30
May 2024
Xtract Resources
Plc
("Xtract" or the
"Company")
Additional Zambian Joint
Venture Exploration Licences
The Board of Xtract Resources Plc ("Xtract" or
the "Company") is pleased to announce that the Company has on 29
May 2024 entered into an addendum to restate the existing joint
venture agreement with Cooperlemon Consultancy Limited
("Joint Venture
Agreement") in relation to the exploration for
copper in Zambia as previously announced on 24 August 2023. The
addendum adds three additional large scale exploration licenses in
Northwest Zambia (the "Additional Licences") to
the joint venture.
Highlights
· The
existing joint venture is in relation to large scale exploration
licenses 29123-HQ_LEL and 30459-HQ-LEL in Northwest Zambia (the
"Original
Licences").
· The
Additional Licences and the Original Licences are:
- located within the
Western Foreland geological district that hosts the Kamoa - Kakula
deposit and the Central Fold and Thrust Belt ("Fold
Belt") in northwest Zambia.
- all in a highly
prospective part of NW Zambia where competition for exploration
licences is acute and in aggregate form a combined area over the
five licences of 173,586 hectares
· The
Company believes there is scope for the discovery of potentially
high-grade Kamoa-style mineralisation at depth and lower grade bulk
tonnage at or near-surface.
·
There has been limited exploration to date on the Additional
Licences and initial fieldwork will commence early in the second
half of the year with a view to defining potential drill targets as
soon as possible.
Colin Bird
Executive Chairman said:
" It is no secret that I am enthusiastic on
both copper and Zambia as a mining jurisdiction. We are therefore
very pleased that we have been able to add the three Additional
Licences to Xtract's joint venture with Cooperlemon particularly
given that they are adjacent to one of our original joint venture
licences with Cooperlemon. All the joint venture licences are well
situated within the Western Foreland geological district that
hosts potential Kamoa style mineralisation as confirmed by recent
exploration and drilling on nearby licences. It is our intent to
commence field work on the three additional licences with the
objective of identifying potential drill targets for Kamoa style
mineralisation and also for Kolwezi style mineralisation which has
the potential for near surface copper and possibly cobalt
mineralisation. We look forward to updating the market on
exploration activities."
Restated
Agreement
The restated joint venture agreement with
Cooperlemon Consultancy Limited ("Cooperlemon") is in relation to the
exploration for copper at the Original Licences and the Additional
Licences in Northwest Zambia (together the "Licences"). Under the restated joint
venture agreement (the "Restated
Agreement"), Xtract has agreed the following additional key
terms in addition to those in the joint venture which was announced
on 24 August 2023.
Earn-in
and Phase
1 exploration budget for the Additional
Licences
Xtract will earn a 65% interest in the
Additional Licences by funding exploration expenditure of not less
than US$500,000 on each of the three Additional Licences over an
initial two-year period commencing on the date of the Restated
Agreement ("Additional Licences Phase
1"). As previously announced, Xtract will earn
a 65% interest in the Original Licences by funding exploration
expenditure over an initial two-year period commencing on 23 August
2023 ("Phase
1") on the Original Licences of not less than
US$2 million and in aggregate therefore, Xtract's commitment under
the Restated Agreement amounts to US$3.5 million.
If results are positive at the end of the
Additional Licences Phase 1 period a joint venture company
("JV
company") in relation to the Additional
Licences will be formed and this JV Company will then raise funds
to further develop the Additional Licences with the objective of
achieving Positive Exploration Results. For this
purposes Positive Exploration Results means drilling results that
prove continuity of mineralisation at grades suggesting the
potential for the future development of a Mineral Resource of not
less than 500,000 ("five hundred thousand") tonnes of contained
copper at grades consistent with Economic Recovery achievable at
the depth of discovery. Economic Recovery is defined as a project
which has a minimum IRR ("internal rate of return") of not less
than 25% and a payback period not exceeding 42 months including
recovery of capital expenditure. Xtract anticipates funding
this exploration expenditure from existing resources and current
ongoing operational activities.
Consequence
of Trade Sale during the Additional Licences Phase 1
period
If there is a trade or any other sale or joint
venture of the Additional Licences during the Additional Licences
Phase 1 period then Xtract will be deemed to have a 50% interest in
the Additional Licences. A sale requires the agreement of
both Xtract and Cooperlemon.
The of the terms and conditions of the original
joint venture as announced on 24 August 2023 in respect of the
Original Licences otherwise remain unchanged by the Restated
Agreement.
Further
information on the Additional Licences
The Additional Licences are located in
North-West Zambia close to the Democratic Republic of Congo (DRC)
border and the following details are as published on the Zambia
Mining Cadastre,
Large Scale Exploration Licence No:
30458-HQ-LEL comprises 23,833 hectares and is adjacent to the east
of existing Large Scale Exploration Licence No: 20459-HQ-LEL. The
licence was granted on 24 July 2023 and expires on 23 July 2027 and
is held by Far North Enterprises Limited ("Far North"). Far
North is a privately-owned Zambian company,
Large Scale Exploration Licence No:
21851-HQ-LEL comprises 18,808 hectares and is adjacent to the north
of existing Large Scale Exploration Licence No: 20459-HQ-LEL. The
licence was granted on 10 October 2017 and expires on 9 October
2026, is held by Kalupa Resources Limited ("Kalupa"). Kalupa is
a privately-owned Zambian company.
Large Scale Exploration Licence No:
23,196-HQ-LEL comprises 23,196 hectares and is adjacent to the east
of the new Additional Large Scale Exploration Licence No:
21851-HQ-LEL. The licence was granted on 20 October 2017 and
expires on 9 October 2026, is also held by Kalupa.
