TIDMXTR
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
--------------------------- -------------------- ---------------------------
Beaumont Cornish Limited Roland Cornish +44 (0)207628 3369
Nominated Adviser Michael Cornish www.beaumontcornish.co.uk
and Joint Broker 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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