Drilling update on Eureka & Kajevu, Zambia

For immediate release

23 January 2020

Xtract Resources Plc

("Xtract" or the "Company")

Drilling Update on Eureka and Kajevu Copper Prospects, Zambia

The Board of Xtract Resources Plc ("Xtract" or the "Company") is pleased to provide an update on drilling progress on the its Eureka project on the copper-gold small scale mining licence number 22134-HQ-SML ("Eureka Licence") located in the Central part of The Republic of Zambia ("Eureka Project") and copper / gold  small scale mining license number 8370-HQ-SML ("Licence") located at Kajevu, Kasempa, North Western Province in The Republic of Zambia ("Matrix Project").

Highlights

·    First three holes at Eureka Project cut shallow copper-bearing intervals over downhole widths ranging from 52m to 77m with the fourth hole in mineralisation

·    Handheld XRF spectrometer indicated potential elevated copper and cobalt values

·    Historic and current drilling confirm mineral zone over 240m of strike and to 95m depth, open in several directions and appears to widen at depth

·    Initial core logging suggests possible Copperbelt-style deposit setting

·    Drilling continuing at Eureka- holes being logged and sampled in preparation for external assay

·    Drilling on Matrix Project indicated a 7m mineralised interval in hole MX-05A

Colin Bird, Executive Chairman said: "We are particularly pleased with the drilling results at Eureka which are both intriguing and exciting in that mineralised intersections are thick and the occurrence is potentially open on strike and to depth. The results are intriguing on the basis that the occurrence is characteristic of typical copper belt mineralisation whilst the deposit is some considerable distance from the copper belt. It is exciting because the ore body is near vertical and the widths are in excess of our original expectations. We eagerly await the assay results to confirm copper values and the presence of cobalt and the grade, if present. Our plan now is to gather in all the results and plan the next stage of exploration activities to test these encouraging initial results."

Summary of results to date

Drilling has been carried out at both project areas as planned and is continuing at the Eureka property. It should be noted that until the assays of the current drill core are returned following independent analysis by SGS in Zambia, the grade and extent of mineralisation is not yet determined.

Due to issues with penetration of harder rock units by the reverse circulation ('RC') rig supplied by the contractor, the decision was made to proceed using diamond core ('DC') drilling at both projects. 

At the Eureka Project, drilling has focussed on testing strike and depth continuity of shallow mineralisation located by limited historic exploration drilling and development of a small open pit. So far, three angled holes have been completed by Xtract to a maximum depth of 140m, with a fourth hole in progress. Hole EX-01 was drilled beneath the old open pit at its southeast end, with EX-02 being sited 20m behind EX-01 to test for continuity of mineralisation to depth. Hole EX-03 was sited 50m to the southeast, beyond the limit of previous drilling and pitting, to test the strike continuation of the mineralised zone. All three holes completed have intersected copper-bearing intervals as indicated by core logging and use of a handheld XRF spectrometer. Upper parts of each hole are strongly oxidised, with some cavities developed in dolomite host rock which contains sections of irregular, remobilised copper oxide and supergene copper sulphide mineralisation. Beneath the oxide zone, copper occurs in the form of chalcopyrite and cupriferous pyrite, both as disseminated/banded primary mineralisation and irregular, coarser void infills. Downhole mineralised intervals range from 52 to 77m in width - initial interpretation suggests that the zone is near-vertical in dip which would equate to true widths in the range of 35- to 50m, apparently becoming wider with depth. The maximum vertical depth tested to date by the current drilling programme is 95m. Total confirmed strike length of mineralisation at Eureka based on historic drilling and the current drilling programme is about 240m and the zone remains open.

Initial core logging suggests that the geological setting, as well as the disseminated and stratabound nature of some of the mineralisation may indicate affinity with the setting of the Copperbelt deposits rather than IOGC-style mineralisation. This would enhance the potential of the Eureka project.

Core logging and sampling is currently under way and assay results will be reported as they are received from the laboratory. Historic drill assaying confirmed the presence of accessory gold, and this will be checked in the current holes, as well as cobalt and other base metals.

Drilling is continuing at site, with five holes planned in the first programme phase. Further drilling will be considered subject to operational considerations and weather conditions, as the seasonal rains present logistical challenges.

At the Matrix Project (Kajevu), six short angled holes, totalling 316.7 metres were drilled to test and define the extent of steeply dipping IOCG-style copper-gold mineralisation previously mined in a small open pit. Generally, drilling beneath and along strike to the west of the exposed mineralisation located the target quartz vein shear structure but mineralisation was weak or absent. However, hole KX-05A, drilled immediately east of the open pit intersected a zone with mineralisation similar in style to that seen at surface in the pit. Multiple zones of quartz hematite breccia were encountered from 33.0-45.8m downhole depth, with the main zone occurring over a 7.0m width from 33.0-40.0m. Supergene copper mineralisation in the form of chalcocite, chrysocolla and malachite occurs along fractures, and as veins, disseminations and void filling. Further minor copper oxides are seen at about 41m depth.

Initial review of results indicates that the target zone may be limited in scope at Kajevu, however assay results for copper, gold and other metals are awaited and the project will be further reviewed when these are received.

Project background

At Eureka, as previously announced limited historical drilling within an extensive copper soil anomaly intersected up to 25.7m @ 3.30% Cu and 0.25g/t Au, including 9.7m @ 5.9% Cu and 0.26g/t Au. A shallow open pit was developed by a local operator within this resource in 2008, when about 1,000 tonnes of ore at 3% Cu was reportedly recovered. Mineralisation intersected by historic drill holes and partially mined remains open in several directions. In particular, mineralisation is open to the southeast of the pit as well to depth. Additional drill testing of this zone at more optimal drilling angles, is a priority for the current drilling programme.

A second sub-parallel copper anomaly in soils about 600-700m long occurs at Eureka West, 1km to the southwest of the main Eureka pit. A small pit at this locality was operated by artisanal miners - composite grab sample taken by the Company from hand-sorted boulder piles at the site returned 9.81% Cu, 1.94g/t Au, 13.77g/t Ag. This is a further priority drill target for the Company.

At the Matrix Project (Kajevu) a small open pit trial mine approximately 150 metres long and 15 metres deep was previously developed over a steeply dipping, hydrothermally altered copper-gold bearing quartz vein zone. Strong visible copper mineralisation in the form of malachite and chalcocite is exposed at the western end of the pit over a 3-5m width. As previously announced, selective composite grab samples taken by the Company returned values ranging 3.99-7.28% Cu, 1.0-3.42g/t Au. Historic records report trenching results of 2.86% Cu over a width of 36m, indicating potential for wider copper intervals within the target zone.

Bulk sample material from the open pit was stockpiled at surface for possible future ore processing - this includes considerable stacks of partially sorted high-grade copper mineralisation.

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 No. 596/2014 on market abuse. 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:

ENDS