March 2009 Quarterly Report
30 Aprile 2009 - 2:55PM
UK Regulatory
TIDMZRL
RNS Number : 4996R
Zambezi Resources Ltd
30 April 2009
30 April 2009
Zambezi Resources Limited
(AIM: ZRL; ASX:ZRL)
March 2009 Quarterly Report
CORPORATE
Current Situation
Following the continued deterioration in the global financial markets the prime
aim of Zambezi Resources Ltd ("Zambezi" or "the Company") during the quarter has
been to secure a major financial backer for the Company. On 31 October 2008 the
Company's shares were suspended from trading on the ASX pending clarification
with regard to the Company's funding arrangements. This was followed by a
suspension on the AIM market four days later. On 28 November 2008 the Company
reached a standstill agreement with its major creditors which allowed Zambezi to
defer the payments of debts until the end of March 2009. This deadline was later
extended to the 30 April 2009. A satisfactory agreement with Creditors is
expected to be concluded and will be announced to the market at that time.
Outlook
The Company is continuing discussions with various parties with a view to
refinancing the Company. This includes discussions being led by the Company
itself and also discussions through intermediaries acting on the Company's
behalf. Post securing such financing, the Company will be looking to rationalise
its asset portfolio and reprioritise its projects,
The Company has reduced its overheads and operating cost by carrying out a
substantial reduction in its exploration office in Zambia, substantially
reducing its Perth administrative office, retrenched all but three staff in
Zambia and is renegotiating salaries and terms of employment with its remaining
key staff. The Company has also wound up its exploration services agreement with
Glencore International AG ("Glencore") in the Democratic Republic of Congo.
The Company notes that the improved market conditions as a result of the
improved copper price and financial market conditions.
Astron Placement
On 28 January 2009, the Company secured an agreement with Astron Limited
("Astron") for a three staged recapitalisation plan which envisaged an initial
investment of AUD$580,000 and following shareholder approval, an additional
investment of AUD$3.42 million. In addition the Company was to issue an
unsecured note for USD$6 million to Astron Limited subject to various conditions
including shareholder approvals outlined in the announcement dated 28 January
2009.
On 9 March 2009, the Company received shareholder approval for the Astron
transaction which was due to settle on 11 March 2009. On 11 March, the Company
received a notice from Astron purporting to termination the placement agreement.
This notice was refuted by Zambezi and Zambezi provided a notice to Astron that
they were willing and able to complete the transaction. As announced on 16
March 2009, the Company terminated the agreement after receiving no formal
response from Astron. The Company has reserved all rights with respect to this
transaction.
OPERATIONS
During the Quarter ended 31 March 2009, no field work was carried out on the
Company's projects in Zambia. Focus for the quarter centred on compliance with
the Company's license holdings in Zambia to meet full regulatory compliance with
the new 2008 Zambian Mines Act ("the Act").
All tenure renewals, relinquishments, new applications and transfers have now
been addressed by the Zambian Department of Mining and Mineral Development.
There remain three licences which have been approved by the cadastral committee
but the final formal letter of approval has yet to be received from the
Department of Mines. In accordance with the new mining laws, Zambezi and its
joint venture partners have carried out substantial reductions in their tenement
position while retaining core project areas. To comply with the Act, Zambezi has
retained an area of influence over an area of 9,637km2 which contain all the
main project areas while retaining direct 100% interest over 4,880km2.
Results are still pending from drilling completed on the Kangaluwi Copper
Project and the Mulofwe Project with 17,800 analytical results still to be
assayed. Of these samples, 9,892 are drill samples from the Kangaluwi program,
of which approximately 3,531 have been classified has high priority samples as a
result of their interpreted mineralisation.
New Tenure Position
To comply with the Act, Zambezi has reduced the size of individual licenses to
1000km2 or less and the overall tenure area to 5000km2 or less . To achieve
this, retention licenses have been applied for and granted over core project
areas. Where the area of the old license has exceeded 1000km2 new licences have
been applied for and granted additional to the area retained.
To further comply with the Act, licences areas previously held by Zambezi have
been relinquished then applied for by Cheowa Resources (Zambezi 49%; Glencore
51%), Chalimbana Resources (Zambezi 49%; Lithic Metals and Energy Limited 51%)
and Mpande Limestone Ltd. (Zambezi 45%).
