
Consolidated Balance Sheets
As at As at
31 March 31 December
(unaudited) audited
2007 2006
Note �'000 �'000
ASSETS
Property, plant and equipment 2 17,279 13,964
Deferred exploration costs 3 2,367 2,007
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Total non-current assets 19,646 15,971
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Other receivables and prepayments 485 648
Cash and cash equivalents 49,251 53,254
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Total current assets 49,736 53,902
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Total assets 69,382 69,873
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EQUITY
Issued share capital 5 1,312 1,305
Share premium 70,000 69,844
Acquisition reserve 4,485 4,485
Foreign currency translation reserve (2,792) (1,979)
Retained losses (5,538) (5,687)
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Total equity 67,467 67,968
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LIABILITIES
Trade and other payables 1,915 1,905
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Total current liabilities 1,915 1,905
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Total equity and liabilities 69,382 69,873
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The accompanying notes are an integral part of these consolidated financial statements.
The comparative information has been restated in accordance with IFRS.
African Copper Plc
Consolidated Statement of Changes in Shareholders' Equity
Foreign
Currency
Share Share Acquisition Translation Retained Total
Note Capital Premium Reserve Reserve Loss Equity
�'000 �'000 �'000 �'000 �'000 �'000
Balance at 1 January 2005 500 15,157 4,485 - (4,475) 15,667
Foreign exchange adjustments - - - (315) - (315)
Loss for the year - - - - (612) (612)
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Total recognised loss for the year - - - (315) (612) (927)
New share capital subscribed 20 1,001 - - - 1,021
Credit arising on share options - - - - 508 508
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Balance at 31 December 2005 520 16,158 4,485 (315) (4,579) 16,269
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Foreign exchange adjustments - - - (1,664) - (1,664)
Loss for the year - - - - (2,100) (2,100)
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Total recognised loss for the year - - - (1,664) (2,100) (3,764)
New share capital subscribed 785 58,702 - - - 59,487
Share issue costs - (5,016) - - - (5,016)
Credit arising on share options - - - - 992 992
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Balance at 31 December 2006 1,305 69,844 4,485 (1,979) (5,687) 67,968
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Foreign exchange adjustments - - - (813) - (813)
Loss for the period - - - - (179) (179)
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Total recognised loss for the period - - - (813) (179) (992)
New share capital subscribed 7 156 - - - 163
Credit arising on share options - - - - 328 328
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Balance at 31 March 2007 1,312 70,000 4,485 (2,792) (5,538) 67,467
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The accompanying notes are an integral part of these consolidated financial statements.
The comparative information has been restated in accordance with IFRS.
African Copper Plc
Consolidated Cash Flow Statement
Three months ended
31 March
2007 2006
Note �'000 �'000
Cash flows from operating activities
Administration expenses (568) (242)
Share based expenses (222) (4)
Depreciation (16) -
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Operating loss from continuing operations (806) (246)
Decrease/(increase) in receivables 163 (618)
Decrease/(increase) in payables 9 (442)
Share based payment expense 222 4
Depreciation 16 -
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Cash used in operating activities (396) (1,302)
Interest received 704 92
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Net cash inflow/(outflow) from operating activities 308 (1,210)
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Cash flows from investing activities
Payments to acquire property, plant and equipment (3,957) (8)
Payments of deferred exploration expenditures (440) (1,533)
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Net cash outflow from investing activities (4,397) (1,541)
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Cash flows from financing activities
Issue of equity upon exercise of warrants - 52
Issue of equity upon exercise of options 163 -
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Net cash inflow from financing activities 163 52
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Net decrease in cash and cash equivalents (3,926) (2, 699)
Cash and cash equivalents at beginning of the period 53,254 10,676
Exchange loss (77) -
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Cash and cash equivalents at end of the period 49,251 7,977
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The accompanying notes are an integral part of these consolidated financial statements.
1. Nature of operations, going concern and adequacy of project finance
African Copper Plc ("African Copper" or the "Company") is a public limited company incorporated and domiciled in
England and is listed on the AIM market of the London Stock Exchange, the Toronto Stock Exchange and the
Botswana Stock Exchange. African Copper is a holding company of a mineral exploration and development group of
companies (the "Group"). The Group is involved in the exploration and development of copper deposits in
Botswana and is currently developing its first copper mine at the Dukwe Project and is conducting an exploration
programme at the Matsitama Project. The Dukwe Project is located in the northeastern portion of Botswana and
the Matsitama Project is contiguous to the southern boundary of the Dukwe Project.
