TIDMBZT
RNS Number : 8783K
Bezant Resources PLC
27 April 2020
27 April 2020
Bezant Resources Plc
("Bezant" or the "Company")
Joint Venture Agreement re Acquisition of
30% of the Kalengwa Exploration Project, Zambia
Bezant (AIM: BZT), the copper-gold exploration and development
company, is pleased to announce that it has entered into a binding
joint venture agreement dated 24 April 2020 with KPZ International
Limited ("KPZ Int") (the "JV Agreement") in relation to the
acquisition of a 30 per cent. interest in the approximate 974km(2)
large scale exploration licence numbered 24401-HQ-LEL in the
Kalengwa greater exploration area in The Republic of Zambia (the
"Licence") by acquiring a 30 per cent. shareholding in KPZ Int. The
Licence is held by Kalengwa Processing Zone Ltd ("KPZ"), a 100 per
cent. (less one share) Zambian subsidiary of KPZ Int, and is for
the exploration of copper, cobalt, silver, gold and certain other
specified minerals. The Licence was granted on 2 April 2019 and is
valid for an initial period up to 1 April 2023.
As the Company will be focusing its resources on progressing the
larger scale Kalengwa Exploration Project (as defined below), the
Bezant Board has decided that the Company will not be exercising
its pre-existing option over the Buffalo Project in Zambia which
will therefore lapse on its scheduled expiry date of 30 April
2020.
Highlights :
-- The acquisition, for aggregate consideration of US$0.75m,
provides access to and operatorship of a large, strongly
prospective exploration area surrounding the historic, high-grade
Kalengwa open pit copper mine.
-- Past third party p roduction at the Kalengwa open pit mine
estimated at 1.9 million tonnes grading at 9.44% Cu and 50 g/t
Ag.
-- Historic exploration data highlights several strong
geochemical/structural targets on the property, many not previously
drill tested.
-- Initial objective of the joint venture is to fully evaluate
the extensive historic exploration data in order to prioritise
targets for follow-up and early drilling.
-- Targets include partially drilled mineralisation within 2-4km
of the historic Kalengwa mine and an untested 13km long copper soil
anomaly aligned with the major structure.
-- The Company's pre-existing option over the Buffalo Project in
Zambia will be lapsed on 30 April 2020 to enable the Company to
focus its resources on progressing the larger scale Kalengwa
Exploration Project.
Colin Bird, Executive Chairman of Bezant, commented :
"The Kalengwa area is a well - recognised copper exploration
target based on the history of the high grade open pit as well as
further identified targets, many of which have not yet been tested.
We are delighted to have entered into this joint venture with KPZ
Int and will seek to pursue an aggressive reconnaissance work
programme to unlock the asset's inherent value potential . A ll the
preliminary indications are that Kalengwa represents an above
average copper exploration project and we look forward to
commencing exploration activities in the near future."
Background information
The Licence, 24401-HQ-LEL, covers an area of 974.83 km(2) in the
North-Western Province of Zambia and is accessed from the regional
centre of Solwezi via a 240km long tarred road of good quality and
then by dirt/gravel roads within the property. The exploration
acreage includes extensive ground surrounding and along strike from
the historic, high-grade Kalengwa open pit copper mine. Past third
party p roduction from such mine is estimated at 1.9 million tonnes
("Mt") grading at 9.44% Cu and 50 g/t Ag. The historic mine
workings exhibit features of both IOCG-type deposits as well as
stratiform copper mineralisation, more typical of that seen at the
major Zambian Copperbelt mines to the east.
In addition, the Licence surrounds a further copper deposit at
Mufumbwe in the southwest of the property which is held by a third
party. A non-compliant mineral resource estimate of 7.2Mt grading
at 2.2% Cu has previously been estimated from drilling at this
adjacent prospect.
