TIDMXTR
RNS Number : 6355P
Xtract Resources plc
11 February 2019
For immediate release
11 February 2019
Xtract Resources Plc
("Xtract" or the "Company")
Zambia Copper Exploration Agreement
The Board of Xtract Resources Plc ("Xtract" or the "Company") is
pleased to announce that the Company has today concluded a
Memorandum of Agreement ( "Agreement") with a consortium
("Consortium") to jointly undertake exploration works on the copper
/ gold small scale mining license number 8370-HQ-SML ("Licence")
located at Kajevu, Kasempa, North Western Province In The Republic
of Zambia ("Matrix Project").
Highlights of the Agreement
-- Agreement to jointly undertake exploration work on the copper / gold Licence in Zambia
-- Matrix Project's breccia vein system extends for at least
3km, with initial target section of 800m within the Licence
-- Recent small scale open pit recovered high grade hand-picked
copper as well as alluvial gold nuggets
-- Selective grab samples taken from the pit outcrop indicate
values ranging between 3.99-7.28% Cu and 1.0-3.42g/t Au
-- Bulk sample material stockpiled at surface
-- Objective to identify a copper / gold resource within a period of 24 months
-- Xtract to acquire a 50 per cent. share in the project
-- Parties agree to jointly fund an exploration works programme up to US$1 million in aggregate
Colin Bird, Executive Chairman said: " The iron oxide copper
gold (IOCG) exploration potential in Zambia has not been fully
explored and several highly prospective opportunities exist. We
have identified the Matrix Project as being high in potential and
are currently investigating other areas which possess similar
potential. In developing our activities into Zambia, we are
providing a country balance and also introducing copper as a
commodity hedge against gold. The Board of Xtract believes that the
fundamentals for copper in the future are stronger than have been
experienced for a considerable time."
Matrix Project Summary
There is a small open pit trial mine approximately 150 metres
long and 15 metres deep that was previously developed over a
copper-gold mineralised, hydrothermally altered quartz vein zone
striking slightly north of west and dipping steeply towards the
north. At the western end of the pit a breccia zone of iron-rich
quartz is exposed within siltstone host rock over a minimum width
of 3 metres, with strong visible copper mineralisation in the form
of malachite and chalcocite throughout the matrix and on fractures.
Selective composite grab samples taken by the Company from the
exposed mineralisation at the western end of the main pit were
assayed by the Geochemical Analytical Laboratory at the University
of Lusaka School of Mines. These returned values ranging 3.99-7.28%
Cu, 1.0-3.42g/t Au. The pit operators did not have the necessary
equipment to process the ore but they reported recovery and sale of
high grade copper from hand-picked material, as well as recovery of
alluvial gold nuggets. Bulk sample material from the open pit was
stockpiled at surface for possible future processing.
The vein system can be traced continuously within the Licence
for at least 800 metres from the eastern end of the open pit to the
western margin of the Licence. The system continues to be strongly
altered and brecciated, with iron-rich matrix as seen at the
mineralised pit exposure, however there is no visible copper
mineralisation at surface outside the pit, probably due to
near-surface leaching. To the east the vein partly tracks outside
the license. Here it is generally less altered and brecciated, but
strong copper mineralisation is exposed in a trial digging within
the southeast corner of the license, more than 2 kilometres from
the open pit. A selective grab sample taken from mineralised
material at this locality returned assay values of 4.49% Cu,
2.94g/t Au.
The target can be classified as iron oxide copper gold (IOCG)
type. Several mineral deposits of this type have recently been
recognised in Zambia, genetically and spatially related to the
major sediment-hosted deposits of the nearby Copperbelt. They are
generally underexplored compared to the Copperbelt deposits. The
Matrix Project has not previously been systematically explored and
no historic drilling is known which might have tested its'
extension to depth.
Memorandum of Agreement
Background
The Memorandum of Agreement has been entered today by the
Company and the Consortium (the "Parties"). The Company has to date
been involved in gold and copper exploration and mining, while the
consortium has to date invested in assets within Africa. The
objective of the Agreement is to collectively undertake exploration
works on the Licence area and the intent of this agreement is to
identify a copper/gold resource which the Parties are targeting to
achieve within a period of 24 months.
