London-listed Xtract Resources has entered into a joint venture (JV) agreement with Cooperlemon Consultancy to explore for copper on two large-scale licences in the northwest of Zambia.

The two exploration licences are located within the Western Foreland geological district that hosts the prolific Kamoa-Kakula deposit and the Central Fold, as well as the Thrust Belt, which all have acute competition for exploration licences.

The two licences in question cover a combined 107 000 ha and are believed to contain high-grade Kamoa-style mineralisation at depth and lower grade bulk tonnage closer to surface.

Chairperson Colin Bird states that there may also be Kolwezi-style mineralisation present, as well as cobalt mineralisation.

Xtract says there has been limited exploration work on the licences to date, and it will start with initial fieldwork in September to identify drill targets.

In terms of the JV agreement, Xtract will earn a 65% interest in the JV by funding exploration expenditure of no less than $2-million over an initial two-year period on the licences. Xtract plans to fund the expenditure from existing resources.

If the Phase 1 exploration results are successful and prove the continuity of mineralisation at grades that suggest the potential for future development of a mineral resource of at least 500 000 t of contained copper that can be recovered at an internal rate of return of at least 25%, with a payback period of less than 42 months, the parties will continue with a second two-year exploration period.

The Phase 2 exploration budget expenditure of $3-million will also be funded by Xtract, which will be the operator of the licences for the duration of the agreement.

Should Cooperlemon opt to sell the licences during Phase 1 of the JV, then Xtract will be deemed to have a 55% in the JV.

In the event that either or both of the licences advance to a point where they are commercially viable and suitable for development, then the licences will be moved to a corporate entity to be owned 75% by Xtract and 25% by Cooperlemon. This entity will be responsible for raising all capital for mine development and future operations.