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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: TrueScouse who wrote (21116)	9/24/2003 11:06:16 AM
From: Stephen O	Read Replies (1) \| Respond to of 39344

re First Quantum >Copper trade secrets By: Barry Sergeant Posted: 2003/09/22 Mon 11:06 ZE2 \| © Mineweb 1997-2003 The palace of Prince Marvellous may be seen off the dusty laterite road just before the Lonshi border post between Zambia and the Democratic Republic of the Congo. The Prince is known to have clout in the area; after all, he has nine wives and seems to want for little. Like most people in the area, on both sides of the border, he is a member of the Bemba tribe, and insists that his remarkable name is as official as it gets. His clan is already reaping the benefits of the rediscovery of the Lonshi copper deposit just across the border in the Congo. In this part of the world, the establishment of a big laterite road good for big thundering trucks is like opening up a new universe. Members of the Bemba tribe have flocked into the area since First Quantum started mining at Lonshi in August 2001; subsistence farmers were instantly converted into commercial farmers by the equivalent of a super highway. For its part, until now, First Quantum has kept the full commercial details of Lonshi something of a secret from the market. The company acquired mining rights for Lonshi in 2000; it was only in mid-January 2003, however, that First Quantum acquired inalienable rights under the new Congolese Mining Code. The formulation of the code was heavily sponsored by the World Bank; in its final and enforceable form, it is now generally seen as a world-class piece of legislation. The code is clear and unambiguous, but also included a six-month period of grace before First Quantum’s rights at Lonshi became truly irreversible. Those rights were finally fixed in August 2003, leaving the company a lot more relaxed over the future of Lonshi, and Bwana Mkubwa, the First Quantum mine in Zambia where the Lonshi ore is processed, 35km from the mine site. In effect, the new Congolese Mining Code gives First Quantum a minimum of 30 years mining and associated rights at Lonshi. First Quantum, however, had at least two other reasons to remain low profile on Lonshi until now. The company has just acquired exploration rights to about 10 000 square km on the Congo side of the border; that is now secure under the new Congolese Mining Code. There was no need to fully display Lonshi until legislative guarantees were certain; there was also no reason to attract competition, such as it may be in this part of the world. Second, First Quantum has been actively working on expanding the Lonshi reserve (the strike remains open in two directions). Company exploration teams have also made a new strike (which appears to be economic) at Lufua, also inside the Congo. Drill results for Lufua are due to be publicly announced any day now; preliminary indications from company officials point to the near certainty that an economic strike has been established. Lufua is situated, fortuitously as it may seem, just 1km from the border with Zambia, and about 30km from the historic Mufulira Mine, in which First Quantum holds a stake via its stake in Mopani. First Quantum has, of course, been heavily committed to exploration since it acquired Bwana Mkubwa in Zambia in 1996. The first exploration drive resulted in rediscovery of Lonshi, and now in the discovery of Lufua. Beyond the 10 000 square kilometers of exploration rights held in the Congo, First Quantum holds another 17 000 in Zambia. Despite the notorious operational failures across the copperbelt in recent years, exploration activities are intensifying rather than dwindling. Anglo American, which quit its investment in Zambia Consolidated Investments (ZCI) early in 2002, holds roughly 80 000 square kilometers of exploration ground in Zambia, and another 20 000 in the Congo. Similarly, Avmin, which quit on its Chambishi investment earlier this year, has exploration teams working in both countries. The Central African Copperbelt extends some 500km through Zambia and the Congo, and averages around 50km in width. Since both countries nationalised the sector around 1970, there has been precious little exploration of any kind. In the past few years, any number of new discoveries have been established in both countries. Field geologists talk of the quality of new discoveries, rather than about whether new finds are being made. Indeed, it may yet be shown that Prince Marvellous and his palace are situated above a big new copper deposit. What else could explain his extraordinary name?