Joint Venture Agreement
Xtract has entered into a joint venture agreement with Oval Mining Limited (“Oval”) relating to the exploitation of small-scale production licence 29805-HQ-SML (the “Licence”). Under the terms of the Agreement, Xtract and Oval have agreed that the net profit of the Kakuyu Project will accrue as to 60% to Xtract and 10% to Oval. Both Oval and the Licence Holder are Zambian-based entities. The balance of 30% will accrue to Kakuyu Mining Limited (the “Licence Holder”).
During the term of the joint venture, Oval will act as mining contractor with responsibility for all aspects of the mining operation, while Xtract will appoint a project manager to oversee the Kakuyu Project and will be responsible for the management and implementation of exploration and resource development, together with all costs associated with exploration and the delineation of mineral resources and reserves with a view to extending the life of mine of the Kakuyu Project.
The parties have agreed that the ore will be sold to a company with the requisite expertise and infrastructure located in Zambia and an agreement has been approved in principle with a nearby mineral processing contractor.
Kakuyu Hill Pit
The Kakuyu Hill pit has been worked historically (although there is no historic data) to the extent that benches have been put in place to open up the pit. There are also underground artisanal workings with tunnels and a collapsed shaft. Oval Mining has removed bulk samples of the potential higher-grade sulphide ores from the pit which have been hand-sorted and stockpiled on site, targeting grades of >2% Cu. A site has also been created south of the pit for the new waste rock dumps.
In order to understand further the deposit morphology and mineralisation potential at Kakuyu Xtract plans an exploration programme of ground geophysics with follow up drilling on identified targets. Initial field investigations by Xtract have already defined several copper targets offering potential to extend the existing in-pit mineralisation along-strike to the East and West and increase the projected mine life of the operation. In addition, a large soil anomaly extending over an east-west trending strike length of approximately 1.4km has been defined which is coincident with a hydrothermal breccia of the same composition as the hosting mineralisation in the open pit.
A 250t bulk sample has been delivered to the Jubilee Metals refinery in Kabwe for preliminary metal recovery test work ahead of negotiations for the future processing of ore production.