The stratigraphic package at Kalengwa is similar to that hosting
the world-class deposits in the Copperbelt. These deposits are
thought to be formed from hydrothermal and ore-bearing fluids
sourced from the intrusives of the Hook Granite complex. It is
notable that such intrusives occur at the Kalengwa mine and are
known from historic third party drilling and airborne magnetic
surveying to occur at, or close to, several other prospects within
the Licence.
Previous exploration data available to the joint venture
partners includes extensive soil geochemistry, airborne magnetics
and electromagnetics, structural interpretation and drilling. Based
on an initial review of such data sets, up to nine high priority
targets have been highlighted within the Licence boundary, most
with limited or no previous drill testing. They encompass several
prospects a short distance along strike from the Kalengwa open pit,
including two with copper-bearing drill intercepts (Minemba &
Minemba southwest). Assay intervals at Minemba based on very
limited historic drilling include 4.3m grading at 1.43% Cu and 2.7m
grading at 2.08% Cu. Mineralisation remains open at both prospects
along strike and to depth. Further targets have been identified a
short distance to the southwest of the open pit, based on soil
geochemistry and airborne geophysics.
Amongst other strong targets on the Licence is the Mufumbwe
northeast extension, an undrilled 13km long northeast-trending soil
geochemical anomaly aligned with an interpreted structural zone,
lying directly along strike from the Mufumbwe copper deposit. The
remaining exploration targets all have significant soil geochemical
anomalies as well as geophysical and structural features of
interest.
The historical exploration datasets in respect of the Licence
will be reviewed in detail in order to prioritise targets and
assist with planning the requisite follow up work by Bezant.
Detailed mapping, sampling and trenching is anticipated to define
potential shallow, early drilling targets.
It is noted that to be able to explore a mining licence area in
Zambia, the licence/mining rights holder is required to obtain the
consent of the relevant surface rights owner(s) and where any such
consent is unreasonably withheld, the Director of Mining Cadastre
may intervene and, if necessary, arrange for arbitration of the
matter. KPZ has duly obtained such permission from Kalengwa Mineral
Processing Ltd, the current holder of surface rights in respect of
the areas of initial interest in relation to the Kalengwa
Exploration Project, and will seek to obtain additional approvals
from surface rights owners as are required under Zambian law as
necessary and appropriate going forwards.
Key Terms of the Joint Venture Agreement
The project comprises the Licence but specifically excludes the
processing area, the tailings dumps and the flooded open pit (the
"Flooded Pit") and the area 500 metres to the north of the Flooded
Pit and 500 metres to the south of the Flooded Pit (the "Kalengwa
Exploration Project"), such excluded area being the subject of the
pre-existing Kalengwa Processing Project between the existing
shareholders of KPZ Int and Xtract Resources Plc (AIM: XTR)
("Xtract") (the "Kalengwa Processing Project") details of which are
set out in Xtract's announcement of 15 July 2019.
Colin Bird, Executive Chairman of Bezant, is also the Executive
Chairman of Xtract. The Kalengwa Processing Project is in relation
to the processing of various historic dumps and in-situ ore located
on the aforementioned demarcated area within the overall Licence
and does not form part of the Kalengwa Exploration Project or
impact on the exploration activity intended to be undertaken in
relation to such joint venture project between Bezant and KPZ Int
nor does it provide Xtract with any direct or indirect ownership
interest in the Licence. Xtract and Bezant are independent of one
another and are independently managed, and the Company has no
rights or obligations in relation to the Kalengwa Processing
Project (held by Kalengwa Mineral Processing Limited) and Xtract
has no rights or obligations in relation to the Kalengwa
Exploration Project.
Parties : The JV Agreement was entered into on 24 April 2020 by
the Company and KPZ Int (the " Parties ").
