Background on Pangeni Project
The Pangeni Copper Project (the “Project” or the “Property”) is located along on the western extension of the Central African Copperbelt in Zambia (the “Copperbelt”). This prolific Copperbelt hosts numerous world-class copper mines such as First Quantum Mineral’s Kansanshi and Sentinel mines, as well as major development projects. Historically limited exploration has been carried out on the western side of the Copperbelt due to an extensive layer of Kalahari sand which covers much of the bedrock geology in the region. The Pangeni property is particularly favoured with a thin layer of sand cover (averaging only 25 metres of thickness) and this feature significantly reduces exploration costs in areas where the sand can be well over 100 metres thick.
In addition to several producing mines, the Copperbelt is also active with major mining companies such as Anglo American, exploring close to and around our property. With relatively modest exploration budgets, BeMetals is able to search for tier one sediment-hosted copper deposits in one of the largest copper producing districts in the world.
In April 2018, a 43-101 compliant Independent Technical Report was completed by African Mining Consultants (“AMC”) for BeMetals for the Pangeni Copper Project. Click here to view the Technical Report.
From October 2020, the Company conducted another of 3,500 metres of aircore drilling and 750 metres of core drilling to extend the copper mineralization discovered at two of the high-priority targets identified during the 2019 exploration program, and potentially vector into higher grade areas. Further encouraging analytical drilling results including Hole D3-C1, which intersected 3.98 metres grading 0.39% Copper from 71.45 metres, were received in early 2021. This hole was meaningful as it occurred some 850 metres northeast of Hole D2-C1 that intersected 5.50 metres Copper and Hole D2-C2 that intersected 5.56 metres grading 0.47% Copper during the 2019 field season. Additional drilling is warranted to further expand this copper mineralization at the D Prospect as well as test other priority targets.
In March 2021, Japan Organization for Metals and Energy Security (“JOGMEC”) became a new joint venture partners with BeMetals to advance the Pangeni Project. To date, JOGMEC has contributed approximately US$1.9 million for money-in-the-ground exploration at the Pangeni Copper Project and additional exploration expenses are shared on a pro-rata basis. This investment from JOGMEC is helping to accelerate exploration at the property.
During 2021 the Company completed 1,382 metres of core drilling in six core holes, 4,353 metres of shallow aircore, and a helicopter‐borne electromagnetic (“EM”) survey over the Pangeni Copper Project. The interpretation of the EM survey data was integrated with previous geophysical and geological interpretations of the Pangeni Copper Project. The EM data improved exploration target selection and mapping of the Kalahari sand cover units. Four priority targets were identified from the aircore program for testing with core drilling in 2021. These were related to both the D‐Prospect and two new standalone exploration targets, namely the Q and F targets. The results from this program were released the Company’s January 25, 2022 news release.
BeMetals launched its 2022 exploration campaign comprised of approximately 4,000 metres of aircore drilling and 1,400 metres of core drilling in late June. Results from this program will be released in the coming months.
Project Location Map
Terms of Pangeni Option Agreement
In February 2018, further to a November 2017 letter agreement, the Company confirmed the agreement (the “Pangeni Agreement”) with Copper Cross Zambia Limited (the “Pangeni Vendor”) for the right to acquire up to a 72% interest in the Pangeni Copper Project. In July 2018, the Company received final approval from the TSX-V of the option agreement and related transactions. In January 2020, certain amendments were made to the Pangeni Agreement (the “January 2020 amendments”).
Under the terms of the Pangeni Agreement, and including the January 2020 amendments, to complete the acquisition of the initial 67.5% interest in the Pangeni Copper Project, the Company must:
before the second anniversary in February 2020:
- make cash payments of US$250,000 ($327,235) (completed); and
- issue a total of 780,500 common shares (completed);
and before December 31, 2020:
- expend US$2.5 million in exploration work or cash advances for future exploration work (US$2,500,000 completed) ($3,313,750);
and then, before the fifth anniversary in February 2023:
- complete a preliminary economic assessment; and
- make a further cash payment of US$450,000 (a portion of which may be paid in common shares at the option of the Company); and
- make a payment of US$700,000 as an advanced royalty reduction payment.