The accompanying interim consolidated financial information is prepared by management in accordance with
International Financial Reporting Standards ("IFRS") and its interpretations adopted by the International
Accounting Standards Board ("IASB") which are the same as those adopted by the European Union and with parts of
the Companies Act 1985 applicable to companies reporting under IFRS. This interim consolidated financial
information has been prepared on the basis of a going concern, which contemplates the realization of assets and
settlement of liabilities in the normal course of business as they come due. The Company has not reached
commercial production. The Company is continuing the development of the Dukwe Project, including finalizing the
mine plan by incorporating the results of the recent infill drilling programme into the pit optimization study
and accelerating development work, including entering into a mining contract. At such time as the mine plan is
completed the capital cost of the Dukwe Project will be finalized and the additional capital requirements will
be determined. In anticipation of the Company's future working capital requirements, the Company has engaged
Standard Bank Plc to arrange a proposed US$25 million working capital revolving credit facility and related
hedging facility.
The strategy contemplates cashflow generated from the proposed mining operations at the Dukwe Project to
continue funding further exploration and development of the Matsitama Belt. The Company's ability to continue as
a going concern is ultimately dependent on the final capital cost of the Dukwe Project, its ability to fund
additional working capital and obtain additional financing to complete the Dukwe Project and, eventually, to
generate positive cashflows from mining operations. These financial statements do not reflect the adjustments
to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications
that would be necessary were the going concern assumption inappropriate, and these adjustments could be
material.
The accounting policies and methods of computation used in the preparation of the unaudited consolidated
financial information are the same as those described in the Company's audited consolidated financial statements
and notes thereto for the year ended 31 December 2006. In the opinion of management, the accompanying interim
financial information includes all adjustments considered necessary for fair and consistent presentation of
financial statements. These interim consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements and notes for the year ended 31 December 2006.
The financial information for the twelve months ended 31 December 2006 has been derived from the Group's audited
financial statements for the period as filed with the Registrar of Companies. It does not constitute the
financial statements for that period. The auditors' report on the statutory financial statements for the year
ended 31 December 2006 was unqualified and did not contain any statement under Section 237(2) or (3) of the
Companies Act 1985.
2. Property, Plant and Equipment
Mine Mine Plant and
Development and Equipment Other Total
Infrastructure Assets
�'000 �'000 �'000 �'000
Cost
Balance at 1 January 2005 - - 28 28
Additions - - 134 134
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Balance at 31 December 2005 - - 162 162
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Balance at 1 January 2006 - - 162 162
Reclassification from Deferred Exploration 10,395 241 - 10,636
Additions 3,322 146 337 3,805
Exchange adjustments (458) - (32) (490)
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Balance at 31 December 2006 13,259 387 467 14,113
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Balance at 1 January 2007 13,259 387 467 14,113
Additions 3,551 - 170 3,721
Exchange adjustments (389) (13) (14) (416)
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Balance at 31 March 2007 16,421 374 623 17,418
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Depreciation and impairment losses
Balance at 1 January 2005 - - - -
Depreciation charge for the year - - (42) (42)
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Balance at 31 December 2005 - - (42) (42)
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Balance at 1 January 2006 - - (42) (42)
Depreciation charge for the year - - (115) (115)
Exchange adjustments - - 8 8
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Balance at 31 December 2006 - - (149) (149)
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Balance at 1 January 2007 - - (149) (149)
Depreciation charge for the year - - (19) (19)
Exchange adjustments 29 29
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Balance at 31 March 2007 - - (139) (139)
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Carry amounts
Balance at 1 January 2005 - - 28 28
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Balance at 31 December 2005 - - 120 120
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Balance at 31 December 2006 13,259 387 318 13,964
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Balance at 31 March 2007 16,421 374 484 17,279
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3. Deferred exploration costs
�'000
Cost
Balance at 1 January 2005 2,330
Additions 5,144
Exchange adjustments (315)
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Balance 31 December 2005 7,159
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Additions 6,175
Exchange adjustments (691)
Reclassification to Mine Development and Infrastructure (10,636)
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Balance 31 December 2006 2,007
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Additions 463
Exchange adjustments (103)
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Balance 31 March 2007 2,367
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4. Related party transactions
The Company had related party transactions with companies in which directors of the Group have an interest and these
transactions were incurred in the normal course of operations and are recorded at their exchange amount.