Share issue and consideration payable : KPZ Int shall within 21
days of the date of the JV Agreement issue to Bezant such number of
ordinary shares in KPZ Int (the " Subscription Shares ") as will
result in Bezant holding 30 per cent. of the enlarged issued share
capital of KPZ Int following the issue of the Subscription Shares
(the " Enlarged Share Capital ") with the remaining 70 per cent. of
KPZ Int being held by the shareholders of KPZ Int as at the date of
the JV Agreement (the " Existing Shareholders "). The consideration
for the issue of the Subscription Shares comprises: i) payment by
Bezant of US$125,000 to KPZ Int on or before 1 August 2020 (the "
Initial Payment "); ii) payment by Bezant of a further US$125,000
to KPZ Int on or before 1 December 2020 (the " Second Payment ");
and (iii) Bezant agreeing to spend before the second anniversary of
the agreement (the " Drilling Deadline ") an aggregate sum of
US$500,000 on initial reconnaissance drilling (the " Drilling
Expenditure ") on the general exploration area covered by the
Licence. Drilling is expected to commence by 1 September 2020. The
Company is currently evaluating the most appropriate funding
solution to satisfy the Initial Payment, the Second Payment and the
subsequent Drilling Expenditure.
Initial Payment and Second Payment to be paid to the Existing
Shareholders : The Parties have agreed that it is the intention of
KPZ Int to use the Initial Payment and the Second Payment to repay
the Existing Shareholder Loans (defined below) and distribute the
balance to the Existing Shareholders and Bezant has agreed to waive
any rights it has to receive a proportionate share of such
balancing amount.
Consequence of not making the Initial Payment, the Second
Payment or spending the Drilling Expenditure : Except with the
prior written consent of KPZ Int and the Existing Shareholders, if
Bezant decides not to continue with the project for whatever reason
or does not make the Initial Payment or Second Payment or spend all
of the Drilling Expenditure by the Drilling Deadline then it will
cease to have any entitlement to hold the Subscription Shares and
shall be required to transfer the Subscription Shares to the
Existing Shareholders (or, if KPZ Int elects in writing shall
co-operate in taking such action or signing such documents as KPZ
Int may reasonably require in order to cancel the Subscription
Shares). Bezant would thereafter have no further liability in
relation to the project.
Operatorship : The Parties have agreed that Bezant shall be the
project's operator and have day-to-day management control of KPZ
Int. Accordingly, if Bezant deems the results of the Drilling
Expenditure to be appropriate, it will use its reasonable
endeavours to advance the project (except where the Parties have
agreed otherwise, using KPZ's funds, not Bezant's own funds)
towards definitive feasibility study status and, thereafter, if the
results of such a study indicate an internal rate of return (" IRR
") in excess of 25 per cent., will seek to advance the project into
potential future production.
Use of Bezant's personnel : As operator, Bezant will provide the
personnel required to operate the project. Bezant will also ensure
that all accounting and administrative work in connection with the
project is carried out and the cost of such accounting and
administrative work shall not exceed US$75,000 (being 15 per cent.
of the Drilling Expenditure).
Future funding of KPZ : If, in addition to the Drilling
Expenditure, Bezant and the Existing Shareholders agree that any
further money is required by KPZ then i) if such additional money
is to be provided by way of debt, then such money will be borrowed
by KPZ (and not by Bezant or the Existing Shareholders); and ii) if
the additional money is to be provided by way of equity, then
subscriptions will be for ordinary shares in KPZ Int and KPZ Int
will then, in turn, subscribe for ordinary shares in KPZ and, in
either case, Bezant will use its reasonable endeavours to procure
such additional funding.
KPZ Int Board : KPZ Int shall have five directors and Bezant has
the right to appoint (and replace any such appointee) up to three
directors on the board of KPZ Int. A board meeting of KPZ Int will
only be quorate if: i) there are at least two directors in
attendance; and ii) where there are four or less directors present
that the number of directors appointed by Bezant equal the number
of other directors present. The Chairman of the board of KPZ Int
will be appointed by Bezant and Colin Bird the Executive Chairman
of Bezant will be the initial Chairman.