Key terms of the Agreement
The parties have agreed to incorporate a special purpose company
("Newco") to acquire the shares of Starshine Mineral Exploration
Limited ("Starshine"), incorporated in the Republic of Zambia. This
Agreement shall come into force and effect upon signature and shall
endure for a term of 24 months. Xtract will hold a 50% share in
Newco with one of the two directors of Newco being a representative
of Xtract. Within 14 days of incorporation, Newco will be issued
with 90% shares of Starshine, with the remaining 10% of the
Starshine to held by a local shareholder (with no voting rights).
Xtract will appoint one of the two directors of the board of
Sunshine. The Licence is currently being transferred to Starshine.
Under the current licence agreement, only in the event that
Starshine builds a mine and commences production and reaches a
target of 15,000 tonnes of copper per annum for 15 years, an
aggregate amount of US$4,900,000 in deferred consideration will
become payable in 49 instalments of US$100,000 to the former
Licence holder.
Exploration programme
To date, the Consortium has undertaken preliminary studies at
the Matrix Project and the Parties have agreed that the preliminary
prospecting work shall be undertaken on the License within 6 months
from the date of the Agreement.
Upon completion of preliminary prospecting works and in the
event that the prospect is not worthy of development, none of the
Parties will be obliged to contribute any further funding.
Upon completion of the preliminary prospecting works and
agreement from both Parties to proceed, the Parties have agreed
that further detailed exploration work shall be undertaken on the
Licence area for a period of no more than 18 months from the date
of the Agreement.
Budget
The Parties have agreed that the total budget for exploration
works shall not exceed US$1,000,000, apportioned as follows:
-- US$200,000 in relation to preliminary prospecting works; and
-- US$800,000 in relation to detailed exploration works.
Early termination during the Exploration Works Period
-- Neither party shall be compelled to remain as a shareholder
in the event of a party requiring to exit as shareholder;
-- The exiting party shall have no claims against the Company or its shareholders;
-- The exiting party will ensure that it acts in good faith to
ensure that the remaining party has all the benefits and
obligations of the license.
Further details are available from the Company's website which
details the company's project portfolio as well as a copy of this
announcement: www.xtractresources.com
This announcement contains inside information for the purposes
of Article 7 of EU Regulation No. 596/2014 on market abuse. The
person who arranged for the release of this announcement on behalf
of the Company was Colin Bird, Director.
Enquiries:
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 and Michael Cornish www.beaumontcornish.co.uk
Joint Broker Felicity Geidt
Novum Securities Limited Colin Rowbury +44 (0)207 399 9427
Joint Broker www.novumsecurities.com
Qualified Person:
Information in this announcement relating to the Licence has
been reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to
Xtract. 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 is a Qualified
Person under the AIM rules. Mr Slowey has reviewed and approved the
geological content of this announcement.
Qualified Person:
In accordance with AIM Note for Mining and Oil & Gas
Companies, June 2009 ("Guidance Note"), Colin Bird, CC.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, is the qualified person as defined in the Guidance
Note of the London Stock Exchange, who has reviewed the technical
information contained in this press release.
TECHNICAL GLOSSARY
The following is a summary of technical terms:
"altered zone" a zone exhibiting change in mineralogical
composition of a rock commonly brought about
by reactions with hydrothermal solutions
"Au" Gold
"breccia/brecciated" rock fragmented into angular components
"chalcocite" A copper sulphide mineral, Cu(2) S, found
in zones of secondary enrichment of copper
ores
"Cu" Copper
"exploration" method by which ore deposits are evaluated
"g/t" gram per metric tonne
"grade" relative quantity or the percentage of ore
mineral or metal content in an ore body
"malachite" a green copper carbonate mineral (Cu(2) (OH)(2)
CO(3) ) which forms by alteration of copper
sulphide minerals
"mineralisation" process of formation and concentration of
elements and their chemical compounds within
a mass or body of rock
"quartz" a mineral composed of silicon dioxide, SiO2
"schist" and "schistose" a metamorphic rock with a platy or foliated
texture
ENDS
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END
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