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 
----------------------------------------------------------  ---------------------------------------------------------- 
  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.


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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