TIDMAFP
RNS Number : 8336W
African Pioneer PLC
23 August 2022
23 August 2022
African Pioneer Plc
("African Pioneer" or "the Company")
Central Africa Copperbelt Project Update
African Pioneer plc ("APP" or the "Company"), the exploration
and resource development company with projects in Namibia, Zambia
and Botswana is pleased to provide an update on the Option
Agreement and subsequent exploration programme entered into with
First Quantum and APP's 80% owned subsidiary African Pioneer Zambia
Ltd ("African Pioneer Zambia"). The Option Agreement covers four
Zambian exploration licences (the "Projects") held by African
Pioneer Zambia and was signed on 19 January 2022 and announced on
20 January 2022.
Highlights of the initial exploration work undertaken on the
Projects by First Quantum
-- pXRF assay results for the first two batches of soil samples
over targets within the Licences resulted in First Quantum
reporting "significant copper anomalies".
-- Sufficient mapping and sampling completed on the initial
anomalies to trigger immediate follow-up Air-Core drilling to
pre-define targets for detailed diamond drilling.
-- Targets defined to date represent a significant cumulative
strike length of anomalous copper in soils.
-- Targets are associated with rock types and regional structures diagnostic of Copperbelt-type mineralisation.
-- Completion of soil geochemical survey and mapping underway
and expected to outline further targets of merit.
-- Planned work as part of the Option Agreement, includes
completion of the soil geochemical surveys and associated pXRF in
soils, continued mapping of new target areas, Air-core drilling and
RC/diamond drilling.
The Projects comprises four exploration licences, 27767-HQ-LEL,
27768-HQ-LEL, 27770-HQ-LEL, and 27771-HQ-LEL, the subject of the
Option Agreement are located in the highly prospective Central
Africa Copperbelt in northwest Zambia, home to the largest
mineralized sediment- hosted copper province in the world. The
Licences are located less than 100km from First Quantum's giant
Sentinel copper mine and host similar aged rock types proven to
host the major copper deposits of the Copperbelt
Executive Chairman, Colin Bird commented "We are very pleased
that our partner has commenced exploration and largely completed
Phase 1 fieldwork and is already embarking on drilling. We look
forward to receiving further results from the geochemical soil
surveys and drilling results in due course" .
Additional Information as announced on 20 January 2022
First Quantum is one of the world's top 10 copper producers
operating in several countries including Zambia where it owns the
Sentinel and Kansanshi mines in Northwest Zambia and is known for
its specialist technical engineering construction and operational
skills which have allowed it to develop and successfully run
complex mines and processing plants. Colin Bird, the chairman of
African Pioneer, was a founder of and floated Kiwara Plc in around
2008 which discovered copper in northwest Zambia and was sold to
First Quantum in 2009 for U$260 million. First Quantum then
developed the Kiwara Plc projects into the Sentinel mine which is
the world's 14th largest copper mine.
The licence package covers part of the north-western extension
of the Zambian Copperbelt. The properties are located within
80-100km of First Quantum's giant Sentinel copper mine, one of the
largest copper mines in Africa, with current Measured and Indicated
Resources of 891Mt @ 0.45% Cu. They also lie close to the
Enterprise nickel deposit (37.7Mt @ 1.03% Ni) which is being
reportedly moved towards development.
The Projects lie on the Lufilian Fold Belt in the Domes region
of the Central African Copperbelt, straddling the western boundary
of the Kabompo Dome, underlain principally by rocks of the Lower
and Upper Roan, as well as the stratigraphically higher Kundelungu
and Nguba Groups. This geological package is similar in age and
rock type to that hosting the major copper deposits of the
Copperbelt, including Sentinel. Therefore, the licence areas are
considered to be strongly prospective for Copperbelt-type
copper/cobalt and/or nickel deposits. They are historically
underexplored, representing the westerly extension of the
Copperbelt which has not been investigated in detail, as previous
work focussed primarily on the central part of the zone.
On the Luamata South licence (27771-HQ-LEL), African Pioneer has
acquired a valuable exploration package arising from recent work by
MMG Zambia Ltd ('MMG') which highlights strong soil/airborne
magnetic targets that were not drill tested, as MMG pulled out of
Zambia. The Samuteba East licence (27770-HQ-LEL) was recently held
by Anglo American which also carried out airborne magnetic
surveying and reconnaissance soil sampling before exiting the
Copperbelt. The soil data highlights several copper anomalies of
considerable interest.
Summary of main commercial terms of the Option Agreement
Parties First Quantum Minerals Ltd, the Company, African Pioneer
Zambia, and the minority shareholders
of African Pioneer Zambia (the "Minority Shareholders").
