REG - Xtract Resources plc - Zambian exploration licences joint venture

Xtract ResourcesAnnouncement

24/08/2023 09:30

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RNS Number : 3498K  Xtract Resources plc  24 August 2023

 

24 August 2023

Xtract Resources Plc

("Xtract" or the "Company")

 

Zambian Exploration Licences joint venture

 

The Board of Xtract Resources Plc ("Xtract" or the "Company") is pleased to
announce that the Company has entered into a joint venture agreement with
Cooperlemon Consultancy Limited in relation to the exploration for copper at
large scale exploration licenses 29123-HQ-LEL and 30459-HQ-LEL in Northwest
Zambia (the "Licences").

 

Highlights

 

·    The two exploration 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.

 

·    The two licences cover a combined 107,000 hectares area covering
ground in a highly prospective part of Northwest Zambia where competition for
exploration licences is acute.

 

·    Licence 29123 - HQ - LEL is located to the west of the perceived
boundary between the Western Foreland and Fold Belt and Licence 30459 - HQ -
LEL is located coincident with the boundary and may also include part of the
Fold Belt.

 

·    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 and initial fieldwork will
commence in September on the two licences with a view to defining potential
drill targets as soon as possible.

 

 

Colin Bird Executive Chairman said:

" The two 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 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 are very excited about the prospects for the joint venture and look forward
to updating the market on exploration activities."

 

 

 

 

Joint Venture Agreement

Xtract yesterday entered into a joint venture agreement with Cooperlemon
Consultancy Limited ("Cooperlemon") in relation to the exploration for copper
at large scale exploration licenses 29123-HQ-LEL and 30459-HQ-LEL in Northwest
Zambia (the "Licences"). Under the joint venture agreement ("JV Agreement"),
Xtract has agreed the following key terms:

 

Earn-in and Phase 1 exploration budget: Xtract will earn a 65% interest in the
joint venture by funding exploration expenditure over an initial two-year
period ("Phase 1") on the Licences of not less than US$2 million. Exploration
is expected to commence in September 2023, and will comprise both physical
activity within the Licence boundaries (including but not limited to mapping,
soil geochemistry, geophysics and drilling), and desktop studies, laboratory
analysis and interpretation of data and results. Xtract anticipates funding
this exploration expenditure from existing resources and current ongoing
operational activities.

 

If the Phase 1 exploration results are successful and prove the continuity of
mineralisation at grades suggesting the potential for the future development
of a Mineral Resource of not less than 500,000 tonnes of contained copper,
consistent with economic recovery at the depth of discovery with a minimum
internal rate of return of not less than 25% and a payback period not
exceeding 42 months (including the recovery of capital expenditure), then
there will be a second two year exploration period ("Phase 2").

 

Phase 2 exploration budget: The Phase 2 exploration expenditure of US$3
million will also be funded by Xtract who will be the operator of the Licences
for the duration of the Agreement.

 

Consequence of Trade Sale: If there is a trade or any other sale of the
Licences and / or the Joint Venture during Phase 1 of the joint venture then
Xtract will be deemed to have a 55% interest in the Joint Venture.  A sale
requires the agreement of both Xtract and Cooperlemon.

 

Mine Development: In the event that either or both of the licences advance to
a point where they are commercially viable and suitable for development then
the licences will be moved to a corporate entity to be owned 75% by Xtract and
25% by Cooperlemon, and it will be the responsibility of the newly formed
corporate entity to raise all capital for mine development and future
operations.

 

Further information on the Licences

Licence No: 29123-HQ-LEL, which comprises 88,149 hectares and expires on 7
September 2025, is held by Oval Mining Limited ("Oval"). The application for
Licence 30459-HQ-LEL, which comprises 19,600 hectares and which has been
approved for issue by the Zambian Mining Cadastre, is held by Far North
Enterprises Limited ("Far North"). Both licences are located in North-West
Zambia adjacent to the Democratic Republic of Congo (DRC) border. Oval and Far
North have each agreed with Xtract to be bound by the terms and the conditions
of the JV Agreement with Cooperlemon (who is acting on their behalf) as though
they were a party to the JV 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 reduced -
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 the Licences, recently reported 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 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,          +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

 

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.

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

 "stratigraphic"  Pertaining to the inter-relationship of rocks in a geometric, spatial or time
                  sense

 

 

 

 

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