REG - Xtract Resources plc - Kakuyu Copper Project Zambia update

Xtract ResourcesAnnouncement

26/01/2023 07:00

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RNS Number : 8882N  Xtract Resources plc  26 January 2023

 

 

 

 

For immediate release

26 January 2023

 

Xtract Resources Plc

("Xtract" or the "Company")

Kakuyu Copper Project Zambia Update

 

The Board of Xtract Resources Plc is pleased to provide shareholders with an
update on the Kakuyu copper joint venture project located approximately 53km
north-west of the town of Mumbwa, Central Province of Zambia.

 

Highlights

 

·    Exploration undertaken in and around the Kakuyu open pit has defined
several copper targets offering potential for extension of the existing in-pit
mineralisation and a significant increase in the projected life of mine

 

·    On the southern side of Kakuyu Hill an approximate combined 800m west
and east striking extension of copper mineralisation has been postulated that
requires validation through sampling and drilling.

 

·    On the northern side of Kakuyu Hill, a substantial copper in soil
anomaly extending over a strike length east to west of approximately 1.4
kilometres has been defined. The target is coincident with a hydrothermal
breccia of the same composition as that hosting mineralisation in the open pit

 

·    An assessment of waste dumps by the grade control team is under way
to identify potential additional mineral resources presumed by previous
operators to be low-grade or waste material. A programme of sampling is in
progress and additional feedstock may be generated

 

·    A detailed assessment and inventory of ore currently stored on the
ROM pad is in progress to develop a grade control and ore blending plan to
ensure the delivery of consistent tonnage and grade output

 

·    Work is under way to push back the existing ramp access to the pit to
expose in-pit extensions of higher-grade (targeting >2.0% Cu) ore providing
additional feedstock whilst simultaneously improving pit access

 

·    A 250t bulk sample has been delivered to the Kabwe Refinery for
drying, crushing and sampling ahead of negotiations for the future processing
of ore production. Samples have also been delivered to an external processing
consultant for metallurgical test work

 

 

·    The Company is now sourcing a drill rig to test the potential
extensions to mineralisation associated with the existing open pit together
with the substantial soil anomaly delineated along the northern boundary of
Kakuyu Hill.

 

 

Colin Bird, Executive Chairman said: "I am very pleased with progress to date
on the Kakuyu project. On acquisition, we were confident that a relatively
small operation could be sustained for two years or possibly more. We have
been very active on the ground and our conclusions now are that the initial
prognosis could potentially extend to 4 or 5 years but, more importantly,
there exists the potential opportunity to build a larger operation which could
justify its own processing capability. In the short-term it is our intention
to maximise cash flow from the operation to finance a larger exploration
programme and we will keep shareholders informed of our progress and ultimate
direction for the Kakuyu project."

 

Kakuyu Project

The Kakuyu Project is located approximately 53km north-west of the town of
Mumbwa, Central Province of Zambia, in a region well-known for mining
including the nearby mines and occurrences of Sable Antelope, True Blue,
Crystal Jacket, Maurice F Gifford, Lou Lou, Silverking and Kamiyobo. The most
recent discovery is the Iron Oxide Copper Gold ("IOCG") Kitumba project
(BHP/Blackthorn Resources).

 

The Kakuyu Project is covered by two mineral licences, one small-scale mining
licence 29805-HQ-SML issued to Kakuyu Mining Limited which is valid until 7
November 2031 covering an area of 201.78 hectares and a second small-scale
mining licence currently under application by Kakuyu Mining Limited over an
adjoining area of similar size.

 

The Kakuyu Project has been operated at various times in the past by both
small-scale commercial and artisanal miners. There has been limited
exploration to date of the Kakuyu Project which provides Xtract with an
opportunity to make fresh discoveries in an under-explored but prospective
region. The Kakuyu Project is centred around the Kakuyu Hill pit and a large
hematitic lens (approximately 800 by 200 metres) found in a fault-controlled
setting which is understood either to be a shear hosted Cu-Au deposit or an
oxidised post orogenic IOCG deposit, or a combination thereof. The extension
of the lens feature with depth is not currently known although the hematitic
lens may extend to the west, along strike of the mapped iron unit. Field
investigations showed similar features, structures and alteration in the
western diggings, outside of the larger Kakuyu Hill pit. There is also a
potential for mineralisation to the north of the hill as the area is highly
faulted with a smaller wedge of older dolomites sitting within the younger
meta-sediments which could form fluid traps. Copper occurs as both oxides and
sulphides on fractures, in breccias and as stockworks.

