For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220823:nRSW8336Wa&default-theme=true
RNS Number : 8336W African Pioneer PLC 23 August 2022
23 August 2022
African Pioneer Plc
("African Pioneer" or "the Company")
Central Africa Copperbelt Project Update
African Pioneer plc ("APP" or the "Company"), the exploration and resource
development company with projects in Namibia, Zambia and Botswana is pleased
to provide an update on the Option Agreement and subsequent exploration
programme entered into with First Quantum and APP's 80% owned subsidiary
African Pioneer Zambia Ltd ("African Pioneer Zambia"). The Option Agreement
covers four Zambian exploration licences (the "Projects") held by African
Pioneer Zambia and was signed on 19 January 2022 and announced on 20 January
2022.
Highlights of the initial exploration work undertaken on the Projects by First
Quantum
· pXRF assay results for the first two batches of soil samples over
targets within the Licences resulted in First Quantum reporting "significant
copper anomalies".
· Sufficient mapping and sampling completed on the initial anomalies to
trigger immediate follow-up Air-Core drilling to pre-define targets for
detailed diamond drilling.
· Targets defined to date represent a significant cumulative strike
length of anomalous copper in soils.
· Targets are associated with rock types and regional structures
diagnostic of Copperbelt-type mineralisation.
· Completion of soil geochemical survey and mapping underway and
expected to outline further targets of merit.
· Planned work as part of the Option Agreement, includes completion of
the soil geochemical surveys and associated pXRF in soils, continued mapping
of new target areas, Air-core drilling and RC/diamond drilling.
The Projects comprises four exploration licences, 27767-HQ-LEL, 27768-HQ-LEL,
27770-HQ-LEL, and 27771-HQ-LEL, the subject of the Option Agreement are
located in the highly prospective Central Africa Copperbelt in northwest
Zambia, home to the largest mineralized sediment- hosted copper province in
the world. The Licences are located less than 100km from First Quantum's giant
Sentinel copper mine and host similar aged rock types proven to host the major
copper deposits of the Copperbelt
Executive Chairman, Colin Bird commented "We are very pleased that our partner
has commenced exploration and largely completed Phase 1 fieldwork and is
already embarking on drilling. We look forward to receiving further results
from the geochemical soil surveys and drilling results in due course".
Additional Information as announced on 20 January 2022
First Quantum is one of the world's top 10 copper producers operating in
several countries including Zambia where it owns the Sentinel and Kansanshi
mines in Northwest Zambia and is known for its specialist technical
engineering construction and operational skills which have allowed it to
develop and successfully run complex mines and processing plants. Colin Bird,
the chairman of African Pioneer, was a founder of and floated Kiwara Plc in
around 2008 which discovered copper in northwest Zambia and was sold to First
Quantum in 2009 for U$260 million. First Quantum then developed the Kiwara Plc
projects into the Sentinel mine which is the world's 14th largest copper mine.
The licence package covers part of the north-western extension of the Zambian
Copperbelt. The properties are located within 80-100km of First Quantum's
giant Sentinel copper mine, one of the largest copper mines in Africa, with
current Measured and Indicated Resources of 891Mt @ 0.45% Cu. They also lie
close to the Enterprise nickel deposit (37.7Mt @ 1.03% Ni) which is being
reportedly moved towards development.
The Projects lie on the Lufilian Fold Belt in the Domes region of the Central
African Copperbelt, straddling the western boundary of the Kabompo Dome,
underlain principally by rocks of the Lower and Upper Roan, as well as the
stratigraphically higher Kundelungu and Nguba Groups. This geological package
is similar in age and rock type to that hosting the major copper deposits of
the Copperbelt, including Sentinel. Therefore, the licence areas are
considered to be strongly prospective for Copperbelt-type copper/cobalt and/or
nickel deposits. They are historically underexplored, representing the
westerly extension of the Copperbelt which has not been investigated in
detail, as previous work focussed primarily on the central part of the zone.
On the Luamata South licence (27771-HQ-LEL), African Pioneer has acquired a
valuable exploration package arising from recent work by MMG Zambia Ltd
('MMG') which highlights strong soil/airborne magnetic targets that were not
drill tested, as MMG pulled out of Zambia. The Samuteba East licence
(27770-HQ-LEL) was recently held by Anglo American which also carried out
airborne magnetic surveying and reconnaissance soil sampling before exiting
the Copperbelt. The soil data highlights several copper anomalies of
considerable interest.
Summary of main commercial terms of the Option Agreement
Parties First Quantum Minerals Ltd, the Company, African Pioneer Zambia, and the
minority shareholders of African Pioneer Zambia (the "Minority Shareholders").
