REG - Xtract Resources plc - Additional Zambian exploration licences

Xtract ResourcesAnnouncement

30/05/2024 10:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240530:nRSd4538Qa&default-theme=true

RNS Number : 4538Q  Xtract Resources plc  30 May 2024

 

30 May 2024

Xtract Resources Plc

("Xtract" or the "Company")

Additional Zambian Joint Venture Exploration Licences

 

The Board of Xtract Resources Plc ("Xtract" or the "Company") is pleased to
announce that the Company has on 29 May 2024 entered into an addendum to
restate the existing joint venture agreement with Cooperlemon Consultancy
Limited ("Joint Venture Agreement") in relation to the exploration for copper
in Zambia as previously announced on 24 August 2023. The addendum adds three
additional large scale exploration licenses in Northwest Zambia (the
"Additional Licences") to the joint venture.

 

Highlights

 

·    The existing joint venture is in relation to large scale exploration
licenses 29123-HQ_LEL and 30459-HQ-LEL in Northwest Zambia (the "Original
Licences").

 

·    The Additional Licences and the Original 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.

-     all in a highly prospective part of NW Zambia where competition for
exploration licences is acute and in aggregate form a combined area over the
five licences of 173,586 hectares

 

·    The 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 on the Additional Licences
and initial fieldwork will commence early in the second half of the year with
a view to defining potential drill targets as soon as possible.

 

Colin Bird Executive Chairman said:

" It is no secret that I am enthusiastic on both copper and Zambia as a mining
jurisdiction. We are therefore very pleased that we have been able to add the
three Additional Licences to Xtract's joint venture with Cooperlemon
particularly given that they are adjacent to one of our original joint venture
licences with Cooperlemon. All the joint venture 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 on the three additional
licences 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 look
forward to updating the market on exploration activities."

 

 

Restated Agreement

The restated joint venture agreement with Cooperlemon Consultancy Limited
("Cooperlemon") is in relation to the exploration for copper at the Original
Licences and the Additional Licences  in Northwest Zambia (together the
"Licences"). Under the restated joint venture agreement (the "Restated
Agreement"), Xtract has agreed the following additional key terms in addition
to those in the joint venture which was announced on 24 August 2023.

 

 

Earn-in and Phase 1 exploration budget for the Additional Licences

Xtract will earn a 65% interest in the Additional Licences by funding
exploration expenditure of not less than US$500,000 on each of the three
Additional Licences over an initial two-year period commencing on the date of
the Restated Agreement ("Additional Licences Phase 1"). As previously
announced, Xtract will earn a 65% interest in the Original Licences by funding
exploration expenditure over an initial two-year period commencing on 23
August 2023 ("Phase 1") on the Original Licences of not less than US$2 million
and in aggregate therefore, Xtract's commitment under the Restated Agreement
amounts to US$3.5 million.

 

If results are positive at the end of the Additional Licences Phase 1 period a
joint venture company ("JV company") in relation to the Additional Licences
will be formed and this JV Company will then raise funds to further develop
the Additional Licences with the objective of achieving Positive Exploration
Results. For this purposes Positive Exploration Results means drilling results
that prove continuity of mineralisation at grades suggesting the potential for
the future development of a Mineral Resource of not less than 500,000 ("five
hundred thousand") tonnes of contained copper at grades consistent with
Economic Recovery achievable at the depth of discovery. Economic Recovery is
defined as a project which has a minimum IRR ("internal rate of return") of
not less than 25% and a payback period not exceeding 42 months including
recovery of capital expenditure. Xtract anticipates funding this exploration
expenditure from existing resources and current ongoing operational
activities.

 

Consequence of Trade Sale during the Additional Licences Phase 1 period

If there is a trade or any other sale or joint venture of the Additional
Licences during the Additional Licences Phase 1 period then Xtract will be
deemed to have a 50% interest in the Additional Licences.  A sale requires
the agreement of both Xtract and Cooperlemon.

 

The of the terms and conditions of the original joint venture as announced on
24 August 2023 in respect of the Original Licences otherwise remain unchanged
by the Restated Agreement.

 

Further information on the Additional Licences

The Additional Licences are located in North-West Zambia close to the
Democratic Republic of Congo (DRC) border and the following details are as
published on the Zambia Mining Cadastre,

 

Large Scale Exploration Licence No: 30458-HQ-LEL comprises 23,833 hectares and
is adjacent to the east of existing Large Scale Exploration Licence No:
20459-HQ-LEL. The licence was granted on 24 July 2023 and expires on 23 July
2027 and is held by Far North Enterprises Limited ("Far North"). Far North is
a privately-owned Zambian company,

 

Large Scale Exploration Licence No: 21851-HQ-LEL comprises 18,808 hectares and
is adjacent to the north of existing Large Scale Exploration Licence No:
20459-HQ-LEL. The licence was granted on 10 October 2017 and expires on 9
October 2026, is held by Kalupa Resources Limited ("Kalupa"). Kalupa is a
privately-owned Zambian company.

