20th Sep 2006 08:43
Zambezi Nickel Ltd20 September 2006 20 September 2006 Zambezi acquires Mavita Nickel Project • Mavita Nickel Project in Mozambique acquired from BHP Billiton • Mitaba Nickel Project diamond drill programme completed 12 August 2006 • High priority targets defined at Mitaba from ground IP results • Results of first-priority holes from Mitaba Zambezi Nickel Limited ("Zambezi" or the "Company") (AIM Code: ZNI), theAIM-quoted African nickel exploration and development company, today announcesthat a definitive contract has been signed with BHP Billiton Plc ("BHP Billiton") for the acquisition of the Mavita Nickel Project in Mozambique from BHP Billiton by Zambezi. Mavita Project transaction The Mavita Project comprises two prospecting licences, LPP 1045 and LPP 1046,located in the Manica province of central western Mozambique. Mozambique bordersZambia, where the Company currently operates. Mavita is well served by theregional road network, is adjacent to the Cahora Bassa power line, is 56km fromthe provincial airport at Chimoio and is 179km from the deep-water port atBeira. The geological setting of the Mavita Project area places it within theeastward extension of the Archaean Zimbabwean Craton. The Mavita Projectincludes several areas of significant aeromagnetic and stream sedimentgeochemical nickel anomalies, coincident with mapped ultramafic lithologies.None of these anomalies have been drill tested to date. The basic terms of the agreement with BHP Billiton are: • BHP Billiton will transfer the Mavita title to Zambezi and Zambezi will be the 100% owner and operator of the Mavita Project • Zambezi has agreed to spend a minimum of US$150,000 on the project over the next 18 months • BHP Billiton has the option to clawback 100% of the project anytime after the threshold of 200,000 tons of contained nickel equivalent metal at JORC inferred level is defined • BHP Billiton will reimburse Zambezi at 2.5 times all past expenditures upon clawback and pay Zambezi a 3% net smelter return during the life of the mine • BHP Billiton will earn a 3% net smelter return during the life of the mine if it does not exercise its option to clawback • BHP Billiton retains first right to be appointed as marketing agent and to purchase at commercial terms base and precious metals products from the project. In case of dispute over off-take commercial terms, BHP Billiton has the first right to match formal market offer BHP Billiton is the world's largest diversified natural resources company, withsome 37,000 employees across around 100 operations in approximately 25countries. Its operations encompass a broad range of commodities includingaluminium, energy coal, metallurgical coal, copper, manganese, iron ore,uranium, nickel, diamonds, silver and titanium minerals, oil, gas, and liquefiednatural gas. Commenting on the announcement, Paul Rankine, CEO of Zambezi said, "Today'sMavita deal brings additional value to the Company's portfolio at no immediatecost. Shareholders should note that the Company is also actively examining otheropportunities for possible acquisitions of nickel prospects in the SADC region." Mitaba Project update Zambezi completed a substantial diamond-core drilling programme on 12 August2006 that was designed to test targets at the Mitaba Project. The programmeconsisted of 20 holes for a total of 5,138 metres, of which 3,177 metres werefirst-priority holes. Besides fulfilling the main sampling objective, the drillcores will also provide material for metallurgical testwork, includingprocessing and recovery characteristics of any significant mineralisationintersected. Results received from first-priority holes are as follows: Drillhole Coordinates From To Interval Ni (m) (m) Width % (m) N EMHD001 8,266,264 715,453 10.40 47.00 36.60 0.25 55.50 81.55 26.05 0.27 87.00 145.00 58.00 0.26 MHD002 8,266,388 715,763 21.00 70.00 49.00 0.27 101.70 184.40 82.70 0.29 MHD003 8,266,757 716,502 175.80 214.00 38.20 0.24 MHD004 8,266,634 716,541 1.00 30.60 29.60 0.25 56.30 86.50 30.20 0.23 MHD005 8,266,642 716,698 99.60 132.40 32.80 0.30 160.00 183.00 23.00 0.29 MHD006 8,266,639 716,868 24.60 62.00 37.40 0.27 83.00 125.85 42.85 0.31 MWD001 8,264,520 710,411 147.00 227.00 80.00 0.22 267.00 327.00 60.00 0.22 MWD003 8,264,716 710,848 123.00 153.30 30.30 0.23 162.00 192.00 30.00 0.21 Coordinate system Arc50 UTM Zone 35S. Holes oriented at -55 degrees to anazimuth of 351 degrees magnetic. Mineralized intervals calculated on basis oflower cut-off of 0.2% Ni, minimum mineralized interval of 0.5m, maximum internalwaste of 1m, only mineralized widths greater than 25 metres reported here. During the first-priority drilling programme, a ground IP survey of the MitabaProject area was carried out to test for the presence of disseminated sulphidebodies. Significant anomalies were detected at both Mitaba Hill and Mitaba West,and in an area west of Mitaba West termed the Mitaba West Extension. Thesecond-priority holes have targeted these anomalies. The assay results of thisdrilling programme are expected by the end of September 2006. During the course of the second-priority diamond-drilling programme, geologicalevidence was observed that has lead to a reinterpretation of the geologicalmodel for the Mitaba project, from that of a lava-flow succession to that of alayered sill. The presence of mafic bodies within the dominantly ultramafic body, apparentlydistributed regularly throughout the sequence, was previously interpreted asreflecting the presence of more mafic tops to the ultramafic flows. Therecognition in drill core of contact metamorphic reactions adjacent to theboundaries of these mafic bodies however, confirms that they are intrusivedykes, a fact not apparent in surface outcrops due to preferential erosion ofthese soft zones. Furthermore, detailed geological logging has led to the recognition of severalpyroxene-rich layers within the ultramafic body, suggesting that the body wasoriginally a layered sill. The Mitaba body thus represents a large layered,mainly ultramafic intrusive body that has been intruded by a later mafic dykeswarm. This has implications for the potential for the presence of platinumgroup element (PGE) mineralisation, which is currently being assessed. For more information, please contact: Paul Rankine Laurence Read/Abigail Singleton Zambezi Nickel Limited Conduit PR Tel: +44 20 7193 3728 Tel: +44 20 7429 6666 Mob: +44 795 280 7110 Mob: +44 797 995 5923 A full report including figures is available on the Zambezi website atwww.zambezinickel.com The information in this report that relates to Exploration Results is based oninformation compiled by Mr Noel Sheppy, who is a Member of The AustralasianInstitute of Mining and Metallurgy. Mr Sheppy is employed by Ripley ResourcesPty Limited. Mr Sheppy has sufficient experience which is relevant to the styleof mineralisation and to the activity which he is undertaking to qualify as aCompetent Person as defined in the 2004 Edition of the 'Australasian Code forReporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Sheppyconsents to the inclusion in the report of the matters based on his informationin the form and context in which it appears. ADDITIONAL INFORMATION • African focused pure nickel exploration/development company • Admitted to AIM in October 2005, raising £1.6 million • Exploration rights over 3 prospects on 2 project areas (Mitaba & Paulwi) in Zambia • Strategy to aggressively explore and evaluate currently identified mineralisation • Strong position from which to evaluate and possibly acquire nickel prospects in the region • Exploiting shared cost/infrastructure opportunities with AIM quoted Zambezi Resources This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
BHP Group