(a) Under the terms of a serviced offices agreement which expired on 28 February 2007, �11,750 (2006 - �17,625)
was paid to the Dragon Group, a company controlled by A.J. Williams, a director of the Company, to provide fully
serviced office accommodation in the UK and reimbursed expenses. At 31 March 2007 a balance of �nil (2006 -
�11,825) was outstanding.
(b) Under the terms of a serviced offices agreement, �20,867 (2006 - �18,618) was paid to the Summit Resource
Management Limited, a company controlled by D. Jones, a director of the Company, to provide fully serviced office
accommodation in Canada, bookkeeping infrastructure and reimbursed expenses. At 31 March 2007 a balance of �2,620
(2006 - �nil) was outstanding.
(c) The Company entered into an agreement with Pickax International Corp. ("Pickax") and Joseph Hamilton on 1 July
2006, pursuant to which Pickax agreed to cause Joseph Hamilton to provide services to the Company, in the capacity
as Chief Operating Officer. The agreement replaced an existing executive services agreement on materially the
same terms and conditions. During the term of the agreement Pickax will be paid �164,800 per year. The Company
was charged �41,200 (2006 - �nil) during the three months ended 31 March 2007 by Pickax. Pickax is a corporation
controlled by Joseph Hamilton, the Chief Executive Officer and a director of the Company. The agreement will be
amended to reflect Mr. Hamilton's appointment as Chief Executive Officer of the Company.
5. Share Capital
No. of shares �'000
Authorised:
At 31 December 2005 and 31 December 2006
Ordinary shares of 1p each 495,000,000 4,950
Redeemable preference shares of �1each 50,000 50
Issued:
Balance at 1 January 2005 49,992,173 500
Ordinary shares issued on exercise of warrants 2,040,982 20
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Balance at 31 December 2005 52,033,155 520
Ordinary shares issued on June 2006 placement 75,000,000 750
Ordinary shares issued on exercise of warrants 2,474,030 25
Ordinary shares issued on exercise of options 1,000,000 10
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Balance at 31 December 2006 130,507,185 1,305
Ordinary shares issued on exercise of options 700,000 7
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Balance at 31 March 2007 131,207,185 1,312
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Shares issued
During 2006, a total of 78,474,030 ordinary shares were issued for net cash consideration of �53,641,555 from the
following:
(i) public placement that raised gross proceeds of �57.96 million, through the issuance of 34,375,000
ordinary shares of 1p at 77.5p per share and 40,625,000 ordinary shares of 1p at Can$1.60 per share. The
net proceeds of the offering were �52.9 million after deducting a 6% cash commission to the underwriters of
�3.48 million plus various professional fees and stamp duty reserve tax costs related to the offering.
(ii) exercise of 2,474,030 warrants to purchase ordinary shares of the Company at 52.5p each.
(iii) exercise of 900,000 share options to purchase ordinary shares of the Company at Can$0.25 each and 100,000
share options to purchase ordinary shares of the Company at 35p each. These share options were options
originally granted under the Mortbury Limited option plan.
On 29 March 2007 a total of 700,000 ordinary shares were issued for net cash consideration of �163,961 from the
exercise of 350,000 share options to purchase ordinary shares of the Company at Can$0.25 each and 350,000 share
options to purchase ordinary shares of the Company at 35p each. These share options were options originally granted
under the Mortbury Limited option plan.
6. Share purchase warrants
Number of Warrants Number of Warrants
at at Date of Grant Subscription Price Exercise Period
31 March 2007 31 March 2006
- 2,374,030 26 May 2004 �0.525 from admission 1 until up to 3 years
two years following admission following
date. �0.70 from that date admission.
until three years following
admission date.
