Chilibwe Copper Project
North Central Zambia
The Chilibwe Copper Project consists of large scale exploration licence 22118-HQ-LEL and is located 30 km northeast of Kitwe in the Copperbelt province in north central Zambia.
The region is characterised by an elongate NW-SE trending antiformal dome known as the Kafue Anticline, which is unconformably overlain by the Neoproterozoic Katangan Supergroup sequence that plays host to several world-class sediment hosted copper deposits.
The licence is situated on the eastern flank of the Kafue Anticline, sandwiched between two large scale operating and historic copper mines. Eurasian Resources Group’s Frontier Mine (289.2 Mt @ 1.16% Cu) is located just 2.8 km to the southeast across the DRC border, and the historic Mufulira mine (332.1 Mt @ 3.15% Cu) is 13km to the northwest.
Given its proximal location to two world class copper deposits and underlying geology reflective of mineralised sequences found in the Copperbelt, the licence is considered highly prospective for further discovery of sediment hosted copper deposits of a similar nature.
On 10 October 2024 Xtract entered into an exclusive collaboration agreement with Chilibwe Mining Limited (Chilibwe) in relation to large scale exploration licence 22118-HQ-LEL for a period of 24 months. The Agreement allows Xtract to further its exploration and development strategy, without any funding commitment, under terms of the agreement, Xtract will obtain funding and assist in management of exploration with a view to advancing the project towards application of a mining licence.
The fee for the Services payable to Xtract is as follows:
i) a 25% shareholding in Chilibwe and / or 25% interest in the Business (“Xtract Fee Shares”), and in the event of a Trigger Event will be due to be issued early as set out further below; and
ii) 25% of any dividends due to be paid by Chilibwe in relation to the Business (the “Fees”)
Trigger Event for payment of the Xtract Fee Shares
In the event of (i) the completion of funding for the Project; or (ii) a proposed change of control of Chilibwe and or sale of equity in Chilibwe; or (iii) Chilibwe entering into a joint venture or similar arrangement in relation to the Licence, Business or Project (a “Trigger Event“), then Xtract has the right to be immediately issued the Xtract Fee Shares which will represent 25% of Chilibwe’s fully diluted issued share capital (as enlarged by the issue of the Xtract Fee Shares and assuming the exercise of all other options or other rights to subscribe for Chilibwe shares).
No commitment to obtain financing
Xtract has made no commitment to provide any funding itself to the Project pursuant to the Agreement. Furthermore, Xtract has made no representation or commitment that it will be able to obtain funding for the Project. Any funds provided to Chilibwe by Xtract or spent on the project by Xtract (“Xtract Loan“) can at Xtract’s election be converted into shares in Chilibwe based on the funds provided by Xtract and by Chilibwe (“Loan Conversion Shares“).
Exclusivity & break fee
Chilibwe has appointed Xtract as its sole and exclusive agent for 24 months in relation to the Services (the “Exclusivity Period“). If Chilibwe accepts funding from another party in the Exclusivity Period then it shall within 7 days: (i) pay a break fee to Xtract of US$500,000 (the “Break Fee“); (ii) issue the Xtract Fee shares (if not already issued); and (iii) issue any Loan Conversion Shares / or make any Xtract Loan repayments.
