ZRL Zambezi Res

 

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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