Investee Companies

Annual Report Summaries

NFC Africa Mining Plc Extract from 2017 Annual Report

NFC Africa Mining Plc (NFCA) recorded a turnover of K1,716.05 million (US$173.9 million) for the financial year
ending 31st December 2016 (2015: K677.11 million (US$104.1 million) as a result of increased sales volumes.

NFCA recorded a loss after tax of US$31.1 million (2015: K45.8 million loss).

NFCA continues to work on the development of the South East Ore Body project. The company reported project expenditure of K2,666.33 million (US$270.2 million) as at 31st December 2016. Total planned project investment is K8,537.65 (US$832 million). Once completed, the project is expected to extend the life of the mine for 20 years. The design and annual capacity at full production is estimated at 3.3 million tonnes of ore containing 60 000 tonnes of copper.

There were no dividends paid during the year ended 31st December 2016 (2015: Nil).
Annual Report Summaries

Ndola Lime Company Ltd Extract from 2017 Annual Report

Ndola Lime Company Limited (NLC) reported total revenues for the financial year ended 31st March 2017 of K89.6 million (2016: K196.6 million) and a loss before tax of K1,163 million (2016: K82.3 million loss).

Major contributors to the loss was lower sales of 75.7% (K279.4 million) below budget, impairment of the plant amounting to K861 million, finance costs and penalties on overdue Zambia Revenue Authority (ZRA) tax obligations totalling K93.7 million.

Ndola Lime Company (“NLC”) has been working on optimizing a second vertical kiln (“VK-2”) to be powered by coal that will result in additional capacity of 500 tonnes per day. The primary objectives of the VK2 is to substitute the inefficient and out-dated operations of the Rotary Kiln and reduce operational expenses attributable to the use of Heavy Fuel Oil (“HFO”) through the use of coal. Following the perennial escalation in costs related to the Recapitalization Project (RP) and adverse financial performance from the latter half of 2013 onwards, owing to a myriad of factors including significant escalations in the price of HFO, loss of market share, ZCCM-IH resolved to finance the completion of the RP which has cost about $105 million to date. The hot commissioning of the project started in December 2015. However, the commissioning of the project has been met with a lot of challenges.

There were no dividends declared during the year under review (2016: Nil).
Annual Report Summaries

Mopani Copper Mines Plc Extract from 2017 Annual Report

During the financial year ending 31st December 2016, Mopani Copper Mines (MCM) recorded net revenue of
K2, 519.99 million (US$255.37 million) (2015: K7, 291.43 million (US$1,121 million). The net loss was at K1, 776.14 million (US$179.99 million) (2015: K1, 853.75) US$285 million net loss).

During the year ending 31st December 2016, MCM produced a total of 41,100tonnes of copper from own sources (2015: 92,100 tonnes). The 55% lower production figures in 2016 compared to 2015 were driven by the partial suspension of production, which were aimed at improving MCM’s operations and cost reduction. Progress was made in the upgrading as MCM’s Synclinorium Shaft at Nkana was commissioned and started to hoist ore at the end of 2016.

During the year under review, Mopani produced 41,100 tonnes of copper from own sources and this was 51,000 tonnes (55%) lower than the previous year due to the partial suspension of production while the major upgrade projects are being completed.

There were no dividends paid during the financial year ended 31st December 2016 (2015: Nil).
Annual Report Summaries

Lubambe Copper Mines Extract from 2017 Annual Report

Lubambe continued with restructuring through downsizing of output and the reduction of related labour cost.
The largest contributors to the unit cost savings were a reduction in labour cost due to a 66.00% reduction in expatriate labour, a reduction in stoping dilution obtained through an improvement in the mining stoping method, and a 4.00% increase in plant recoveries obtained through plant optimisation initiatives.

This is the first reporting period in which Lubambe operated in accordance with the reduced production target of 80,000 tonnes of ore per month. The reduced target was implemented in March 2016 to curtail operating losses, save cash and preserve the ore body whilst implementing a strategy to upgrade the underground dewatering infrastructure.

