•Xtract has conditionally been appointed as contractor to oversee and commence initial production from the Kalengwa dumps of approximately 1.34 million tonnes with a potential to contain 25,000 tonnes of copper metal
•Xtract and KPZ have agreed a 90-day due diligence period following completion of which, should Xtract wish to proceed to act as contractor, Xtract will pay USD200,000 to KPZ to be settled through the issuance of new Xtract ordinary shares
•Kalengwa Mine produced in the 1970s and is believed to have been one of the highest grade copper deposits in Zambia
•High grade ore in excess of 26% Cu are reported to have made up approximately 20% of the ore body which was trucked for direct smelting at copper belt mines
•Xtract intends to commence a simple ore sorting programme, building up to a more significant ore processing operation within the next 8 months, with an annual production target rate of 6,000 tonnes of copper metal
•Xtract will receive, if it elects to proceed as Contractor, 33.33% of net profits from the operations and will incur the further estimated capital cost as set out below
•An exploration programme will determine the extent of previously reported potential strike extensions to the North and South of the historic open pit to determine the potential for a new open pit operation
Kalengwa Processing Project Summary
Kalengwa is located in the North-western province of Zambia 800 km north-west of Lusaka and 400 km south-west of Kitwe. KPZ, has been awarded a large-scale exploration permit 24401-HQ-LEL, which was issued on 2 April 2019 and is valid for an initial period of 4 years.
The Kalengwa Copper Mine is believed to have been one of the highest-grade copper mines in Zambia. It paid for its own infrastructure which at the time was in a remote location south of the main Zambian Copper belt. A mineralised high-grade supergene core was reported to have yielded an average grade of 27% Cu, making up approximately 20% of the ore body, which was trucked unprocessed to Kitwe for direct smelting. Total production of 1.9 Mt of 9.44% Cu and 50 g/t Ag was reported from the open pit resulting in circa 15,000 tonnes of copper production per annum for 12 years of production. Kalengwa Mine was owned and managed by Roan Consolidated Mines Ltd. from 1970 to 1982, who were also the proprietors of Mufulira, Luanchya, Chambishi and Chibuluma Mines.
Kalengwa is believed to belong to the iron-oxide-copper-gold (“IOCG”) deposit type which includes, amongst many others, Olympic Dam and Ernest Henry in Australia. The confirmed occurrence of intrusive igneous bodies in the mine vicinity is encouraging as such bodies typically act as source rocks/conduits for substantial IOCG mineralisation. Blackthorn Resources has defined over 1 million tonnes of copper in situ at its Kitumba project 180 km south-east of the Kalengwa Copper Mines based on IOCG copper mineralisation style. Similarities to Kalengwa include host rock age, regional scale faulting and the presence of intrusive source rocks.
The Board of Xtract believe that it is likely that only the upper supergene mineralisation was exploited at Kalengwa and that operations terminated when Roan Consolidated Mines believed that they had exhausted the high-grade supergene core. Previous drilling of the orebody down-plunge and on the north-east and south-west flanks of the open pit have demonstrated that further resources may potentially remain unexploited in these areas. Xtract believes that additional drilling has the potential to significantly increase the historically reported resources. There is a historic resource, which was prepared in 1998 but is not compliant with a recognised standard and which has not been subsequently updated or verified (“Non-JORC compliant Resource”), of 1.45Mt @ 2.50% Cu (for 36,300 tonnes of copper metal) at the Kalengwa Mine (Source: African Minerals Ltd, Assessment of Kalengwa Mine, 1998, as reported by Lunga Resources Ltd, 2013).