Option Agreement for Buffalo Copper / Gold Project
23 April 2019
Bezant Resources Plc
("Bezant" or the "Company")
Option Agreement for Buffalo Copper / Gold Project, Zambia
Bezant (AIM: BZT), the copper-gold exploration and development company, is pleased to announce that it has entered into a binding memorandum of agreement with KPZ International Limited ("KPZ") (the "MOU" or "Agreement") granting the Company a conditional option to acquire a 50 per cent. interest in small scale copper mining licence number15164-HQ-SML in The Republic of Zambia (the "Licence") which contains the Buffalo exploration project (the "Buffalo Project").
Under the terms of the Agreement and as consideration for such 50 per cent. interest in the Buffalo Project, Bezant is required to complete an initial assessment of the Licence area at a cost of up to US$200,000 by 1 February 2020 (the "Initial Expenditure Phase") (the "Option"). Throughout the Initial Expenditure Phase, Bezant will retain the right, at its sole discretion, to cease expenditure on the initial assessment and withdraw from the Option, whereupon all other obligations under the Agreement would be terminated.
Highlights
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Low cost, 10 month project assessment |
All expenditure during the Initial Expenditure Phase to be invested directly in the Buffalo Project rather than being paid to the project's sponsors.
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Accessible underexplored iron oxide copper-gold ("IOCG") location |
The Buffalo Project is located 300km north west of Lusaka, accessed via tarred road and then 150km of gravel/dirt road from Kasempa town. The project is situated in the Central Zambian IOCG belt, which has long been recognised as being of high potential but which remains underexplored compared to the more well-established Zambian Copper Belt.
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Historic work includes drilling and current small scale activity |
Historic records of exploration and mining at the Buffalo Project exist from 1899, with a 6 per cent. copper zone reported by Rhodesia Congo Border Concession Limited in the 1920's from pitting in siliceous, brecciated and hematitic siltstone. Four diamond holes drilled in the 1960s by Chartered Exploration Limited recorded a best intercept of 28m at 1.07 per cent. Cu, including 6m at 1.87 per cent. Cu.
Limited small scale mining is taking place in the project area on obviously visible ore outcrops. After extraction, the ore is hand sorted to further upgrade the ore.
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Strong geological indicators |
Composite grab sample collected from the ore zone by Bezant assayed 3.17 per cent. Cu and 0.97g/t Au. Steeply dipping mineralised zone traced over 80m along strike and continuing into the hillside, 15-20m wide with central high grade gossan zone 3-5m across.
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Buffalo Project Summary
The Buffalo Project's copper-gold property comprises approximately 398 hectares within licence number 15164-HQ-SML and is located approximately 300km north west of Lusaka and accessed by a 150km gravel/dirt road from Kasempa, which is within the Zambian IOCG belt. The Licence was issued on 1 March 2013 and is valid for 10 years until 28 February 2023. Application is being made for the Licence to be extended to cover gold in addition to copper.
Historic third party reports note that the Buffalo copper prospect was first identified in 1899, through outcropping mineralisation on the side of a small hill. During the 1920s, pitting,
trenching, tunnelling and crosscutting were carried out into the hillside. This work reportedly discovered a high-grade (6 per cent.) copper zone at the base of the hill. Further trenching was undertaken in the 1960s followed by the drilling of four diamond drillholes. The best drill intersection obtained was 28m at 1.07 per cent. Cu, including 6m at 1.87 per cent. Cu. No gold assays were recorded.
Limited small scale mining is taking place in the project area on obviously visible ore outcrops. After extraction, the ore is hand sorted to further upgrade the ore.
The mineralised zone in the open pit trends northeast-southwest and is more or less vertical with mining advancing into the hillside towards the southwest where the zone can be seen to continue. This continuity was not recognised by previous explorers due to near-surface leaching of copper mineralisation. The mineralised zone is 15-20m wide, with a central high grade core about 3-5m across. A composite grab sample from blasted ore material was collected recently by Bezant and tested at the Geochemical Analytical Laboratory at the University of Lusaka School of Mines. This sample assayed 3.17 per cent. Cu and 0.97g/t Au, along with minor silver and trace cobalt.
The brecciated mineralised zone comprises soft, highly leached and weathered gossan, with much malachite, hematite and limonite throughout. The host rock is a siliceous, grey shale/
siltstone forming a well-marked hill. The mineralised zone has been exploited over a strike length of approximately 80m and remains open to the southwest into the hillside and possibly to depth.
No systematic drill testing has been carried out along strike or to depth, such that no resource estimate has yet been established.
Colin Bird, Executive Chairman of Bezant, commented:
"We have decided to pursue our copper mission in Zambia as the country has excellent copper mining fundamentals and is known to have transparent mining legislation. The Buffalo Project is a well established concession, which has the benefit of good historic work more directed to small scale mining. The Central Zambian IOCG belt has significant exploration potential, but has always played a secondary role to the main copper belt in Zambia to the north which has hosted many large, world-class underground copper mines.
"We will commence our initial assessment on clearly defined veins, with apparent significant strike and the potential future opportunity to commence small-scale mining supplying ore to third party processing plants. I am most pleased to have negotiated this Agreement and see the potential for achieving shareholder value enhancement in a stable jurisdiction with a long history of copper mining."
Laurence Read, CEO of Bezant, commented:
"This Agreement fits well with our global copper mission and we intend to swiftly assess and analyse all potential copper development opportunities for the Buffalo Project with a view to maximising value creation for all of our stakeholders."