During the period under review a labour restructuring programme was successfully concluded which aligned the total labour complement with the revised lower production rate of 80,000 tonnes per month. Ongoing capital expenditure was curtailed to preserve cash with the majority of expenditure being incurred for mine ramp development.

The Lubambe Extension Project was put on hold until an opportune time when conditions are suitable for additional investment. This high-grade area remains an integral part of the future development of the Lubambe ore body.

During the second half of 2016, more than 300% increase in underground pumping capacity was obtained through the successful upgrade of the underground pumping infrastructure. The upgrades enabled Lubambe to dewater all declines that were previously flooded for a period of 10 months. Following the dewatering, substantial progress was made in the development of the declines. During November and December 2016, decline development advance was well in excess of requirements for sustainable production. This achievement will enable Lubambe to obtain access to new ore development areas at a faster rate, which will enhance the ability to ramp-up mining production.

There were no dividends declared during the year under review (2015: Nil).
Annual Report Summaries

Chibuluma Mines Extract from 2017 Annual Report

Revenue for the financial year ended 31st December 2016 was K492.41 million (US$49.9 million) (unaudited)
(2015: K432.54 (US$66.5 million)). Net loss over the same period was K29.60 million (US$3.0 million) (2015: K127.49 million (US$19.6 million). Chibuluma Mines Plc’s (CMP) cash position increased to K16.83 million (US$1.64 million) as at 31st December 2016 (2015: K0.42 million (US$0.056 million).

Production continued to be negatively affected by the poor availability of mining production equipment due to frequent breakdowns of machines, a typical feature of an aged fleet, which coupled with depleting ore reserves resulted in reduced volumes and contributed to constrained cash flow at the company.

The Company has been making progress towards commissioning of the Chifupu Mine Project and was awaiting the installation of 220 Kw ventilation fans to service lower production mine levels.

The company continued implementation of various cost saving and cost containment initiatives to ensure it achieved its set Key Performance Indicators and advance from a loss to a profitable position.

Management was also focusing on identifying and progressing viable initiatives which would assist in extending the footprint of the Jinchuan/Metorex Group in Zambia beyond the current Life of Mine.

No dividends were paid for the financial year ended 31st December 2016 (2015: Nil).
Annual Report Summaries

Chambishi Metals Extract from 2017 Annual Report

The Company made a profit before tax of K43.42 million (US$4.4 million) (2015: Net loss of K260.83 million
(US$40.1 million) and its current liabilities exceeded its current assets by K2,776.79 million (US$270.6 million) (2015: net current liability position of K1,885.63 million (US$289.9 million). The Company also had a deficit in shareholder funds of K1,232.42 million (US$120.1 million) (2015: Deficit in shareholder funds of K809.80 million (US$124.5 million).

The Eurasian Resources Group has confirmed its intention to continue to provide financial support to the Company to enable it to continue its operations and meet its obligations.

No dividends were paid in 2016 (2015: Nil).
Annual Report Summaries

KCM Extract from 2017 Annual Report

Konkola Copper Mines (KCM) reported total revenue of K8,621.47 million (US$874.3 million) for the financial
year ended 31st March 2017 (2016: K9,607.04 million (US$972.5 million). The reduction in revenue was attributed to lower metal prices through a large part of the financial year, with copper prices surging upwards in the latter quarter thereof. The net loss for the year was at K1,367.72 million (US$138.7 million) (2016: K3,685.75 million (US$373.1 million loss).

Total finished copper production during the financial year was marginally down 1.1% to 180 000 tonnes for the year ended March 2017 (2016: 182 000) compared to the previous financial year.

During the year under review, KCM production volumes were constrained due to the Nchanga Underground Mine being placed under care and maintenance on the tail end of the previous financial year and lower equipment availability across other operating units.

Moving forward, KCM’s strategy continues to be underpinned by vigorously pursuing higher operating productivity levels at the Konkola underground mine, more reliable TLP facility with potential to increase recoveries, increased usage of the smelter by processing third-party concentrates from Zambia and DRC, and improved cost cutting measures.

