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Sefalana having a fantastic year thus far

Local equities were subdued last week as most of the counters on the domestic board were quite, with most trading on Letshego while others stocks participated on thin trades. The reporting season should kick off anytime soon, with most of the blue chips expected to be on the podium. Letshego was the only counter that exchanged notably trades of about 90% of the total trades.

Castlepines to invest $110M in DML Zeta Mine
Castlepines Global Equities has signed a memorandum of understanding to invest $110m in Discovery Metals' (DML) wholly owned subsidiary Discovery Copper (Botswana) (DCB) to develop Zeta underground mine. Castlepines Global Equities will gain a 34% stake in DCB under the deal. DML will hold the remaining 66% interest in DCB, which owns 100% of the Boseto copper operation in Botswana, Southern Africa.

The companies plan to use the investment to pay-off the existing $5m loan finance facility with Cupric Canyon Capital, as well as funding the required development of planned underground mining operations at Boseto.

DML is said to have granted a limited exclusivity period of up to 90 days to Castlepines to undertake due diligence. The Zeta definitive feasibility study established the technical and economic viability of the Zeta underground mine. Subsequent revisions to the design and the cost estimates reaffirm the development plan concept.

Financing closure is expected to take place after execution of definitive documentation by both companies. Lasting for a period of 12 years, Castlepines' investment will attract a commercially competitive coupon rate, subject to an annual fixed escalation factor.

BIC maintains its AA- national rating
Global Credit Ratings (GCR), a leading emerging market focused rating agency that rates the full spectrum of security classes, including Banks, Insurance companies, corporate entities, Local Authorities, Asset Management companies, Funds and Structured Finance transactions has reaffirmed Botswana Insurance Company Limited (BIC)’s national scale claims paying ability rating at AA-(BW), with the rating outlook maintained as “Stable”.

The rating of AA- which constitutes the highest rating a short term insurer in Botswana currently can be accorded by CGR, is regarded as positive for BIC, as it emphasizes the company’s positive strategic direction.

The rating was determined by BIC’s favourable position as the market leader in the short term domestic insurance arena, accounting for more than twice the average market premium. BIC has also displayed a robust level of risk adjusted capitalisation, which in anticipation of reasonably stable premium and investment mixes supports GCR’s favourable view of BIC’s future capital strength. The rating is supported by BIC’s values, innovative approach and technical expertise within the business.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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