The area now directly under Mwembeshi Resources (Zambezi 100%) is 4,880km2 The
area under the incorporated Glencore Joint venture covers 1619 km2 and the area
under the Lithic Joint venture covers 2756km2. The effective area under
influence is now 9255km2 post the reduction of tenure and has thus reduced by
43% over the past year. Zambezi and its joint venture partners have selected
the most prospective areas to retain. The tenement reduction program is in
accordance with the Act policy requiring a 50% reduction every two years.
Zambezi was one of the few exploration companies in Zambia to meet the March
2009 deadline to comply with the Act with respect to tenement tenure.
Once all the new tenements have been formally approved, the company will issue a
detailed statement disclosing the new tenement position.
COPPER PROJECTS
At the Cheowa Copper-Gold Project, Glencore met its expenditure commitment of
US$16 million in Q4 2008 to earn an initial 51% interest in the project. A
Shareholders Agreement to convert the joint venture into an Incorporated Joint
Venture was completed between Zambezi and Glencore in December 2008. Glencore
now own 51% and Zambezi 49% of Chalimbana Resources Ltd, a Bermudan registered
company that owns the assets of the two former joint ventures for the Cheowa
Copperbelt/Chalimbana and Cheowa projects.
A significant number of drillhole assays are still pending for the Chisawa and
Kangaluwi Prospects. These samples will be assayed as a priority pending funding
or JV partner. The results of these assays will be used to calculate a 2004 JORC
compliant resource estimate for the Chisawa and Kangaluwi Prospects.
URANIUM PROJECTS
Lithic Metals and Energy Uranium Joint venture. No field work carried out for
the quarter, it being the wet season. Subsequent to the quarter end, Lithic
Metals and Energy ("Lithic") announced results of initial sampling at the Katoba
and Mukwisi prospects in Zambia on 21 April 2009 and this announcement is
available on the Lithic website www.lithicme.com.
Uranium Mineral Rights joint venture with Rio Tinto. As of 9 March 2009, Rio
Tinto Mining and Exploration Ltd gave notice of their wish to withdraw from and
terminate the Mulofwe joint venture. The joint venture commenced on 4 September
2007 with Rio Tinto spending US $350,000 toward the joint venture commitment on
exploration up until notification of withdrawal. The work carried out by Rio
Tinto resulted in several drill ready targets. Follow up and drilling of these
targets is planned by Zambezi pending further funding.
The Company welcomes enquiries in relation to its projects.
For and on behalf of the Board
Julian Ford
Managing Director
30 April 2009
A full version of this announcement including maps and figures is available on
the Company's website www.zambeziresources.com
Competent Person Statement
The information in this report that relates to Exploration Results is based on
information compiled by General Manager Exploration Jay Klopper BSc (Hons). Mr
Klopper is a full-time employee of Zambezi Resources, and a Member of the
Australian Institute of Geoscientists. Mr Klopper is a Competent Person as
defined in the December 2004 Edition of the "Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves" (the JORC Code) and
consents to the inclusion in the report of the matters based on the information
in the form and context in which it appears.
For more information contact:
+------------------------------+----------------------------+
| Julian Ford, Managing | Simon Edwards / Adam Lloyd |
| Director | Evolution Securities Ltd |
| Zambezi Resources | + 44 20 7071 4300 |
| (Australia) | |
| +61 (08) 9216 9000 | |
| +61 (0) 418 949 580 | |
+------------------------------+----------------------------+
| | |
+------------------------------+----------------------------+
| Fiona Owen | |
| Grant Thornton UK LLP | |
| +44 20 7383 5100 | |
+------------------------------+----------------------------+
ADDITIONAL INFORMATION
Zambezi is listed on London's AIM market and the Australian Securities Exchange
(ASX & AIM Ticker: ZRL) and currently has two main projects, Cheowa and
Kangaluwi. The Company is focused on discovering and developing large
Copper-Gold projects in southern Zambia. The Cheowa project is a joint venture
with Glencore International AG, who have earned a 51% interest in the project.
The Company believes that the Kangaluwi project has the potential to be a world
class open pit copper deposit. To date the Company has spent over US$ 10 million
on the project and drilled over 50,000 metres, testing 8km's of the 28km's of
strike length. The Company also has a Uranium Joint Venture on approximately 50%
of its tenement area with Lithic Metals and Energy.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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