There were no dividends declared during the year under review (2016: Nil).
Annual Report Summaries

Kariba Minerals Ltd Extract from 2017 Annual Report

For the financial year ended 30th June 2016, Kariba Minerals Limited (Kariba) reported total revenues of K21.34 million (2015: K11.58 million – restated) with a profit after tax of K 1.14million (2015: K12.73 million loss – restated).

For the financial year ended 30th June 2016, Kariba Minerals produced a total of 964,548 Kg (2015: 983,707 Kg) of rough amethyst. During the same financial year, Kariba sold 16.7 million carats of high-grade rough amethyst through two auctions in Singapore in September 2015 and in Lusaka in April 2016 for a total of K6.51 million (US$0.66 million) in revenue from the auctions. Kariba’s ore production was at 15,927 tonnes in the year ending 30th June 2016 (2015: 30,432 tonnes).

Kariba constructed a new sort house to meet the market demand from new customer orders for specific high quality, small sizes of amethyst under natural light conditions. Additional storage silos were constructed to increase the stock holding capacity to 800 tonnes.

There were no dividends declared during the financial year ended 30th June 2016 (2015: Nil).
Annual Report Summaries

Maamba Colliers LTD Extract from 2017 Annual Report

Maamba Collieries Limited (MCL) reported total revenue of K100.38 million (US$10.18 million) for the year ended 31st March 2017 (2016: K121.9 million (US$12.34 million) and had profit after tax of K21.2 million (US$2.15 million) (2016: K52.85 million (US$5.35 million). The company’s assets exceeded its liabilities by K1,023.8 million (US$107.91 million) as at 31st March 2017 (2016: K1.180.61 million) (US$105.6 million)). Additionally, the company has accumulated losses amounting to K842.72 million (US$87.69 million) (2016: K999.49 million (US$89.4 million).

During the year under review, MCL commissioned the first 150 MW Thermal Power Plant in August 2016 and the second 150MW was commissioned in November 2016 and the Commercial Operations Date was set for 31st December 2016.Maamba Collieries Limited is currently supplying 270MW to ZESCO. The revenue and financial position of the company is expected to improve in the future after the commissioning of the Thermal
Power Plant.

There were no dividends declared during the year under review (2016: Nil).
Annual Report Summaries

Kansanshi Mining Plc Extract from 2017 Annual Report

Kansanshi Mining Plc (KMP) had sales revenue of K14.51 billion (US$1.47 billion) (2015: K9.69 billion (US$1.49
billion) for the financial year ended 31st December 2016. Although total copper production was up 20% at 272,843 tonnes (2015: 226,674 tonnes), realised prices were lower than the previous year resulting in a decline in revenue. Gold production was 9% higher at 148,220 ounces (2015: 136,257 ounces) due to higher concentrate production.

Over the next five to six years the Company plans on gradually shifting towards sulphide mining as oxide materials coming out of the mine are reducing. As a result there was need to double the Sulphide ore throughput to sustain current Copper Production levels. If the latter is not done the levels of production would gradually drop from 250,000 tonnes in 2017 to 245,000 tonnes in 2018, then to 240,000 tonnes in 2019, 202,000 in 2020, 174,000 in 2021 and would continue to decline to levels of 50% of current production post 2021.

In this connection, a US$1.5 billion investment in the Company has been envisaged to sustain the said production and significantly improve other facets of mine operations. Additional smelter capacity would in turn be required as the current Smelter capacity would not be able to cater for increased Sulphide concentrate production. High level electricity would have to be supplied to the mine so as to also capacitate the two Smelters. The Company already has grave concerns over the security of power supply from ZESCO. Since the reduction of power supply from 200 megawatts to 165 megawatts, parts of the business had to be shut down such as the High Pressure Leach system which was still not operating.

The profit for the year 2016 was K1, 248.3 million (US$126.5 million) (2015: loss of K9.11million (US$1.4 million) and had been added to the retained earnings to contribute towards raising the US$1.5 billion required for capital projects.

No dividends were paid during the year ended 31 December 2016 (2015: K52.04 million (US$ 8 million).