Initial Expenditure First Quantum has the right but not the obligation to spend US500,000 on each
of the exploration licences 27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and
27771-HQ-LEL within 18 months. The 18 months period is extended a further 6
months for any of the licences where First Quantum has spent US$350,000 in the
first 18 months. At this stage First Quantum will not have earned any shares
in African Pioneer Zambia, just the right to take one or more of the
properties into to the First Earn-In Period by issuing an Option Exercise
Notice.
First Earn-In Period - Issue of Technical Report earns First Quantum 51% After sending the Option Exercise Notice, First Quantum then have 2 years when
it has the right but not the obligation to prepare a Technical Report in
respect of the Property demonstrating an Indicated Mineral Resource of at
least 300,000 tonnes of contained copper (the "Technical Report Requirement").
First Quantum is to fund the Technical Report and if it spends US$2M on this
in the 2-year period then it has an extra year to complete the Technical
Report. Once the Technical Report is issued First Quantum has the right to
deliver the First Earn-In Exercise Notice and be issued shares equal to a 51%
shareholding in African Pioneer Zambia. This will also trigger the Second
Earn-In Period
Second Earn-In Period - Decision to Mine earns First Quantum further 24% so In the Second Earn-In Period First Quantum shall have the right but not the
they own 75% obligation to complete all necessary mining, metallurgical and development
studies to establish a mine at the Property and make public announcement that
it intends to proceed towards commercial development of a Mine on the Property
(a "Decision to Mine"). First Quantum is to fund all costs related to the
Decision to Mine. Once First Quantum announces a Decision to Mine First
Quantum has the right to be issued shares to increase its 51% shareholding in
African Pioneer Zambia to 75%.
Funding once First Quantum at 75% Once First Quantum is at 75% then the parties have to fund pro-rata and if
they do not, they will be diluted. If the joint shareholding of the Company
and the Minority Shareholders is diluted to 10% then it converts into a 1%
royalty which would be paid 0.2% to the Minority Shareholders and 0.8% to the
Company.
Joint Venture after First Earn-In Exercise Notice Once First Quantum has delivered the First Earn-In Exercise Notice the parties
will be deemed to have established a joint venture.
Prior to the making of a Decision to Mine (which announcement shall be in the
sole discretion of First Quantum), the allocation of Joint Venture Expenditure
shall be made by the Participants in proportion to their respective
Participating Interests, provided that First Quantum shall be responsible for
Joint Venture Expenditures relating to its completion of all necessary mining,
metallurgical and development studies contributing to the Decision to Mine.
Sale restrictions The Company needs First Quantum approval to sell and must give First Quantum
first refusal rights and First Quantum cannot sell without the consent of the
Company.
Tag along rights If First Quantum wants to sell their African Pioneer Zambia shares to a third
party, then the Company and the Minority Shareholders can require that the
third party also buys their African Pioneer Zambia shares on the same terms.
Excluded Licence Exploration licence 27769-HQ-LEL will be transferred from African Pioneer
Zambia to a new Zambian company to be owned 80% by the Company and 20% by the
Minority Shareholders.
Representations & warranties The parties have made representations & warranties customary for an
agreement of this nature
African Pioneer Plc
+44 (0)20 7581 4477
Colin Bird
Executive Chairman
Beaumont Cornish (Financial Adviser) +44 (0) 020 7628 3396
Roland Cornish
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
+44 (0)20 7581 4477
Beaumont Cornish (Financial Adviser)
Roland Cornish
+44 (0) 020 7628 3396
Novum Securities Limited (Broker)
Jon Belliss
+44 (0) 20 7399 9400
or visit https://africanpioneerplc.com/ (https://africanpioneerplc.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").
Qualified Person:
Technical information in this announcement has been reviewed by Edward (Ed)
Slowey, BSc, P.Geo, a technical adviser to African Pioneer Plc. Mr Slowey is a
graduate geologist with more than 40 years' relevant experience in mineral
exploration and mining, a founder member of the Institute of Geologists of
Ireland and is a Qualified Person under the AIM rules. Mr Slowey has reviewed
and approved this announcement.
Glossary
A 'Mineral Resource' is a concentration or occurrence of solid material of
economic interest in or on the Earth's crust in such form, grade (or quality),
and quantity that there are reasonable prospects for eventual economic
extraction. The location, quantity, grade (or quality), continuity and other
geological characteristics of a Mineral Resource are known, estimated, or
interpreted from specific geological evidence and knowledge, including
sampling. Mineral Resources are sub-divided, in order of increasing geological
confidence, into Inferred, Indicated and Measured categories.
An 'Indicated Mineral Resource' is that part of a Mineral Resource for which
quantity, grade (or quality), densities, shape and physical characteristics
are estimated with sufficient confidence to allow the application of Modifying
Factors in sufficient detail to support mine planning and evaluation of the
economic viability of the deposit.
"Cu" Copper
"Mt" million tonnes
"Ni" Nickel
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END UPDUUSNRUUUWUAR