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Quarterly Report December 2012.docx| ZRL 1
ZAMBEZI RESOURCES LIMITED ARBN: 124 462 826 BERMUDA ZAMBIA AUSTRALIA CANON’S COURT PLOT 5697 LEVEL 1, 17 ORD STREET 22 VICTORIA STREET BEU CRESCENT WEST PERTH, WESTERN AUSTRALIA HAMILTON HM12 KALUNDU AUSTRALIA 6005 LUSAKA TEL: +61 8 6555 1879 TEL: +260 211 292101 FAX: +61 8 9398 4104 EMAIL: [email protected] PO BOX 1796, WEST PERTH WWW.ZAMBEZIRESOURCES.COM WESTERN AUSTRALIA, 6872 ASX Announcement
Tuesday, 29 January 2013
December 2012 Quarterly Operations Report & Appendix 5B
1.0 Summary of December Quarter 2012 Activities
Kangaluwi Copper Project awaits green light from Zambian Government to proceed
following the submission of a detailed Environmental Management Strategy
(“EMS”).
Drilling results from the Mpande Limestone Project confirms a large limestone
deposit of a high quality and suitable for cement production.
The Company entered into a funding agreement with New York-based Bergen Global
Opportunity Fund, LP for up to $5,850,000 over two years.
All resolutions before the Company’s Annual General Meeting held on 20 December
2012 were passed.
FIGURE 1: PROJECT LOCATIONS
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2.0 Kangaluwi Copper Project
Under the Environmental Management Act 2011, which was enacted in Zambia after
MRL was granted a Large Scale Mining Licence for its Kangaluwi Copper Project
(“Project”) located in the Lower Zambezi National Park, all new mining projects
require an EIS to be lodged with and approved by the Zambia Environmental
Management Agency (“ZEMA”) as part of the approval process.
On 7 September 2012 MRL was informed by ZEMA that it had not approved the EIS.
MRL lodged an appeal on 19 September 2012 to seek a review of the ZEMA decision
as provided for in the Environmental Management Act 2011.
The appeal was considered by the Minister of Land, Natural Resources and
Environmental Protection on 10 October 2012 during the first appeal hearing
attended by all stakeholders.
The meeting resulted in the Minister requesting a more detailed Environmental
Management Plan.
An Environmental Management Study (“EMS”) including detailed Environmental
Management Plans and Procedures was submitted to the Minister on 6 November
2012.
The Company is awaiting the response from the Minister of Land, Natural Resources
and Environmental Protection.
3.0 Mpande Limestone Project
3.1 Introduction
Mpande Limestone Limited (“MLL”), 100% controlled by ZRL is a Zambian registered
company that was formed in June 2008.
MLL proposes to construct and operate a cement and quick/hydrated lime facility
within its 143.5 km2 Licence Area 13173-HQ-LPL, in Kafue District, Lusaka Province of
Zambia.
The project is located on a green field site (FIGURE 2) and is situated in the south-east
direction, 80 km by road from Lusaka city centre.
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FIGURE 2: LOCATION MAP
3.2 Project Objectives
The main purpose of the project is to produce lime and cement of various
specifications for supply to meet national and regional demand for the commodity
by the construction industry.
Specific objectives include:
Mining, transportation and preparation of limestone and shale for use in the
cement manufacturing process.
Procurement and preparation of sand, coal and gypsum for use in the
cement manufacturing process.
Cement manufacturing and bagging.
Supply of cement to customers in the construction industry.
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The projected mine life for the facility is over 50 years. The proposed project
implementation will be subject to all relevant approvals and appropriate feasibility
studies and associated project funding.
3.3 Project Exploration
3.3.1 Geology
Lusaka and its surrounding environs are underlain by a Basement Complex
composed of granitic gneiss, pegmatite, amphibolite and lesser metadolerite. This is
variably overlain by rocks of the Katangan Super Group together with Chunga, Cheta
and the Lusaka Dolomite Formations.
The Chunga Formation is composed largely of psammitic and pelitic schists and
lesser limestone, with the overlying Cheta formation comprising quartzite and
schists. Two upper carbonate rich units, including the Mampompo Limestones and
Lusaka Dolomite.
The target Mampompo unit is a banded, medium or coarse grained limestone with
variably intercalated schist, quartzite and amphibolite.
Its mineralogy is dominated by calcite, scapolite, muscovite, biotite and lesser
microcline.
