CNMC LUANSHYA COPPER MINES PLC

Nonferrous metal mining resources & development related trade andservice

Euronext share price: 0.85 EUR 0.00

CNMC acquired an 85% stake in Luanshya Copper Mines (“LCM”) in 2009 for US$ 50 mill ion from Enya

Holdings BV (“Enya”) fol lowing the suspension of operations at Baluba Centre Mine in the advent of the

Global Financial Crisis. Immediately post-acquisition, CNMC changed the name of the mine to CNMC

Luanshya Copper Mines (“CNMC-LCM”), and it initial ly held an 85% shareholding stake in CNMC-LCM,

and later transferred a 5% stake to ZCCM-IH to achieve a 80% : 20% shareholding structure per the terms

of the acquisition. Therefore, ZCCM-IH currently holds a 20% stake whilst CNMC holds an 80% stake.

Operations

CNMC-LCM operates the Baluba Centre Mine and Muliashi Project. The Baluba Centre Mine

produces copper concentrate, whilst the Muliashi Project is an integrated mining and leaching

project comprising the Muliashi North Mine and the Muliashi Leach Plant.

Development

Following the acquisition of Luanshya, CNMC upgraded the Baluba Centre Mine equipment

which saw production resume in December 2009 following the shutdown in 2008. The

construction of the Muliashi Project was initiated in 2010 with production commencing in

2012.

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2014 annual Report CNMC.pdf… 2014 CNMC Sustainable Development Report.pdf…

Extract from 2015 annual report

CNMC Luanshya Copper Mines plc (CNMC) recorded a turnover of K1, 838.8 mil l ion

(US$282.7 mil l ion) for the year ended 31st December 2014 (2013: K1, 485 mill ion

(US$268.1 mil l ion)). The profit after tax was US$5.5 mil l ion (2013: US$5.9 mil l ion).

CNMC planned to produce 43,600t of copper metal which included 15,600t copper in

concentrate from Baluba Mine and 28,000t of copper cathode from Muliashi Mine. By the

end of 31 December 2014, Baluba Mine and Muliashi Mine produced 15,312t and 29,482t

of copper metal respectively. Thus in 2014 the total copper production was 44,795t,

representing 102.74% of the annual plan. As noted, Muliashi Mine exceeded its annual

production target for 2014 whilst Baluba Mine did not achieve its annual production

target. The failure is attributed to the difficulty in mining the gently inclined thin ore body

with its variable structure and the increasing reclaimed tonnage and decreasing

geological grade.

There were no dividends declared during the year ended 31st December 2014 (2013: Nil).

Extract from 2014 annual report

CNMC Luanshya Copper Mines plc (CNMC) recorded a turnover of K1,695 mill ion for the

period to 31 March 2014 (2013: K1,093 mill ion). The profit after tax was K6.4 mil l ion

(2013: K7.9 loss).

CNMC planned to produce 43,000t of copper metal which included 19,000t copper in

concentrate from Baluba Mine and 24,000t of copper cathode from Muliashi Mine. By the

end of the shift on 31 December 2013, Baluba Mine and Muliashi Mine produced 16,484t

and 24,114t of copper metal respectively. Thus in 2013 the total copper production was

40,298t, representing 93.72% of the annual plan. As noted, Muliashi Mine achieved its

annual production target for 2013 whilst Baluba Mine did not achieve its annual

production target. The failure is attributed to the breakdown of the long-hole dri l l ing

machine which resulted into heavy losses of ore reserves for mining. To keep the mine

production continuous, the cut-off grade was reduced from 1% to 0.8%. Secondly, since

the mining tonnage was not enough, a lot of low-grade ore was reclaimed from old stopes

which made the head ore grade lower than the annual target. Other than the two reasons,

high operating costs and the low ore grade also made Baluba Mine difficult to operate.

On 21 May 2013, the majority shareholder CNMC officially approved the Copper Slag

Reclamation Project. On 28 December 2013, construction of the Copper Slag Reclamation

Project was officially launched. The total investment for this project is expected to be

US$20 mill ion and, the project is expected to be put into trial production in 2014 with

200,000t copper slag and 1,200t copper metal in concentrate designed to be processed.

Pressure on production at Baluba wil l then be reduced and wil l improve the cost structure

and extend the l ife of Baluba. It wil l also ensure employment opportunities for the local

people and eliminate the environmental risks for the slag storage on surface for a long

time.

There were no dividends declared during the year (2013:Nil).

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ZCCM-IH Address

Mukuba Pension House, 5309 Dedan Kimathi Road, P O Box 30048, Lusaka 10101, Zambia

Phone: +260 (01) 221023

Email: corporate@zccm-ih.com.zm

Web: www.zccm-ih.com.zm