CRC.L Regulatory News (CRC)

30 Mar 2006 08:30

Immediate Release 30 March 2006 COPPER RESOURCES CORPORATION US$7.7 MILLION PRIVATE PLACEMENT OF UNITS PROCEEDS TO BE USED FOR RESTART OF KINSENDA 5.3%-GRADE COPPER MINE IN KATANGA PROVINCE OF CONGO LONDON, United Kingdom - 30 March 2006, Copper Resources Corporation (AIM:CRC.L) ("CRC") is pleased to announce that it has placed 8,000,000 new Unitswith investors at a price per Unit of 55 pence (US$0.97) for total proceeds of‚£4.4 million (US$7.7 million). Each Unit consists of one common share plusone-half of one warrant exercisable over a two-year period at a strike price of75 pence. Two half-warrants are required to convert into one common share. Thecommon shares being issued will be admitted to the London AIM exchange on orabout 4 April 2006. Following their issuance, CRC will have 54,994,335 sharesissued and outstanding.Proceeds of the private placement will be used for the planned restart of theKinsenda copper mine located in the Democratic Republic of Congo DRC). CRCholds a 75% interest in the project through its subsidiary, Miniƒ¨re de Musoshiet Kin-senda SARL (MMK). CRC intends to raise the balance of funds required forthe restart project by way of project debt to MMK and has initiated discussionswith interested banks. In order to prepare MMK for project financing CRC hasagreed with the Forrest Group (see below) that US$5.28 million of the latter'sloan outstanding to MMK will be eliminated and, since conversion into MMKshares would seri-ously dilute CRC, the Forrest Group will instead, parallel tothe terms of the private place-ment, be issued an equivalent number of new CRCshares at 55 pence plus, with each share, one-half of one warrant exercisableover a two-year period at a strike price of 75 pence, with two half-warrantsrequired to convert into one common share. Once the procedures forextinguishing US$5.28 million of the loan are completed CRC will issue5,499,857 new shares to the Forrest Group, whose shareholding will remain atthe current 40%, and CRC will have 60,494,192 shares issued and outstanding.The recently prepared independent Feasibility Study concluded that operationsat Kinsenda can be restarted within 18 months at an estimated capital cost ofUS$38 million. The projected financial return to CRC is highly favourable withan estimated IRR of 67% and NPV of US$143 million, at an assumed long termcopper price of US$1.25/lb and a discount rate of 10%. The high financial rateof return reflects the extremely high grade of Kinsenda's reserves (5.3%copper) coupled with the project's low capital costs. The Feasibility Studyassumes an annual treatment of 1.2 million tonnes of ore, resulting inproduction of 54,000 tonnes per annum of contained copper in the form of arich, 45% concentrate at an average total cash operating cost of US$0.68/lb.The Feasibility Study was prepared by Mineral Engineering Technical ServicesPty Ltd (METS), a Perth-based (Australia) mining engineering consultancy firmthat is not a shareholder in CRC or any associated party. It has been preparedon a professional basis using qualified and experienced engineers working inaccordance with CRC's scope of work. METS's studies are recognized and acceptedby financial institutions working in the resource sector.The Kinsenda and Musoshi deposits were mined from 1968-1983 by a Japanesemin-ing consortium, then by Canadian management on behalf of the Zairiangovernment from 1983-1987, and subsequently by Gecamines, a Congolese statemining com-pany. Kinsenda and Musoshi are both currently flooded and requiredewatering prior to restarting operations. A third property, at Lubembe, is agreen field exploration play with high pot-ential.The remaining 25% of MMK not owned by CRC is held 20% by SODIMICO, a statecompany, and 5% by the Forrest Group, the largest private business in Katangaand one of the lar-gest in the DRC with div-ers-ified operations includingmining, engineering, con-struc-tion, and cement. Operating successfully in theDRC since 1922, the Forrest Group has extensive operational and managementexperience in the country that will support and facilitate CRC's effort indeveloping the properties.The Kinsenda deposit has 15 million tonnes of ore containing 840,000 tonnes(1.9 billion pounds) of copper, which will permit 13 years of operations atfull capacity based on the currently known resource. However, the mine is openat depth and additional drilling is expected to yield more proven resourcesthat will extend the life of the mine considerably.Mitchell Alland, CRC Executive Vice Chairman stated: "This private placementfinancing will permit CRC to continue its dewatering and restart of theKinsenda mine. The project is extremely at-tractive to CRC not only because ofits high return but also because it transforms us into an imminent copperproducer, and provides the basis for further expansion of our DRC productionfrom our other high-grade deposits at Musoshi and Lubembe. We can look forwardto CRC becoming a significant producer in the Congo that will increasinglycontribute to the country's economy and to that of Katanga Province." Copper Resources Nabarro Wells & Co. Westhouse GTH Corporation Securities Communications Mitchell Alland Keith Smith Richard Morrison Toby Hall Executive Vice Chairman +44 (0) +44 (0) +44(0) +44 (0) 77 4801 8690 20 7710 7400 20 7601 6100 20 7153 8035 ENDCOPPER RESOURCES CORPORATION