Key Terms of the Agreement
Parties: The Agreement was entered into on 20th April 2019 by the Company and KPZ International Limited (the "Parties").
The Option: The Company has agreed to spend up to US$200,000 during the Initial Expenditure Phase in order to assess the suitability of the Buffalo Project for a resource drilling programme and has agreed to provide the results of such assessment to KPZ by 1 February 2020 (the "Initial Assessment"). The Initial Assessment its and associated expenditure shall be deemed as consideration for a 50 per cent. interest in the Licence should Bezant elect to exercise the Option.
Right to withdraw: The Company may at any time during the Option period withdraw, should it deem the Buffalo Project unsuitable for further investment and would thereupon i) forfeit any rights in respect of the Buffalo Project and ii) be required to provide KPZ with all information and results gathered during the Initial Expenditure Phase to the point of withdrawal.
Proposed Establishment of SPV: KPZ has agreed to incorporate a new local Zambian
special purpose vehicle to hold the Licence and all assets and liabilities associated with the Buffalo Project (the "SPV") by June 2019. KPZ will initially hold 100% (less 5% to be held by a local Zambian Shareholder) in the SPV. In the event that the Company completes the Initial Assessment and exercises the Option, Bezant will obtain a 50% shareholding in the SPV.
Potential scoping study: Assuming the Initial Assessment is successfully completed and the Option is exercised, the Agreement stipulates that Bezant will, by no later than 1 May 2020, present a detailed budget to KPZ to conduct initial test drilling and produce a scoping study on the Buffalo Project (the "Scoping Study"). Should KPZ wish to fund its 50 per cent. share of the Scoping Study costs, it will be required to so confirm by 1 June 2020 and each party will thereafter equally fund the project. If KPZ does not wish to provide 50 per cent. of the funding required for the Scoping Study, it will be diluted to a 25 per cent. equity interest in the SPV, with the Company's interest increasing to 75 per cent. in return for funding the entire Scoping Study.
For further information, please contact:
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Bezant Resources Plc Laurence Read Chief Executive Officer Colin Bird Executive Chairman |
Tel: +44 (0)20 3289 9923
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Strand Hanson Limited (Nomad) James Harris / Matthew Chandler / James Dance |
Tel: +44 (0)20 7409 3494 |
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Novum Securities Limited (Broker) Jon Belliss |
Tel: +44 (0)20 7399 9400 |
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or visit http://www.bezantresources.com |
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The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
Qualified Person's Statements
Geological information in this announcement relating to the Licence has been reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to Bezant. Mr Slowey is a graduate geologist with more than 40 years relevant experience in mineral exploration and mining, a founder member of the Institute of Geologists of Ireland and a qualified person under the AIM Rules. Mr Slowey has reviewed and approved the geological content of this announcement.
In accordance with the AIM Note for Mining and Oil & Gas Companies, June 2009 (the
"Guidance Note"), Colin Bird, CC.ENG, FIMMM, a South African and UK Certified Mine
Manager and Executive Chairman of Bezant, with more than 40 years relevant experience mainly in hard rock mining, is the qualified person who has reviewed and approved the technical information contained herein.
Notes to Editors:
Bezant's Copper-Gold Project Portfolio
The Mankayan Project, Philippines
The Guinaoang deposit is principally hosted by a 900m long by 400m wide north-south striking intrusive stock complex composed largely of quartz diorite porphyry. The igneous rocks have intruded a thick sequence of andesitic volcanics and a basement of biotite quartz schists and mafic flows. The size, grade and mineralogy of the deposit are typical of porphyry copper deposits.
From October 2011 to January 2014, the Mankayan Project was held under option by Gold Fields Netherlands Services BV ("Gold Fields") for a total exercise price of US$70m (of which US$9.5m was received by the Company by way of initial non-refundable option payments). The option ultimately lapsed, as Gold Fields began new operations in Australia, and all exploration data, including the results of the high-grade BR 60 drill hole completed by Gold Fields during the option period, was transferred to Bezant.
Eureka Project, Argentina
The Eureka Project covers in excess of 10 thousand hectares and is located in the north-west corner of the Jujuy province in northern Argentina, adjacent to the border with Bolivia and at an altitude of approximately 3,600 to 4,400 metres (above sea level). The tenements are situated within the Argentinean portion of the regionally extensive Bolivian-Argentinean Tertiary Belt (Puna-Altiplano high-plateau) and there are two major metallogenic associations present.
The property hosts the historical "Eureka Mine", which had been exploited by the Jesuits since the 17th century, with an artificial dam having been constructed for washing the gold extracted. Further industrial-style gold exploitation commenced in circa 1885 (Novarese 1893), alongside exploitation of the "La Perdida" (now called "El Torno") and the "San Francisco" mines. The most recent copper extraction occurred in circa 1949 and continued in sporadic form to 1975 (Coira et al 2002). The latest exploration activities in the area (1980-2001), were carried out by Mantos Blancos, Paramount Ventures and Finances and most recently, by Minera Penoles and Codelco. The Company is interested in 11 exploration licences covering the tenements.
Historic exploration resulted in non-compliant resource estimates from Minera Penoles in the order of 62 million tonnes grading at approximately 1% for copper (620,000 tonnes of copper) and from Mantos Blancos, of 600,000 tonnes grading at approximately 2.7 g/t of gold (52,000 ounces of gold).
The Company is currently developing and pursuing potential Joint Venture options for this project.
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