Future sale of KPZ Int shares : If a shareholder of KPZ Int (the
" Recipient ") receives a bona fide offer from a third party (a "
Third Party ") to buy, or otherwise acquire KPZ Int shares (the "
Offer ") it shall within three business days inform the other KPZ
Int shareholder(s) in writing of the Offer and provide details of
the price and payment terms of the Offer; and details of the
proposed buyer (the " Offer Details "). The shareholders of KPZ Int
then undertake within ten business days of receipt of the Offer
Details to, in good faith, discuss the Offer and make a unanimous
written decision whether to accept or reject the Offer.
Other costs : Bezant will be responsible for all costs of
maintaining the Licence and all matters ancillary thereto and the
Parties have agreed that the Existing Shareholders may charge a
maximum of US$37,500 (being 7.5 per cent. of the Drilling
Expenditure) to KPZ or KPZ Int in relation to the management of all
local Zambian government and regional affairs.
Representations and warranties : The JV Agreement also contains
certain commercial and other representations and warranties
customary for a transaction of this nature.
Further information on KPZ Int
KPZ Int is a private holding company incorporated in the British
Virgin Islands which owns 100 per cent. (less one share) of KPZ
(the "KPZ Shares"). KPZ Int's only assets as at 31 March 2020 are
the KPZ Shares and a shareholder loan of US$176,201 that it has
made to KPZ and it does not have any liabilities as at 31 March
2020 save for shareholder loans of US$184,701 made by the Existing
Shareholders (the "Existing Shareholder Loans"). For the unaudited
three month period to 31 March 2020, KPZ Int incurred a pre-tax
loss of US$1,500.
Further information on KPZ
KPZ is a private special purpose vehicle incorporated in Zambia
on 21 September 2018. For the unaudited three month period to 31
March 2020, KPZ incurred a pre-tax loss of US$31,404 and had total
assets as at 31 March 2020 of US$65,000.
For further information, please contact :
Bezant Resources plc
Laurence Read Tel: +44 (0)20 3289
Chief Executive Officer 9923
Colin Bird
Executive Chairman
Strand Hanson Limited (Nomad)
James Harris / Matthew Chandler / James Tel: +44 (0)20 7409
Bellman 3494
Novum Securities Limited (Broker)
Jon Belliss Tel: +44 (0)20 7399
9400
or visit http://www.bezantresources.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.
Qualified Person's Statements
Geological information in this announcement relating to the
licence area has been reviewed by Edward (Ed) Slowey, BSc, PGeo, a
consultant to Bezant. 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 a qualified person under the AIM Rules. Mr Slowey has reviewed
and approved the geological content of this announcement.
In accordance with the AIM Note for Mining and Oil & Gas
Companies, June 2009, Colin Bird, CEng, FIMMM, a South African and
UK Certified Mine Manager and Executive Chairman of Bezant, with
more than 40 years' relevant experience, is the qualified person
who has reviewed and approved the technical information contained
herein.
Note to Editors :
IOCG Province Zambia
Numerous copper occurrences are known throughout central and
western Zambia, mostly as a result of prospecting in the early to
mid-1900s. Much of the early exploration effort in this region was
focused on the search for Copperbelt-style sediment-hosted
deposits, but instead resulted in the discovery of vein and
breccia-type copper showings and deposits often associated with
iron concentrations and, in some instances, gold. Numerous
copper-gold and iron oxide occurrences are known in the district
and are noted on the Geological and Mineral Occurrence Map of
Zambia. These types of deposit have come to be known as iron oxide
copper-gold (IOCG) deposits, with the best known example being the
Olympic Dam mine site in Australia.
IOCG deposits comprise a broad range of mineralisation styles,
grouped together chiefly because they contain hydrothermal
magnetite and/or specular haematite as major accompaniments
(>20% Fe oxides) to copper sulphides.
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 or visit www.rns.com.
END
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