Consolidates Ground in Greater Kasempa IOCG Dis...
African Consolidated Resources plc / Ticker: AFCR / Index: AIM / Sector: Mining
19 September 2011
African Consolidated Resources plc ('ACR' or the 'Company')
Agreement to Further Consolidate Ground in the Greater Kasempa IOCG District, NW
Zambia
African Consolidated Resources Plc, the AIM listed Southern African focussed
resource development company, is pleased to announce that it has, subject to
certain conditions, agreed to acquire a further large-scale mineral prospecting
licence known as 8584-HQ-LPL (the 'Licence') in north-west Zambia in the
vicinity of existing ACR licences in the area. Â The Licence incorporates 1,085
sq km of ground considered highly prospective for Iron Oxide Copper Gold
('IOCG') style mineral depositions and incorporates the historically productive
Kalengwa Copper/Silver mine including tailings and waste rock dumps. Â The
counter party to this agreement (the 'Agreement') is the current Licence holder,
Euro African Kalengwa Mining Ltd ('EAKM') which incorporates the local community
via the regional traditional Chieftain structures.
Overview
* Acquisition will include  the brown-field Kalengwa Copper-Silver Mine, dumps
and contiguous exploration ground covering 1,085 sq km in north-west Zambia
* Non-JORC resource estimate by previous operators of 1.6 million tonnes of
ore grading 2.2% copper, containing 36,000 tonnes of copper metal within the
brown-field mine site
* Strong potential to generate revenue from recommencement of production from
waste dumps and mine extensions to depth and along strike in near term
* Highly prospective exploration ground to significantly increase targets in
the greater Kasempa exploration area (the Kasempa Project) - the most
important targets being IOCG mineralisation models which were not well
understood by early explorers
* Considerable amount of technical data and drill core available from the
Zambian Geological Survey
* Imminent high definition aeromagnetic and radiometric survey planned to map
intrusive complexes, structures and alterations consistent with IOCG
systems
* New Licence is 8km west of the Company's existing IOCG target area - further
consolidates ACR's expanding IOCG interests in Zambia
* The acquisition is in line with the Company's strategy to expand its
portfolio of assets across Zambia and Southern Africa to complement its
proven Zimbabwean assets and diversify shareholder exposure
ACR Chief Executive Andrew Cranswick said, "The expansion of the Kasempa Project
area, combining high-priority, new IOCG targets with high-grade brown-field
targets is a milestone event for ACR in Zambia. Â It falls precisely within our
declared IOCG target strategy but with the added prospect of possible near-term
production from the immediate extensions of the pit at depth, along strike, and
within dumps and tailings, which are estimated to host approximately 1.6 million
tonnes of ore grading 2.2% copper, containing 36,000 tonnes of copper metal.
 This of course adds a dimension to our style and focus of exploration."
The Project Area
The Licence boundaries approximately 8km west of ACR's existing Kasempa IOCG
Project. Â IOCG deposits frequently contain valuable silver, cobalt, uranium,
phosphate or rare earth credits, and can be very large (500-3000 Mt ore), as
demonstrated at the Olympic Dam and Ernest Henry mines in Australia, and
Palaborwa in South Africa.
 The brown-field Kalengwa mine was one of the highest-grade and most profitable
copper deposits in Zambia when mined in the 1970s, and paid for its own
infrastructure in a remote location, south of the main Zambian Copperbelt. Â High
grade ore (>26%Cu) made up approximately 20% of the ore-body, most of which was
trucked unprocessed to Kitwe for direct smelting.
Total production according to Hitzman and Broughton, 2003, was 1.9 million
tonnes of 9.44% copper ('Cu'), and 50 g/t silver ('Ag'). Most of the mined
copper and silver minerals came from a massive chalcocite body enriched by
supergene concentration.
It is estimated by previous workers that a non JORC resource of approximately
1.6 million tonnes ('Mt') of ore grading 2.2% Cu containing 36,000 tonnes of Cu
metal is likely to be available in immediate extensions of the pit at depth,
along strike, and within dumps and tailings (see table 1).
The mine is considered one of the major exponents of IOCG deposits in Zambia.
