REG - Altona Rare Earths - Botswana Copper Licence Option Agreement

Altona Rare EarthsAnnouncement

09/04/2024 07:00

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RNS Number : 8242J  Altona Rare Earths PLC  09 April 2024

9 April 2024

 

ALTONA RARE EARTHS PLC

("Altona" or "the Company")

 

 

BOTSWANA COPPER LICENSE ACQUISITION

 

Altona (LSE: REE), a resource exploration and development company focused on
critical raw materials in Africa, is pleased to announce that it has entered
into a binding option agreement (the "Agreement") with Ignate African Mining
P/L, with respect to exploration for copper and silver on Prospecting Licence
PL2329/2023 (the "Tenement"), located in the Northwest District of Botswana,
known as the Sesana project (the "Project").

 

Highlights

·    The Project is located in the heart of the highly prospective
Kalahari Copper Belt ("KCB"), close to major copper-silver discoveries.

·    The Project is located 25 km from the producing Khoemacau underground
copper-silver mine and situated in an active exploration area of the KCB
(Khoemacau, Galileo Resources, ARC Minerals).

·    Recent airborne geophysical data interpretation shows prospective
geological structures for copper-silver mineralisation passing through the
Tenement.

·    Botswana considered one of the most attractive mining investment
jurisdictions in Africa, and indeed, in the world.

 

The Tenement

 

The Tenement has a surface area of about 274 km(2) and is valid until 31 March
2026, after which it can be renewed twice for periods of up to 2 years each.
It is valid for copper, cobalt, gold, silver, lead, zinc, aluminium, chromium,
iron, titanium and platinum group metals.

 

Figure 1 - Location of the KCB (light blue), main Cu deposits, and Altona's
Sesana Cu-Ag Project

The Kalahari Copper Belt

 

The Project is located along the eastern margin of the KCB, a
continental-scale geological feature stretching in a Southwest-Northeast
direction across Namibia and Botswana hosting sedimentary copper-silver
deposits. Copper-silver mineralisation typically occurs along the contact
between the D'Kar Formation, which is mostly made up of reduced siltstones,
and the Ngwako Pan Formation, which consists mainly of oxidised sandstones.
The contact is repeated across strike at the favour of isoclinal folds. The
position of copper-silver mineralisation is controlled by the lithology and
oxidation state contrast along the contact, as well as the presence of folds
and associated structures.

 

The KCB is home to the low-cost Khoemacau copper-silver mine which started
production in June 2021. The mine has a full rate production rate of ca.
60ktpa Cu and ca. 1.6Mozpa Ag, extracted from ore from the Zone 5 underground
mining operation, which is located about 25 km from the Tenement.

 

The Tenement is located next to Galileo Resources licence PL039/2018 and near
ARC Minerals licence PL135/2017 (Virgo Copper-Silver Project), where a 3km
long soil anomaly associated to the D'Kar / Ngwako Pan formations contact has
been recently identified.

 

Recent interpretation of regional airborne magnetic data shows that a ca. 10km
long stretch of the contact between the D'Kar and Ngwako Pan formations
contact is passing through the northern part of the Tenement, along the
eastern margin of a fold structure, which makes it a perfect setting for
copper-silver mineralisation.

 

Figure 2 - Sesana Cu-Ag Project map - Red outline: PL2329/2023 outline; blue
outline: D'Kar / Ngwako Pan formations contact; black line: fold axis. Green
dots: Cu-Ag deposits.

Botswana

 

Botswana is a safe and mature mining jurisdiction with a supportive regulatory
framework. The 2022 Fraser Institute Annual Survey of Mining Company ranked
Botswana as best in Africa in terms of investment attractiveness and placed
this country in the top 10 world's mining jurisdictions alongside North
American and Australian jurisdictions. The country has one of the lowest
corruption perception index in Africa.

 

Mining is a significant contributor to the country's GDP and its main source
of foreign currency income.

 

While Botswana has been producing copper since the early middle-ages and on an
industrial scale since the 1960s, recent discoveries in the KCB have triggered
a marked increase in interest for this emerging world-class copper province.
While impressive copper deposits such as Zone 5 have already been put in
production, exploration in the KCB is still in its infancy and more major
discoveries can be expected.

 

Consideration

 

The Agreement gives Altona an exclusive option to acquire an up to 85%
interest in the Tenement in consideration for payments in three tranches
spread over a period of four years totalling USD 110,000 in cash and USD
250,000 in Altona shares, with phased exploration technical and expenditure
commitments.