---------------------------------------------------------- ----------------------------------------------------------
Initial Expenditure First Quantum has the right but not the obligation to
spend US500,000 on each of the exploration
licences 27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and
27771-HQ-LEL within 18 months. The
18 months period is extended a further 6 months for any
of the licences where First Quantum
has spent US$350,000 in the first 18 months. At this
stage First Quantum will not have earned
any shares in African Pioneer Zambia, just the right to
take one or more of the properties
into to the First Earn-In Period by issuing an Option
Exercise Notice.
---------------------------------------------------------- ----------------------------------------------------------
First Earn-In Period - Issue of Technical Report earns After sending the Option Exercise Notice, First Quantum
First Quantum 51% then have 2 years when it has the
right but not the obligation to prepare a Technical
Report in respect of the Property demonstrating
an Indicated Mineral Resource of at least 300,000 tonnes
of contained copper (the "Technical
Report Requirement"). First Quantum is to fund the
Technical Report and if it spends US$2M
on this in the 2-year period then it has an extra year
to complete the Technical Report. Once
the Technical Report is issued First Quantum has the
right to deliver the First Earn-In Exercise
Notice and be issued shares equal to a 51% shareholding
in African Pioneer Zambia. This will
also trigger the Second Earn-In Period
---------------------------------------------------------- ----------------------------------------------------------
Second Earn-In Period - Decision to Mine earns First In the Second Earn-In Period First Quantum shall have
Quantum further 24% so they own 75% the right but not the obligation to
complete all necessary mining, metallurgical and
development studies to establish a mine at
the Property and make public announcement that it
intends to proceed towards commercial development
of a Mine on the Property (a "Decision to Mine"). First
Quantum is to fund all costs related
to the Decision to Mine. Once First Quantum announces a
Decision to Mine First Quantum has
the right to be issued shares to increase its 51%
shareholding in African Pioneer Zambia to
75%.
---------------------------------------------------------- ----------------------------------------------------------
Funding once First Quantum at 75% Once First Quantum is at 75% then the parties have to
fund pro-rata and if they do not, they
will be diluted. If the joint shareholding of the
Company and the Minority Shareholders is
diluted to 10% then it converts into a 1% royalty which
would be paid 0.2% to the Minority
Shareholders and 0.8% to the Company.
---------------------------------------------------------- ----------------------------------------------------------
Joint Venture after First Earn-In Exercise Notice Once First Quantum has delivered the First Earn-In
Exercise Notice the parties will be deemed
to have established a joint venture.
Prior to the making of a Decision to Mine (which
announcement shall be in the sole discretion
of First Quantum), the allocation of Joint Venture
Expenditure shall be made by the Participants
in proportion to their respective Participating
Interests, provided that First Quantum shall
be responsible for Joint Venture Expenditures relating
to its completion of all necessary
mining, metallurgical and development studies
contributing to the Decision to Mine.
---------------------------------------------------------- ----------------------------------------------------------
Sale restrictions The Company needs First Quantum approval to sell and
must give First Quantum first refusal
rights and First Quantum cannot sell without the consent
of the Company.
---------------------------------------------------------- ----------------------------------------------------------
Tag along rights If First Quantum wants to sell their African Pioneer
Zambia shares to a third party, then
the Company and the Minority Shareholders can require
that the third party also buys their
African Pioneer Zambia shares on the same terms.
---------------------------------------------------------- ----------------------------------------------------------
Excluded Licence Exploration licence 27769-HQ-LEL will be transferred
from African Pioneer Zambia to a new
Zambian company to be owned 80% by the Company and 20%
by the Minority Shareholders.
---------------------------------------------------------- ----------------------------------------------------------
Representations & warranties The parties have made representations & warranties
customary for an agreement of this nature
---------------------------------------------------------- ----------------------------------------------------------
African Pioneer Plc
Colin Bird
Executive Chairman +44 (0)20 7581 4477
Beaumont Cornish (Financial Adviser)
Roland Cornish +44 (0) 020 7628 3396
Novum Securities Limited (Broker)
Jon Belliss +44 (0) 20 7399 9400
or visit https://africanpioneerplc.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").
Qualified Person:
Technical information in this announcement has been reviewed by
Edward (Ed) Slowey, BSc, P.Geo, a technical adviser to African
Pioneer Plc. 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 this announcement.
Glossary
A 'Mineral Resource' is a concentration or occurrence of solid
material of economic interest in or on the Earth's crust in such
form, grade (or quality), and quantity that there are reasonable
prospects for eventual economic extraction. The location, quantity,
grade (or quality), continuity and other geological characteristics
of a Mineral Resource are known, estimated, or interpreted from
specific geological evidence and knowledge, including sampling.
Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured
categories.
An 'Indicated Mineral Resource' is that part of a Mineral
Resource for which quantity, grade (or quality), densities, shape
and physical characteristics are estimated with sufficient
confidence to allow the application of Modifying Factors in
sufficient detail to support mine planning and evaluation of the
economic viability of the deposit.
"Cu" Copper
"Mt" million tonnes
"Ni" Nickel
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END
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