Kakuyu Copper Project Zambia update

For immediate release

26 January 2023

Xtract Resources Plc

("Xtract" or the "Company")

Kakuyu Copper Project Zambia Update

The Board of Xtract Resources Plc is pleased to provide shareholders with an update on the Kakuyu copper joint venture project located approximately 53km north-west of the town of Mumbwa, Central Province of Zambia. 

Highlights

·    Exploration undertaken in and around the Kakuyu open pit has defined several copper targets offering potential for extension of the existing in-pit mineralisation and a significant increase in the projected life of mine

·    On the southern side of Kakuyu Hill an approximate combined 800m west and east striking extension of copper mineralisation has been postulated that requires validation through sampling and drilling.

·    On the northern side of Kakuyu Hill, a substantial copper in soil anomaly extending over a strike length east to west of approximately 1.4 kilometres has been defined. The target is coincident with a hydrothermal breccia of the same composition as that hosting mineralisation in the open pit

·    An assessment of waste dumps by the grade control team is under way to identify potential additional mineral resources presumed by previous operators to be low-grade or waste material. A programme of sampling is in progress and additional feedstock may be generated

·    A detailed assessment and inventory of ore currently stored on the ROM pad is in progress to develop a grade control and ore blending plan to ensure the delivery of consistent tonnage and grade output

·    Work is under way to push back the existing ramp access to the pit to expose in-pit extensions of higher-grade (targeting >2.0% Cu) ore providing additional feedstock whilst simultaneously improving pit access

·    A 250t bulk sample has been delivered to the Kabwe Refinery for drying, crushing and sampling ahead of negotiations for the future processing of ore production. Samples have also been delivered to an external processing consultant for metallurgical test work

·    The Company is now sourcing a drill rig to test the potential extensions to mineralisation associated with the existing open pit together with the substantial soil anomaly delineated along the northern boundary of Kakuyu Hill.

Colin Bird, Executive Chairman said: "I am very pleased with progress to date on the Kakuyu project. On acquisition, we were confident that a relatively small operation could be sustained for two years or possibly more. We have been very active on the ground and our conclusions now are that the initial prognosis could potentially extend to 4 or 5 years but, more importantly, there exists the potential opportunity to build a larger operation which could justify its own processing capability. In the short-term it is our intention to maximise cash flow from the operation to finance a larger exploration programme and we will keep shareholders informed of our progress and ultimate direction for the Kakuyu project."

Kakuyu Project

The Kakuyu Project is located approximately 53km north-west of the town of Mumbwa, Central Province of Zambia, in a region well-known for mining including the nearby mines and occurrences of Sable Antelope, True Blue, Crystal Jacket, Maurice F Gifford, Lou Lou, Silverking and Kamiyobo. The most recent discovery is the Iron Oxide Copper Gold ("IOCG") Kitumba project (BHP/Blackthorn Resources).

The Kakuyu Project is covered by two mineral licences, one small-scale mining licence 29805-HQ-SML issued to Kakuyu Mining Limited which is valid until 7 November 2031 covering an area of 201.78 hectares and a second small-scale mining licence currently under application by Kakuyu Mining Limited over an adjoining area of similar size.

The Kakuyu Project has been operated at various times in the past by both small-scale commercial and artisanal miners. There has been limited exploration to date of the Kakuyu Project which provides Xtract with an opportunity to make fresh discoveries in an under-explored but prospective region. The Kakuyu Project is centred around the Kakuyu Hill pit and a large hematitic lens (approximately 800 by 200 metres) found in a fault-controlled setting which is understood either to be a shear hosted Cu-Au deposit or an oxidised post orogenic IOCG deposit, or a combination thereof. The extension of the lens feature with depth is not currently known although the hematitic lens may extend to the west, along strike of the mapped iron unit. Field investigations showed similar features, structures and alteration in the western diggings, outside of the larger Kakuyu Hill pit. There is also a potential for mineralisation to the north of the hill as the area is highly faulted with a smaller wedge of older dolomites sitting within the younger meta-sediments which could form fluid traps. Copper occurs as both oxides and sulphides on fractures, in breccias and as stockworks.

The Kakuyu Hill pit has been worked historically (although there is no historic data) to the extent that benches have been put in place to open up the pit. There are also underground artisanal workings with tunnels and a collapsed shaft. Oval Mining has currently removed bulk samples of the potential higher-grade sulphide ores from the pit which have been hand-sorted and stockpiled on site, targeting grades of 3.5-4% Cu (although no assays are available on in situ grades at this time). A site has also been created south of the pit for the new waste rock dumps.

The deposit type and mineralisation mechanisms are not yet clear from initial field observations and Xtract plans an exploration programme to understand further the type of deposit and mineralisation potential at Kakuyu. This programme is likely to comprise initially a detailed ground IP and/or EM geophysics survey with follow up drilling on identified targets.

Joint Venture Agreement

Xtract has entered into a joint venture agreement with Oval Mining Limited ("Oval") relating to the exploitation of small-scale production licence 29805-HQ-SML (the "Licence"). Under the terms of the Agreement, Xtract and Oval have agreed that the net profit of the Kakuyu Project will accrue as to 60% to Xtract and 10% to Oval. Both Oval and the Licence Holder are Zambian-based entities. The balance of 30% will accrue to Kakuyu Mining Limited (the "Licence Holder").

A fuller summary of the terms of the joint venture agreement were set out in an RNS dated 15 December 2022.

Further information is available from the Company's   website which details the company's project portfolio as well as a copy of this announcement:  www.xtractresources.com

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.The person who arranged for the release of this announcement on behalf of the Company was Colin Bird, Director.

Enquiries:

Qualified Person:

Information in this announcement relating to the exploration works has been reviewed by Edward (Ed) Slowey, BSc, PGeo, a consultant to Xtract. 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 is a Qualified Person under the AIM rules. Mr Slowey has reviewed and approved the geological content of this announcement.

Qualified Person:

In accordance with AIM Note for Mining and Oil & Gas Companies, June 2009 ("Guidance Note"), Colin Bird, CC.ENG, FIMMM, South African and UK Certified Mine Manager and Director of Xtract Resources plc, with more than 40 years' experience mainly in hard rock mining, is the qualified person as defined in the Guidance Note of the London Stock Exchange, who has reviewed the technical information contained in this press release.

TECHNICAL GLOSSARY

The following is a summary of technical terms: