CRC.L Regulatory News (CRC)

8 Sep 2005 06:00

8th September 2005 COPPER RESOURCES CORPORATION ("CRC" or "the Company") COPPER RESOURCES CONCLUDES MOU TO ACQUIRE MMK IN DRC TO BECOME PRODUCER AT 5.3% COPPER KINSENDA DEPOSIT NEAR ZAMBIAN BORDER Copper Resources Corporation (AIM: "CRC") has entered into a Memorandum ofUnderstanding to acquire 75% of MiniĬre Musoshi Kinsenda (MMK) which holdsthree deposits in the south of Katanga Province of the Democratic Republic ofCongo (DRC), located near the Zambian border as follows: Deposit Tonnes Billions Grade Meters Pounds Drilled Kinsenda 840,000 1.9 5.3% 66,000 Musoshi 580,000 1.3 2.4% 30,000 Lubembe 1,000,000 2.2 2.2% 12,000 Total 2,420,000 5.3 With this acquisition CRC will immediately embark on a US$5 million dewateringprogram of the Kinsenda mine where production is expected to commence within 18months. Kinsenda will produce 40,000 tonnes per annum of copper content in theform of a rich, 45% concentrate from the high-grade 5.3% ore body. In theinterim CRC will produce 4,000 tonnes per annum of copper matte (95% coppercontent) by treating existing ore stockpiles through the Musoshi arc furnacethat is currently in operation.The Kinsenda and Musoshi properties were mined in 1968-1983 by a Japanesemining consortium and by Canadian management on behalf of the Zairiangovernment from 1983-1987, and subsequently by Gecamines, a Congolese statemining company; and are now owned by MMK, which is held 20% by SODIMICO, aGovernment company, and 80% by the Forrest Group, the largest private businessin Katanga and one of the largest in Congo with extensive diversifiedoperations including mining, engineering, construction, cement. Having operatedsuccessfully in Congo since 1922, the Forrest Group has extensive operationaland management experience in the country that will support and facilitate CRC'seffort in developing the properties.In exchange for the 75% shareholding in MMK, CRC will issue 18,504,400 newshares so that the Forrest Group will become the largest shareholder of CRCwith a 40% stake in the Company. Mr. George Forrest, Chairman of the ForrestGroup, said: "We look forward to developing our cooperation with CRC in thecontext of a public company that could become the vehicle for other extensivemining operations in the future."The MMK acquisition is attractive as it represents 5.3 billion pounds ofcontained copper at a cost 1/5th of a US cent per pound of copper.Kinsenda and Musoshi are both currently flooded and will require a dewateringprogram prior to bringing them back into operation. Lubembe is a green fieldexploration property with high potential. All three deposits have been drilled,Musoshi and Kinsenda extensively and Lubembe not to the same degree.At Musoshi there is a plant which includes crushers, grinders, floatation tanksand an ore concentrator with the capacity 2,500 tpd. The equipment will need tobe refurbished prior to commencing operations.In addition the area has extensive infrastructure including roads, water, staffaccommodation and power. The power infrastructure includes a 220/110Kva line toboth Kinsenda and Musoshi. There is also a substation at Musoshi withgenerators for back up if required.The program would be to start production at Kinsenda in 6-9 months post thede-watering of the mine itself. Initial indications are that it will cost inthe order of $5 million to complete the de-watering of the mine and US$30million to refurbish and regenerate the underground mine and Musoshiconcentrator.Sir Sam Jonah, CRC Non-executive Chairman stated: "The MMK acquisition offersan exceptional opportunity to for CRC to become a long-term producer with worldclass deposit in partnership with the Forrest Group who have been active in theCongo are the premier private group in the country."For further information please contact: Copper Resources Nabarro Wells & Co. Westhouse Securities Mitchell Alland Keith Smith Richard Morrison Executive Vice Chairman +44 (0)787 569 5563 +44 (0)20 7710 7400 +44(0) 20 7601 6100 ENDCOPPER RESOURCES CORPORATION