3.3.2 Lithogeochemistry Sampling Program
The Company conducted rock chip sampling survey over the Mampompo
Limestones, during which 102 samples were collected for geochemical
analysis at a SGS Laboratory in South Africa.
3.3.3 Drilling
A total of 29 RC holes were drilled over a 500 m x 500 m grid which
previously underwent rock chip sampling (FIGURE 3). All were drilled
vertically to an average depth of 40 metres. From the 18 holes which
returned limestone intersections, 451 samples were dispatched to SGS for
analysis. Three varieties of dolomitic limestone were observed,
distinguishable largely by their colour/alteration.
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FIGURE 3: RC DRILL HOLES
3.3.4 Assay Results
Table 1: Mpande CaO and MgO Intercepts
Hole_ID Northing Easting RL EOH
Depth Inclination mFrom mTo mWidth Intercept
MPLRC0001 8266495 660285 1171 50 90 18 48 30 30.0m @ 51.8% CaO and 0.97% MgO
MPLRC0003 8265494 660131 1184 45 90 18 42 24 24.0m @ 50.2% CaO and 1.82% MgO
MPLRC0006 8266982 660045 1163 40 90 6 40 34 34.0m @ 48.9% CaO and 0.94% MgO
MPLRC0010 8267982 659967 1184 40 90 0 26 26 26.0m @ 50.0% CaO and 1.39% MgO
28 40 12 12.0m @ 50.9% CaO and 1.13% MgO
MPLRC0011 8268460 659889 1194 40 90 8 40 32 32.0m @ 50.8% CaO and 1.21% MgO
MPLRC0013 8269102 659628 1200 40 90 10 40 30 30.0m @ 50.9 % CaO and 1.78 % MgO
MPLRC0014 8269492 659455 1198 40 90 4 6 2 2.0m @ 49.1% CaO and 0.54% MgO
MPLRC0018 8266463 659468 1184 40 90 20 28 8 8.0m @ 47.9% CaO and 0.85% MgO
MPLRC0021 8268313 659550 1180 40 90 4 32 28 28.0m @ 51.7% CaO and 0.78% MgO
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With the majority of assay results contained over 50% CaO and less than 2% MgO,
this limestone was considered of good quality feedstock for cement and/or
quicklime production.
3.4 ML Application
During the quarter the Company engaged MVC Consulting Engineers to
prepare the Environmental Impact Study (EIS) on part of the Mining Licence
Application process.
The Company lodged the EIS with ZEMA on the 17th January 2013.
Following the approval of the terms of reference by ZEMA the Company will
apply for the Mining Licence.
3.5 Corporate
Limestone Ventures Pty Ltd, under the terms of the Joint Venture Agreement had
spent $400,000 on exploration and other works on the Mpande Limestone Licence
to assist in funding the conversion of the tenement to a Mining Licence. Under the
terms of this arrangement, and the funding spent, Limestone Ventures Pty Ltd now
has a 50% participating interest in the Joint Venture.
4.0 Corporate
4.1 Bergen Funding Facility
The Company entered into a funding agreement with Bergen Global Opportunity
Fund, LP (“Bergen”) on 18 October 2012 that will provide up to A$5,850,000 over
two years towards progressing the 100% owned Project to feasibility study stage and
to provide funds for general working capital and servicing of Zambezi’s existing debt.
The Facility is in the form of a Share Purchase Agreement with Bergen in respect of
the issue of up to A$5,850,000 worth of fully paid ordinary shares (“Shares”) over a
24-month period, from the date of the Agreement.
The Facility is to be made available to the Company in monthly tranches of
A$50,000, which can be increased to A$250,000 by mutual agreement.
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Key aspects of, and rationale for, the Bergen Funding Agreement:-
Validation of the business model by a US Institutional Investor.
Certainty of access to funding.
Minimises dilution.
Maximises flexibility.
4.2 AGM Results
At the Annual General Meeting held on 20 December 2012, all the resolutions
before the meeting were passed in favour of.
5.0 Competent Persons Statement
The information in this announcement that relates to Exploration Results is based on information
compiled by Robert McPherson, Country Manager – Geology, Zambia. Robert McPherson is employed
as a Geologist for Zambezi Resources and is also a member of the Australasian Institute of Mining and
Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves”. Robert McPherson consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.