1. Admission to the Alternative Investment Market of the London Stock Exchange at November 12, 2004.
7. Share based payments
African Copper has established a share option scheme with the purpose of motivating and retaining qualified
management and to ensure common goals for management and the shareholders. Under the African Copper share plan
each option gives the right to purchase one African Copper ordinary share. For options granted the vesting
period is generally up to three years. If the options remain unexercised after a period of 10 years from the
date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the Company.
As part of the acquisition of Mortbury Limited, the Company agreed to grant options in the Company on the same
basis as the Mortbury options outstanding on the date of acquisition. No further options will be granted under
the Mortbury share scheme. At 31 March 2007 all Mortbury options had been exercised.
As part of admission to the AIM market of the London Stock Exchange, the Company issued its Nominated Advisor an
option to subscribe for 499,872 ordinary shares at a price of 83.6p (the "Underwriters Options") for two years
following 12 November 2004 (date of admission) and at a price of 91.2p for the third year of the exercise period.
As at 31 March 2007, ordinary share options held by directors and employees were as follows:
Outstanding Exercisable
Weighted average
remaining contractual
Exercise price Number of Options life (years) Number of
(�) options
0.35 500,000 7.48 333,333
0.76 2,630,000 7.86 2,523,334
0.775 8,560,000 9.40 3,228,000
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11,690,000 6,084,667
During the periods ended 2007 and 2006, director and employee stock options were granted, exercised and cancelled
as follows:
Weighted average Options
exercise price
in � per share
At 1 January 2006 0.56 5,160,000
Granted 0.775 8,660,000
Exercised 0.14 (1,000,000)
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At 31 December 2006 0.74 12,820,000
Granted 0.775 200,000
Forfeited 0.77 (630,000)
Exercised 0.23 (700,000)
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At 31 March 2007 0.77 11,690,000
The exercise of the outstanding stock options would be anti-dilutive in the loss per share calculation.
The fair value of 200,000 options granted during the three months ended 31 March 2007 (31 March 2006 - nil) has
been estimated at the date of grant using a Black-Scholes option pricing model. The current period's valuation
was calculated with the following assumptions: weighted average risk-free rate of 4.5% (31 March 2006 - 4.5%);
volatility factor of the expected market price of the Company's common stock of 34% (31 March 2006 - 60%); and a
weighted average expected life of the options of 5 years (31 March 2006 - 5 years). The resulting weighted
average cost per option granted was 21.2p (31 March 2006 - 27p). The estimated fair value of the options is
amortized over the vesting period and expensed to the Consolidated Income Statement or capitalized to property,
plant and equipment and/or deferred exploration costs on the consolidated Balance Sheet.
8.Segmented Information
The Company has one operating segment: the acquisition, exploration and development of base metal projects
located in Botswana.
31 March 31 December
2007 2006
�'000 �'000
Capital expenditure on property, plant and equipment:
Botswana 3,715 3,805
United Kingdom 6 -
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3,721 3,805
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Capital expenditure on deferred exploration:
Botswana 450 5,825
United Kingdom 13 350
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463 6,175
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9. Commitments
The following is a summary of contractual commitments of the Company including payments due in the next
three years and thereafter.
Total 2007 2008 2009 2010
�'000 �'000 �'000 �'000 �'000
Goods, services and long lead equipment 10,302 10,302 - - -
(a)
Mining contract (b) 3,349 3,349
Matsitama exploration licences (c) 1,076 294 375 326 81
Lease agreements (d) 231 109 109 13 -
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14,958 14,054 484 339 81
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(a) The Company and its subsidiaries have a number of agreements with arms-length third parties who provide
a wide range of goods and services and long-lead time equipment. The primary commitments relate to the
engineering, procurement, construction and management contract ("EPCM") for the construction of the flotation
concentrator and related facilities at the Dukwe Mining Project. Contractual obligations related to the EPCM
are expected to continue to rise over the next four months as construction at the Dukwe Mining Project
accelerates.
(b) In the event of an optional of the optional termination Moolman Mining Botswana (Pty) Ltd. mining
contract by the Company, a maximum early termination payment of approximately �2.6 million, which payment may
be reduced, depending upon the number of months notice given, to �nil upon 6 months notice, together with
demobilization charges would be payable.
(c) Under the terms of the Company's prospecting licences Matsitama is obliged to incur certain minimum
expenditures.
(d) The Company has entered into agreements for lease premises for various periods until 30 August 2009.
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