 

The Kakuyu Hill pit has been worked historically (although there is no
historic data) to the extent that benches have been put in place to open up
the pit. There are also underground artisanal workings with tunnels and a
collapsed shaft. Oval Mining has currently removed bulk samples of the
potential higher-grade sulphide ores from the pit which have been hand-sorted
and stockpiled on site, targeting grades of 3.5-4% Cu (although no assays are
available on in situ grades at this time). A site has also been created south
of the pit for the new waste rock dumps.

 

The deposit type and mineralisation mechanisms are not yet clear from initial
field observations and Xtract plans an exploration programme to understand
further the type of deposit and mineralisation potential at Kakuyu. This
programme is likely to comprise initially a detailed ground IP and/or EM
geophysics survey with follow up drilling on identified targets.

 

Joint Venture Agreement

Xtract has entered into a joint venture agreement with Oval Mining Limited
("Oval") relating to the exploitation of small-scale production licence
29805-HQ-SML (the "Licence"). Under the terms of the Agreement, Xtract and
Oval have agreed that the net profit of the Kakuyu Project will accrue as to
60% to Xtract and 10% to Oval. Both Oval and the Licence Holder are
Zambian-based entities. The balance of 30% will accrue to Kakuyu Mining
Limited (the "Licence Holder").

 

A fuller summary of the terms of the joint venture agreement were set out in
an RNS dated 15 December 2022.

 

 

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 (http://www.xtractresources.com)

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018.The person who arranged for the release
of this announcement on behalf of the Company was Colin Bird, Director.

 

Enquiries:

 

 Xtract Resources Plc                               Colin Bird,          +44 (0)20 3416 6471

                                                    Executive Chairman   www.xtractresources.com (http://www.xtractresources.com)

 Beaumont Cornish Limited                           Roland Cornish       +44 (0)207628 3369

 Nominated Adviser and Joint Broker                 Michael Cornish      www.beaumontcornish.co.uk (http://www.beaumontcornish.co.uk)

                                                    Felicity Geidt

 Novum Securities Limited                           Jon Bellis           +44 (0)207 399 9427

 Joint Broker                                       Colin Rowbury        www.novumsecurities.com (http://www.novumsecurities.com)

 

Qualified Person:

Information in this announcement relating to the exploration works has been
reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to Xtract. 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 the geological content of this announcement.

Qualified Person:

In accordance with AIM Note for Mining and Oil & Gas Companies, June 2009
("Guidance Note"), Colin Bird, CC.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, is the qualified person as defined in
the Guidance Note of the London Stock Exchange, who has reviewed the technical
information contained in this press release.

TECHNICAL GLOSSARY

The following is a summary of technical terms:

 "breccia"                                 Rock fragmented into angular components

 "dolomite"                                Calcium-magnesium carbonate mineral, (CaMg)CO3, or a rock composed largely of
                                           the mineral dolomite

 "EM" (Electromagnetic surveying)          Geophysical exploration method employing the related electric and magnetic
                                           fields which can be set up in a conductive body by an artificial electric
                                           field at surface

 "hematite"                                A mineral composed of ferric iron oxide

 "IP"                                      A method of ground geophysical surveying which employs the passing of an

                                         electrical current into the ground to test for indications of conductive
 Induced Polarisation                      metallic sulphides

 "IOCG" (iron oxide copper-gold) deposits  Mineral deposits that typically occur at the margins of large igneous bodies
                                           which intrude into sedimentary strata, often forming pipe-like, mantle-like or
                                           extensive breccia-vein sheets within the host stratigraphy

 "metasediment"                            A metamorphosed sediment

 "orogenic"                                Pertaining to mountain building events in the Earth's history

 "oxide"                                   Mineral produced by natural weathering processes at or near the earth's
                                           surface

 "ROM"                                     Run of mine

 "shear"                                   Plane of failure in faulted body of rock

 "stockwork"                               A large-scale ramifying series of fissures filled with mineralized material

 "sulphide"                                A metallic compound of sulphur

 

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