The deposit was hosted by Katangan siliciclastic rocks and limestones. Â It
consisted of a tabular body of round-pebble hydrothermal breccias, calcareous
conglomerates, sandstones and siltstones replaced by primary copper sulphides
(chalcopyrite, bornite and chalcocite) surrounded by a large halo of red-rock
and brown-rock (hematite) alteration. Â An association of syenites and granites
seems to have produced the mineralisation.
ACR now has major interest in a large mineralised district of approx 40km x
40km extent, exhibiting numerous copper occurrences, associated with gold,
uranium and hematite-magnetite iron deposits. Exploration in the 1970s to 1990s
by Roan Consolidated Mines, Phelps Dodge, Zamanglo and others, delineated at
least six high-priority copper geochemical and geophysical anomalies that will
be immediately explored by mapping and geophysics followed by drilling.
De Beers in the 1970s also found numerous diamonds in the drainage area of ACR's
Kasempa Project, including 63 diamonds at a single site and an individual stone
of 0.4 carats in soils. Their work failed to provide a satisfactory explanation
for the results or any indication of source hence ACR's planned high-definition
aeromagnetic survey will also be carefully interpreted for kimberlite targets.
A large amount of technical data and drill core from the Kalengwa Mine is still
available from the Zambian Geological Survey. It is likely that the waste dumps
and mine extensions to depth and along strike can be bought into production
quite quickly.
Estimates of the copper resource (non-JORC) by previous workers are tabulated
below:
Table 1. Â Potential copper resources at the mine
+---------------------------+---------+----+------------+----------------+
| Mine | Tonnes |% Cu|Acid Sol. Cu|Contained Cu (t)|
+---------------------------+---------+----+------------+----------------+
|In-Pit Reserves (1978) | | | | |
+---------------------------+---------+----+------------+----------------+
|Intermediate grade ore | 43,951| 8.4| 2.9| 3,679|
+---------------------------+---------+----+------------+----------------+
|Low grade ore | 2,337| 2.1| 0.8| 50|
+---------------------------+---------+----+------------+----------------+
|Outside Pit (Wightman 1974)| | | | |
+---------------------------+---------+----+------------+----------------+
|1090-1040m levels | 226,000| 4.0| 0.2| 8,995|
+---------------------------+---------+----+------------+----------------+
|Limestone Marker | 79,500| 3.7| 0.7| 2,973|
+---------------------------+---------+----+------------+----------------+
|Conglomerate Marker | 104,500| 4.3| 0.8| 4,494|
+---------------------------+---------+----+------------+----------------+
|Low grade stockpile | 523,000| 1.6| -| 8,368|
+---------------------------+---------+----+------------+----------------+
|No. 6 Tailings Dam | 700,000| 1.2| -| 8,400|
+---------------------------+---------+----+------------+----------------+
|TOTAL |1,679,288| 2.2| Â | 36,958|
+---------------------------+---------+----+------------+----------------+
"For example, hole number MF 354, off the northeast end of the open pit,
intersected 19.5m grading 7.5 % Cu....the orebody has a northeasterly plunge and
has not been drilled to depth in that direction" (Watts, Griffis & McOuat,
1991).
Proposed Exploration
ACR has already carried out considerable historical data retrieval and GIS
compilation, and will undertake a full data review immediately. Exploration will
be focussed on two fronts:
1. short-term copper-silver production from the old mine; and
2. more "green-fields" exploration over the full 40km x 40km project area for
major new discoveries.
Mining consultants will be employed to further assess the historical data and
diamond drill core.
On regional targets, an ultra-detailed airborne magnetic and radiometric survey
will commence in September 2011, followed by ground gravity surveys to search
for iron-rich cores of IOCG style targets. This work, combined with over
223,000 historical soil geochemical samples, should deliver drill targets before
the end of 2011.
Purchase Agreement
The consideration payable in order to complete the Agreement (the 'Completion
Consideration') is linked to future proven resources to be established within a
period not longer than three years with reference to copper, silver and gold -
as certified as in accordance with JORC standards, in any category, at minimum
grade levels described below.