 

These payments will be broken down as follows:

 

·    USD 10,000 in cash and USD 50,000 in Altona new ordinary shares
("Shares") upon satisfaction of the final agreement's conditions precedent.
The Shares will be issued at the VWAP for the 10 days before the signature of
the final agreement,

·    USD 50,000 in cash and USD 100,000 in Shares 12 months later, upon
start of phase 2. The Shares for this phase will be issued at the VWAP for the
10 days before the start of phase 2.

·    USD 50,000 in cash and USD 100,000 in Shares 18 months later upon
start of phase 3. The Shares for this phase will be issued at the VWAP for the
10 days before the start of phase 3.

 

In addition, Altona has paid an exclusivity fee of USD 10,000 upon signing of
the option agreement.

 

Should a resource of over 20 million tonnes at over 1% Cu equivalent be
defined, the original Tenement owner will also be entitled to a one-off
payment of USD 250,000 in cash and USD 250,000 in Shares. These Shares will be
issued at the VWAP for the 10 days before the announcement of the
corresponding resource statement.

 

Post this period, non-funding parties will be diluted according to a standard
straight line dilution formula and, if their interest falls below 10%, it will
be replaced by a 1% Net Smelter Royalty.

 

Next steps

 

Initial exploration work will include a combination of geochemical and
geophysical exploration methods which will be deployed during the course of
2024. Soil sampling associated to ionic leach assays is particularly suitable
for the KCB context, in which the substratum is blanketed by a sand cover of
varying thickness. Detailed magnetometer survey will allow a detailed mapping
of lithology and structures while induced polarization will allow the direct
localisation of disseminated sulphides to allow accurate reconnaissance
drilling planning.

 

Cedric Simonet, CEO of Altona, commented: "We are delighted with the option
agreement for the Sesana copper and silver Project, located in the heart of an
emerging copper province where world-class discoveries have already been
proven through mine development. Furthermore, Botswana is considered as one of
the best mining destinations in the world and much remains to be discovered.

 

"Past exploration along the KCB has focused on the along-strike extensions of
initial discoveries, ignoring some of the numerous parallel folds that
recurrently bring the D'Kar / Ngwako Pan formations contact near the surface.
Recent interpretation of regional airborne geophysics data clearly shows this
contact passing through the Sesana Project area, giving us a high level of
confidence in its potential.

 

"The acquisition of the Sesana Project is in line with the implementation of
Altona's portfolio diversification strategy. This, and the recently acquired
Kabompo South critical raw materials project in Zambia, is expected to
generate news flow at a relatively low cost and will complement our flagship
Monte Muambe rare earths project in Mozambique."

 

This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended).

 

To subscribe for RNS alerts, please visit:
https://www.altonare.com/investors/regulatory-news-alerts/
(https://www.altonare.com/investors/regulatory-news-alerts/)

 

-ends-

 

Altona Rare Earths Plc

Cedric Simonet,
CEO
+44 (0) 7778 866 108

Louise Adrian,
CFO
+44 (0) 7721 492 922

Christian Taylor Wilkinson, Business
Development
+44 (0) 7795 168 157

 

Novum Securities Ltd (Corporate
Finance)
+44 (0) 20 7399 9400

David
Coffman

Daniel Harris

 

Allenby Capital Ltd (Joint
Broker)
+44 (0)20 3328 5656

Kelly Gardiner / Guy McDougall (Sales)

Nick Athanas (Corporate Finance)

 

Optiva Securities (Joint
Broker)
+44 (0) 20 3411 1882

Daniel
Ingram

 

About Altona Rare Earths Plc

 

Altona is a resource exploration and development company focused on Critical
Raw Materials in Africa. The Company is listed on the Main Market of the
London Stock Exchange with the ticker "REE".

 

Rare Earths are a group of 17 chemical elements, many of which are critical to
the World's ongoing transition from carbon-based to renewable energies, and to
the defence and communication sectors.

 

The Company is currently developing Monte Muambe, its flagship Magnet Rare
Earths Project, located in Northwest Mozambique. The Project was acquired in
June 2021, and the Company has so far drilled over 7,800m, and defined a
maiden JORC Mineral Resource Estimate of 13.6 million tons at 2.42% TREO. A
Competent Person Report including the Scoping Study for Monte Muambe was
published on 18 October 2023. The Project is now at Prefeasibility Study
stage, with a focus on metallurgical testing and process.

 

Altona is presently diversifying its portfolio by acquiring a limited number
of critical raw material projects to complement Monte Muambe. The acquisition
of the Kabompo South copper project in Zambia and of the Sesana copper-silver
project in Botswana represents the first steps towards the implementation of
this expanded strategy.

 

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