As previously announced, the Original Licences
are owned by Oval Mining Limited ("Oval") and Far
North. Oval, Far North and Kalupa have each
agreed with Xtract to be bound by the terms and the conditions of
the Restated Agreement with Cooperlemon (who is acting on their
behalf) as though they were a party to the Restated
Agreement.
Geology,
location and prospectivity
The style of mineralisation and associated
geology and structure responsible for the Kamoa-Kakula deposit
operated by Ivanhoe Mines in the neighbouring Democratic Republic
of the Congo ("DRC"), is believed to extend across the border into
North-West Zambia where the Licences are located. Ivanhoe Mines
Kakula Mine is reported to be the world's highest -grade copper
mine with reported deep high-grade (>5% Cu) copper
mineralisation.
The geology of the Licence areas is dominated
by the Western Foreland succession (Kamoa-style mineralisation) and
the neighbouring Lufilian Fold Thrust Belt that plays host to lower
grade bulk tonnage near-surface mineralisation. The Licence areas
transgress the projected Western Foreland - Thrust Belt boundary
and, although historically underexplored, are therefore considered
by the Board to be strongly prospective.
Kamoa-style mineralisation requires the
architectural domain known as the Western Foreland, along with the
presence of diagnostic lithology that includes a reduced diamictite
horizon marking the boundary of reduce - oxidised strata and
structures resulting from growth faults including grabens and
stratigraphic thickening.
African Pioneer Plc, which has an interest in
four licences in North West Zambia three of which are adjacent to
four of the Licences, reported in 2023 that its partner's (First
Quantum Minerals) exploration had confirmed the presence of
mineralisation with diagnostic regional geological and
architectural similarities apparently consistent with Kamoa-Kakula
deposit mineralisation located in the DRC and with apparent
similarities to that needed to facilitate the large scale
deposition of high-grade copper mineralisation of the Kamoa Kakula
type.
Further
background
Cooperlemon is a private Zambian based mining
consultancy firm and 50% owned subsidiary of Zambian based Oval.
Cooperlemon provides consultancy services to Oval and third parties
(including Far North and Kalupa) in respect of mining related
community empowerment and social development and mine
rehabilitation, engineering and design. The executive directors and
principal shareholders of Cooperlemon are Tolayi Sikumba and
Lukonde Makungu.
Further information is available
from the Company's website which details the company's project portfolio as well
as a copy of this announcement: www.xtractresources.com
The information contained within
this announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulation (EU)
No. 596/2014 as it forms part of UK Domestic Law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR").
The person who arranged for the
release of this announcement on behalf of the Company was Colin
Bird, Executive Chairman and Director.
Xtract Resources Plc
|
Colin Bird,
Executive Chairman
|
+44 (0)20 3416 6471
www.xtractresources.com
|
Beaumont Cornish Limited
Nominated
Adviser and Joint Broker
|
Roland Cornish
Michael Cornish
Felicity Geidt
|
+44 (0)207628 3369
www.beaumontcornish.co.uk
|
Novum Securities Limited
Joint
Broker
|
Jon Bellis
Colin Rowbury
|
+44 (0)207 399
9427
www.novumsecurities.com
|
Qualified Person:
Colin Bird: The technical
information contained in this announcement has been reviewed,
verified, and approved by Colin Bird, C.Eng, FIMMM, South African
and UK Certified Mine Manager and Director of Xtract Resources plc,
with more than 40 years' experience mainly in hard rock
mining.
Important Notice:
Beaumont Cornish
Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct
Authority, is acting as nominated adviser to the Company in
connection with this announcement and will not regard any other
person as its client and will not be responsible to anyone else for
providing the protections afforded to the clients of Beaumont
Cornish or for providing advice in relation to such proposals.
Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by
Beaumont Cornish for the accuracy of any information, or opinions
contained in this document or for the omission of any information.
Beaumont Cornish as nominated adviser to the Company owes certain
responsibilities to the London Stock Exchange which are
not owed to the Company, the Directors, Shareholders, or any other
person.
Forward Looking Statements
Certain statements in this
announcement are or may be deemed to be forward looking statements.
Forward looking statements are identified by their use of terms and
phrases such as ''believe'' ''could'' "should" ''envisage''
''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative
of those variations or comparable expressions including references
to assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth results of
operations performance future capital and other expenditures
(including the amount. Nature and sources of funding thereof)
competitive advantages business prospects and opportunities. Such
forward looking statements reflect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors. A number of factors could cause actual results to
differ materially from the results discussed in the forward-looking
statements including risks associated with vulnerability to general
economic and business conditions competition environmental and
other regulatory changes actions by governmental authorities the
availability of capital markets reliance on key personnel uninsured
and underinsured losses and other factors many of which are beyond
the control of the Company. Although any forward-looking statements
contained in this announcement are based upon what the Directors
believe to be reasonable assumptions. The Company cannot assure
investors that actual results will be consistent with such forward
looking statements.
Glossary
"diamictite"
|
A lithified sedimentary rock that
consists of non-sorted to poorly sorted terrigenous sediment
containing particles that range in size from clay to boulders,
suspended in a matrix of mudstone or sandstone
|
"DRC"
|
Democratic Republic of the
Congo
|
"grabens"
|
an elongated block
of the earth's crust lying between two faults
and displaced downwards relative
to the blocks on either side, as in
a rift valley
|
"hectare"
|
A metric unit of square measure
equal to 2.471 acres or 10,000 square metres.
|
"stratigraphic"
|
Pertaining to the inter-relationship
of rocks in a geometric, spatial or time sense
|
ENDS