5th Mar 2019 17:53
LONDON (Alliance News) - Xtract Resources PLC on Tuesday said it has entered into an agreement with KPZ International Ltd for a 50% interest in the Eureka copper-gold project in Zambia.
Xtract will spend up to USD200,000 to assess Eureka's suitability for a resource drilling programme and feasibility study. Should Xtract choose not to proceed with the project, it must turn over all results and information from this assessment.
Should Xtract proceed, then - by no later than October 1, and after the suitability assessment - it has the option to acquire up to 50% of Eureka for the amount expended during its initial exploration.
By December 1, Xtract must present a detailed budget to KPZ to continue to scoping study and if KPZ wants to fund their 50% share of scoping study costs is must confirm its decision by February 2020 with both partied equally funding the project.
However, if KPZ does not wish to continue, its share in Eureka will drop to 25% and Xtract's will rise to 75%.
Xtract may withdraw from the Eureka project at any time if it decides the project is unsuitable for investment but will forfeit all project rights in doing so.
Caledonia Mining Corp PLC explored Eureka from 1994 to 2006 and completed a short reverse circulation drill programme. The best intersection was 25.7 metres at 3.3% copper and 0.3 grammes of gold per tonne of ore, including 9.7 metres at 5.9% copper and 0.3 grammes of gold per tonne of ore.
"This option is for a large concession with a well-defined strike and splays that have not been fully investigated. We believe there is potential for a large mineralised body as previous work was relatively superficial and did not pursue targets which are valid today," said Xtract Executive Chair Colin Bird.
"Only in recent years has their potential been revisited and then only with direct-to-surface mineralisation exposure. The previous works, whilst limited, were 3 dimensional which provides a platform for an exploration programme that may lead to a large-scale copper-gold resource," Bird added.
Shares in Xtract closed up 1.7% at 0.92 pence on Tuesday.
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