Subject to ACR proceeding with the Agreement (at the sole discretion of ACR
after it has completed a due diligence process, expected to be completed by mid-
October), a non-refundable cash deposit of $800,000 becomes payable. Â Total
initial costs including this and due diligence work are likely to amount to
$975,000.
The JORC Resource for the purpose of the Completion Consideration calculation is
limited to resources defined up to a depth from surface of 100 metres and
excludes any ore grade less than 1.5% in the case of copper; any ore grade less
than 35 grammes per tonne in the case of silver; and any ore grade less than
1.5 grammes per tonne in the case of gold.
The Completion Consideration is payable 30 days after completion of
certification of the copper JORC Resource and the silver JORC Resource, or such
date after 17 September 2012 as ACR elects, or on 17 September 2014, whichever
is the earlier. Â The Completion Consideration is payable 50% in cash and 50% in
ACR shares, or otherwise by mutual agreement. Â The ACR shares are to be priced
at the average price over the 15 business days prior to completion, which is 30
days before payment is due, or at 10p per share, whichever is the greater. Â Any
ACR shares so issued will be escrowed for 5 months from the latest date on which
they are liable to be issued.
The Agreement contemplates by concession and by mutual written agreement between
the parties that after 18 August 2012 progress payments may optionally be made
earlier against JORC Resources proven to that point provided that ACR's rights
are reasonably protected and that such payments form a part of the Completion
Consideration.
It is additionally provided that should an economic diamond discovery be made by
ACR within the Licence, then EAKM will retain a free carried equity interest of
20% therein until completion of first phase definition of a diamond JORC
Resource to a depth of depth of 100 metres. Â Any further expenditure on the
diamond discovery after that would be funded by EAKM and ACR in proportion to
their respective interest.
Other than the initial costs when incurred, the Agreement imposes no compulsory
monetary obligations at this point - all payments being at the sole discretion
of ACR as it chooses to continue. Â There is no obligation to proceed to
completion in the event of poor results or other unforeseen circumstances. Â ACR
is permitted to terminate the Agreement with 7 days' notice and in that event
the liability of ACR under the Agreement is limited to payments that it has made
prior to the termination.
**ENDS**
For further information visitwww.acrplc.com or please contact:
Roy Tucker African Consolidated Resources plc +44 (0) 1622 816918
+44 (0) 7920 189012
Andrew Godber Panmure Gordon (UK) Limited +44 (0) 207 459 3600
Callum Stewart Panmure Gordon (UK) Limited +44 (0) 207 459 3600
Abhishek Majumdar Panmure Gordon (UK) Limited +44 (0) 207 459 3600
Susie Geliher St Brides Media & Finance Ltd +44 (0) 20 7236 1177
Glossary
+----------------------------+-----------------------------------------+-------+
|Term |Explanation |Acronym|
+----------------------------+-----------------------------------------+-------+
|Au |chemical symbol for gold | |
+----------------------------+-----------------------------------------+-------+
|Ag |Chemical symbol for silver | |
+----------------------------+-----------------------------------------+-------+
|banded iron-formation |chemical sedimentary rock consisting of|BIF |
| |iron and quartz | |
+----------------------------+-----------------------------------------+-------+
|chalcocite |Copper Sulfide (Cu2S), an important| |
| |copper ore mineral | |
+----------------------------+-----------------------------------------+-------+
|Cu |chemical symbol for copper | |
+----------------------------+-----------------------------------------+-------+
|diamond drilling |Drilling method using a diamond-| |
| |impregnated cutting bit to obtain a core| |
| |sample of rock | |
+----------------------------+-----------------------------------------+-------+
|dip |the orientation of a planar geological| |
| |feature relative to horizontal | |
+----------------------------+-----------------------------------------+-------+
|disseminated sulphide |Accumulations of sulphide minerals where| |
| |the grains are separated by other| |
| |minerals and are not in physical contact| |
| |with each other. | |
+----------------------------+-----------------------------------------+-------+
|fault |a fracture or break within a body of rock| |
| |across which some movement has occurred | |
+----------------------------+-----------------------------------------+-------+
|felsite |silica rich igneous rock, aka felsic| |
| |volcanic | |
+----------------------------+-----------------------------------------+-------+
|greenstone belt |belts of metamorphosed sedimentary and| |
| |igneous rocks of Archaean age | |