Zambezi Resources Limited Frank Vanspeybroeck CEO Tel: +61 8 6555 1879
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Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 1
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10
Name of entity
ZAMBEZI RESOURCES LIMITED
ARBN Quarter ended (“current quarter”)
124 462 826 31 DECEMBER 2012
Consolidated statement of cash flows
Cash flows related to operating activities
Current quarter $A’000
Year to date
(6 months)
$A’000
1.1 Receipts from product sales and related debtors
- -
1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration
(290)
(814)
(1,944)
(2,510)
1.3 Dividends received
1.4 Interest and other items of a similar nature received
2 32
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (VAT & GST Refunds) 51 184
Net Operating Cash Flows
(1,051)
(4,238)
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets
1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets
1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material)
Net investing cash flows
-
-
1.13 Total operating and investing cash flows (carried forward)
(1,051)
(4,238)
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Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. Appendix 5B Page 2 17/12/2010
1.13 Total operating and investing cash flows
(brought forward)
(1,051)
(4,238)
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. 224 1,340
1.15 Proceeds from sale of forfeited shares - -
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - (249)
1.18 Dividends paid - -
1.19 Other (Costs in respect of Rights Issue and Placement)
- -
Net financing cash flows
224
1,091
Net increase (decrease) in cash held
(827)
(3,147)
1.20 Cash at beginning of quarter/year to date 1,486 3,827
1.21 Exchange rate adjustments to item 1.20 (4) (25)
1.22 Cash at end of quarter
655
655
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities
Current quarter $A'000
1.23
Aggregate amount of payments to the parties included in item 1.2
32
1.24
Aggregate amount of loans to the parties included in item 1.10
-
1.25
Explanation necessary for an understanding of the transactions
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
2.2 Details of outlays made by other entities to establish or increase their share in projects in
which the reporting entity has an interest
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Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 3
Financing facilities available Add notes as necessary for an understanding of the position.
Amount available $A’000
Amount used $A’000
3.1 Loan facilities
6,500 5,000
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
$A’000
4.1 Exploration and evaluation
100
4.2 Development
-
4.3 Production
-
4.4 Administration
350
Total
450
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Current quarter $A’000
Previous quarter $A’000
5.1 Cash on hand and at bank 5 65
5.2 Deposits at call 650 1,421
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter (item 1.22) 655 1,486
Changes in interests in mining tenements Tenement
reference Nature of interest (note (2))
Interest at beginning of quarter
Interest at end of quarter
6.1 Interests in mining tenements relinquished, reduced or lapsed
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Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. Appendix 5B Page 4 17/12/2010
6.2 Interests in mining tenements acquired or increased
Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number Number quoted Issue price per security (see note 3) (cents)
Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description)
7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions
7.3 +Ordinary securities
2,071,392,216
1,678,063,313
7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs
393,328,903
393,328,903
-
-
7.5 +Convertible debt securities (description)
7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
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Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. 17/12/2010 Appendix 5B Page 5
7.7 Options (description and conversion factor)
5,000,000
30,000,000
10,000,000
10,000,000
2,500,000
2,000,000
2,000,000
2,000,000
2,500,000
30,000,000
Exercise price
AUD$0.02
AUD$0.02
AUD$0.025
AUD$0.03
AUD$0.04
AUD$0.03
AUD$0.04
AUD$0.05
AUD$0.01
AUD$0.0044
Expiry date
5 May 2013
31 May 2013
30 September 2013
30 September 2013
1 June 2013
11 January 2013
11 January 2014
11 January 2014
30 June 2014
17 October 2015
7.8 Issued during quarter
30,000,000 - AUD$0.0044 17 October 2015
7.9 Exercised during quarter
- - - -
7.10 Expired during quarter 99,500,000 -
AUD$0.01
30 November 2012
7.11 Debentures (totals only)
- -
7.12 Unsecured notes (totals only)
- -
Compliance statement 1 This statement has been prepared under accounting policies which comply with
accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement does /does not* (delete one) give a true and fair view of the
matters disclosed.
Sign here: Chief Financial Officer Date: 29 January 2013
Print name: Pierre Malherbe
Notes 1 The quarterly report provides a basis for informing the market how the entity’s
activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
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Appendix 5B Mining exploration entity quarterly report
+ See chapter 19 for defined terms. Appendix 5B Page 6 17/12/2010
2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not
required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of
Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International
Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==
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