 

Large Scale Exploration Licence No: 23,196-HQ-LEL comprises 23,196 hectares
and is adjacent to the east of the new Additional Large Scale Exploration
Licence No: 21851-HQ-LEL. The licence was granted on 20 October 2017 and
expires on 9 October 2026, is also held by Kalupa.

 

As previously announced, the Original Licences are owned by Oval Mining
Limited ("Oval") and Far North. Oval, Far North and Kalupa have each agreed
with Xtract to be bound by the terms and the conditions of the Restated
Agreement with Cooperlemon (who is acting on their behalf) as though they were
a party to the Restated 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 reduce -
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 four of the Licences, reported in 2023
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 background

Cooperlemon is a private Zambian based mining consultancy firm and 50% owned
subsidiary of Zambian based Oval. Cooperlemon provides consultancy services to
Oval and third parties (including Far North and Kalupa) in respect of mining
related community empowerment and social development and mine rehabilitation,
engineering and design. The executive directors and principal shareholders of
Cooperlemon are Tolayi Sikumba and Lukonde Makungu.

 

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.

 

Important Notice:

Beaumont Cornish Limited ("Beaumont Cornish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
acting as nominated adviser to the Company in connection with this
announcement and will not regard any other person as its client and will not
be responsible to anyone else for providing the protections afforded to the
clients of Beaumont Cornish or for providing advice in relation to such
proposals. Beaumont Cornish has not authorised the contents of, or any part
of, this document and no liability whatsoever is accepted by Beaumont Cornish
for the accuracy of any information, or opinions contained in this document or
for the omission of any information. Beaumont Cornish as nominated adviser to
the Company owes certain responsibilities to the London Stock Exchange which
are not owed to the Company, the Directors, Shareholders, or any other person.

Forward Looking Statements

Certain statements in this announcement are or may be deemed to be forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'' ''could'' "should" ''envisage''
''estimate'' ''intend'' ''may'' ''plan'' ''will'' or the negative of those
variations or comparable expressions including references to assumptions.
These forward-looking statements are not based on historical facts but rather
on the Directors' current expectations and assumptions regarding the Company's
future growth results of operations performance future capital and other
expenditures (including the amount. Nature and sources of funding thereof)
competitive advantages business prospects and opportunities. Such forward
looking statements reflect the Directors' current beliefs and assumptions and
are based on information currently available to the Directors. A number of
factors could cause actual results to differ materially from the results
discussed in the forward-looking statements including risks associated with
vulnerability to general economic and business conditions competition
environmental and other regulatory changes actions by governmental authorities
the availability of capital markets reliance on key personnel uninsured and
underinsured losses and other factors many of which are beyond the control of
the Company. Although any forward-looking statements contained in this
announcement are based upon what the Directors believe to be reasonable
assumptions. The Company cannot assure investors that actual results will be
consistent with such forward looking statements.

 

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
                  (https://www.google.com/search?sca_esv=557690181&sxsrf=AB5stBjhxX6G6Qr9QCwsNKpnGW8dZK21Vg:1692248337700&q=elongated&si=ACFMAn8hzZSJQsgXIYlkGc-z1vmp52LAgeF2zUA4NBLDnyfJskqrOSkOGpfSK9DyM5vYjXr2xoQf-nXCmbhDWEZUMAVtSlMVww%3D%3D&expnd=1)
                   block of the earth's crust lying between two faults
                  and displaced downwards
                  (https://www.google.com/search?sca_esv=557690181&sxsrf=AB5stBjhxX6G6Qr9QCwsNKpnGW8dZK21Vg:1692248337700&q=downwards&si=ACFMAn8hzZSJQsgXIYlkGc-z1vmpYFRmwmlqsQDtJonKyTBCAt60v_VSA3JRcbxJPw_HV_Ry0o-WrMn57HUu33Zyf1tbgxyhoQ%3D%3D&expnd=1)
                   relative to the blocks on either side, as in a rift
                  (https://www.google.com/search?sca_esv=557690181&sxsrf=AB5stBjhxX6G6Qr9QCwsNKpnGW8dZK21Vg:1692248337700&q=rift&si=ACFMAn_T3xqeJgfJp8osGFUeHxua9ivsuvP9kKdJALo9h8rNFYGpCsKY7h8euuGLDcXRhYYtfOLb9Q9AaIDkXm71St5BiFjYgQ%3D%3D&expnd=1)
                   valley

 "hectare"        A metric unit of square measure equal to 2.471 acres or 10,000 square metres.

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

 

ENDS

 

 

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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  JVEEAPSEDANLEEA