15th Jul 2019 18:04
(Alliance News) - Xtract Resources PLC on Monday said it will act as a contractor for the Kalengwa processing project on the copper mining license, located in the central part of Zambia.
The mining company said it has signed a memorandum of agreement with KPZ International Ltd and has conditionally been appointed as contractor to oversee and commence initial production from the Kalengwa dumps of 1.34 million tonnes with a potential to contain 25,000 tonnes of copper metal.
The partners 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. Xtract said it plans to settle the sum through the issue of new shares to KPZ.
Xtract will receive, if it elects to proceed as contractor, a third of net profits from the operations and will incur the capital costs of up to USD1 million.
Looking ahead, Xtract said it intends to start a simple ore sorting programme, building up to a more significant ore processing operation within the next eight months, with an annual production target rate of 6,000 tonnes of copper metal.
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, Xtract explained.
"I am pleased to have completed this processing arrangement which makes immediately available to us, relatively high-grade dump material for processing. We will also commence exploration operations to identify the possible extensions of the open pit ore both on strike and depth," said Executive Chair Colin Bird.
He added: "The redevelopment of Kalengwa should create job opportunities for the local community."
Xtract shares closed 3.0% lower on Monday in London at 1.12 pence each.
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