CNMHKI provides $75 million shareholder loan for Phase 1 of Kambove Copper and Cobalt Mining Project

Project narrative

On August 25, 2016, China Nonferrous Mining Corporation Limited, China Nonferrous Mining Hong Kong Investment Limited (CNMHKI), and La Generale des Carrieres et des Mines SA (Gécamines) signed a joint venture agreement for the Kambove Copper and Cobalt Mining Project. Supplemental agreements (amendments to the joint venture agreement) were entered into on March 13, 2017, September 13, 2019 and June 20, 2020, respectively. Under the June 20, 2020 supplementary agreement, Kambove Mining SAS Co., Ltd. (Kambove Mining SAS or 剛波夫礦業簡易股份有限公司) — a special purpose vehicle (legally incorporated in the DRC in June 2017) and joint venture of China Nonferrous Mining Corporation Limited [55% ownership stake] and La Generale des Carrieres et des Mines SA (Gécamines) [45% ownership stake] — agreed to pay a one-off ‘entry fee’ of $75 million to Gécamines to obtain the mineral resources in the Kambove Copper and Cobalt Mine. Kambove Mining SAS was responsible for paying the $75 million fee to Gécamines in three installments ($25 million to be paid no later than June 30, 2020, $30 million to be paid no later than July 31, 2020 and the remaining $20 million to be paid no later than August 31, 2020) with the proceeds from a $75 million CNMHKI shareholder’s loan. The project consists of a copper and cobalt strip mine with a designed capacity of 958,000 tons of ores per annum, a heap leaching stockpile with an annual processing capacity of 1,000,000 tons of low-grade ores, a leach smelting plant with a capacity of 30,000 tons of copper cathode and 1,000 tons of blister cobaltous hydroxide per annum, and a sulphuric acid plant with a capacity of 40,000 tons. The mine is located in Kambove Territory and Haut-Katanga Province (south of the M'sesa mine quarry). The planned total investment for the first phase of the project was $239 million. The project’s preparatory works were undertaken in 2019; four drilling holes (with a 75 mm-diameter end-hole) at the main mineral deposit were completed with 648.59 meters drilled. Verification over the open pit overburden tailings resources at the main and western mines was conducted and 5 drilling holes were completed with 130.05 meters drilled. Full-scale construction commenced on January 14, 2020. The project’s temporary 6.6 kV power supply was put into operation on September 2, 2020. Then, on December 14, 2020, the Board of Directors of Kambove Mining SAS approved an EPC contract for the construction of a 120 kV transmission line from the NRC substation. Beginning in June 2021, contractors gradually carried out and completed a series of process and system debugging and optimization activities, such as mixing, extraction and electrowinning combined commissioning with water. Then, on August 18, 2021, after the power supply was established, the project commenced full-process load commissioning tests; the first batch of ore was introduced to perform load commissioning tests on the ball mills and other processing equipment, which marked the commencement of the full trial production stage of the project. In the first half of 2023, Kambove Mining SAS produced 16,731 tonnes of copper cathodes.