Following acquisition of the initial 67.5% interest the Company can acquire an additional 4.5% interest by completing a feasibility study and making a further cash payment of US $750,000 (a portion of which may be paid in common shares of BeMetals at the option of the Company).
At the commencement of the mine development phase, and following a feasibility study, a one-off milestone payment is payable, based upon total proven and probable mineral reserves, as follows: US$2 million if less than 500 kilotonnes (“kt”) contained copper, US$3 million if the contained copper is between 500 kt and 1,000kt, and US$6 million if greater than 1,000kt contained copper. Upon commencement of production, Pangeni Mineral Resources Limited is entitled to a 3% Net Smelter Royalty (which may be reduced to 2.5% following the US$700,000 royalty reduction payment above and further reduced to 1% following an additional royalty reduction payment by the Company, determined by an internationally recognised valuator, which is not to exceed US$3.3 million).
Terms of JOGMEC Agreement
Under the terms of the JOGMEC Agreement, by March 31, 2021 JOGMEC will fund US$1,000,000 for exploration expenditures by way of payment to BeMetals for exploration activities completed in the 2020 field program. This payment was received in March 2021. During 2021, JOGMEC will also fund an additional US$ 500,000 in exploration expenditures, after which JOGMEC will be deemed to have earned a 27.8% interest in BeMetals’ option to acquire up to a 72% interest in the Pangeni Project. Upon earning its interest in the BeMetals option, for the remainder of the agreed future exploration programs, JOGMEC will fund exploration expenditures pro-rata in accordance with its 27.8% interest. In total JOGMEC will therefore solely fund US$ 1,500,000 of exploration expenditures, and thereafter fund exploration expenditures pro-rata in accordance with its proportionate interest in the BeMetals option for the property. The above investments will provide JOGMEC with rights to an approximately 20% stake in the Pangeni Project assuming the full exercise of all applicable underlying parties and optionees and BeMetals will retain rights to approximately 52%. BeMetals retains overall management control through the project’s technical committee and its majority option position in the Pangeni Project.
The Property is located in the boundaries of large-scale exploration licence in the Manyinga District of North-Western Province, Republic of Zambia. The Project is approximately 255km west of the established mining centre of Solwezi. The town of Solwezi is adjacent to First Quantum Mineral’s Kansanshi copper mine and smelter. The Property is accessible from Solwezi by the T5 or M8 tarred highways and secondary paved and gravel roads.
Geology and Mineralisation
The Property lies within the western extension of the Lufilian Arc, within the Domes Region, comprising Paleoproterozoic basement sequences overlain by Neoproterozoic Katangan meta-sediments that host the bulk of the copper-cobalt deposits within the Central African Copperbelt. The Property is broadly overlain by Kalahari Group sequences which are interpreted to vary in thickness from 2 to 40m over approximately 80% of the Property.
The Property is geologically prospective for the deposit types listed below:
- Basement-hosted Cu (±Co ±U) (Analogue: the Lumwana Deposit operated by Barrick Gold Corporation); and
- Sediment-hosted stratiform Cu (±Co) (Analogues: Zambian Copperbelt deposits e.g. the Nchanga and Konkola Deposits, operated by Konkola Copper Mines, a subsidiary of Vedanta Resources Plc., the Nkana and Mufulira Deposits operated by Mopani Copper Mines Ltd. and the Domes Region deposits e.g. the Sentinel and Kansanshi Deposits, operated by First Quantum Minerals Ltd.).
The mineralisation, identified within the Property to date, is characteristic of basement-hosted copper mineralisation in Zambia. Typically, it occurs in strongly foliated, locally mylonitic, quartz-biotite-muscovite-scapolite (±kyanite) schists.
Hypogene copper mineralisation predominantly occurs as chalcopyrite with lesser bornite, with chalcopyrite and bornite also commonly occurring as stringers, blebs, and to a lesser extent as salvages within quartz ± carbonate veins. Chalcopyrite and bornite mineralisation is frequently parallel to foliation and possibly stretched due to shearing.