+----------------------------+-----------------------------------------+-------+
|hematite |An oxide of Iron, Fe2O3 | |
+----------------------------+-----------------------------------------+-------+
|igneous rock |originally molten can be volcanic or| |
| |intrusive | |
+----------------------------+-----------------------------------------+-------+
|JORC |Joint Ore Reserves Committee of the| |
| |Australasian Institute of Mining and| |
| |Metallurgy | |
+----------------------------+-----------------------------------------+-------+
|laterite |highly weathered rock usually conforms to| |
| |a consistent weathering pattern from| |
| |surface and often redistributes gold,| |
| |nickel or aluminium to ore grade| |
| |concentrations above the primary source| |
| |at depth. | |
+----------------------------+-----------------------------------------+-------+
|mineralisation |metallic minerals such as gold, base | |
| |metals, pyrite and arsenopyrite | |
| |incorporated in rocks | |
+----------------------------+-----------------------------------------+-------+
|mineralised zones |hydrothermally altered structural| |
| |features containing potentially valuable| |
| |minerals | |
+----------------------------+-----------------------------------------+-------+
|orebody |economically viable portion of a| |
| |mineralised zone | |
+----------------------------+-----------------------------------------+-------+
|pyrite |iron sulphide mineral often associated| |
| |with gold and base metal mineralisation | |
+----------------------------+-----------------------------------------+-------+
|pyrrhotite |iron sulphide mineral | |
+----------------------------+-----------------------------------------+-------+
|quartz |silicon oxide mineral very common in| |
| |hydrothermal deposits  | |
+----------------------------+-----------------------------------------+-------+
|Resource |mineral Resource as defined by the JORC| |
| |Code 2004 | |
+----------------------------+-----------------------------------------+-------+
|reverse circulation drilling|rotary percussion drilling whereby the|RC |
| |sample is returned from the cutting head| |
| |inside the rod string to surface thereby| |
| |avoiding contamination from the walls of| |
| |the hole | |
+----------------------------+-----------------------------------------+-------+
|schist |metamorphic rock with well developed| |
| |foliation | |
+----------------------------+-----------------------------------------+-------+
|stockworks |zone of multiple quartz filled fractures | |
| |with individual veins often of random | |
| |orientation | |
+----------------------------+-----------------------------------------+-------+
|strike |the horizontal orientation of a planar | |
| |geological feature | |
+----------------------------+-----------------------------------------+-------+
|syenite |a coarse-grained intrusive igneous | |
| |rock of the same general composition | |
| |as granite but with quartz <5%, and | |
| |feldspar component predominantly | |
| |alkaline in character. | |
+----------------------------+-----------------------------------------+-------+
|talc |magnesium iron silicate mica of | |
| |metamorphic origin | |
+----------------------------+-----------------------------------------+-------+
|thrust |shallow dipping fault where the upper | |
| |body of rock overrides the lower portion | |
+----------------------------+-----------------------------------------+-------+
|UNITS | | |
+----------------------------+-----------------------------------------+-------+
|g |gramme | |
+----------------------------+-----------------------------------------+-------+
|g/t |grammes per metric tonne - metal | |
| |concentration | |
+----------------------------+-----------------------------------------+-------+
|km |kilometre | |
+----------------------------+-----------------------------------------+-------+
|m |metre | |
+----------------------------+-----------------------------------------+-------+
|Mt |million metric tonnes | |
+----------------------------+-----------------------------------------+-------+
|Moz |million ounces | |
+----------------------------+-----------------------------------------+-------+
|oz |fine troy ounce equaling 31.1048 grammes | |
| |- normal unit used in selling gold | |
+----------------------------+-----------------------------------------+-------+
|ppb |parts per billion | |
+----------------------------+-----------------------------------------+-------+
|ppm |parts per million, equivalent to g/t | |
+----------------------------+-----------------------------------------+-------+
|t |metric tonne | |
+----------------------------+-----------------------------------------+-------+
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: African Consolidated Resources Plc via Thomson Reuters ONE
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