28 April 2023

African Pioneer Plc

("African Pioneer" or the "Company")

Final Results for period to 31 December 2022

 

African Pioneer plc ("APP" or the "Company"), the exploration and resource development company with projects located in Namibia, Botswana and Zambia, reports its full year results for the year ended 31 December 2022.

 

The Annual Report and Financial Statements for the year ended 31 December 2022 will shortly be available on the Company's website at https://africanpioneerplc.com/.  A copy of the Annual Report and Financial Statements will also be uploaded to the National Storage Mechanism where it will be available for viewing at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Please note that page references in the text below refer to the page numbers in the Annual Report and Financial Statements.

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).

For further information, please contact:

African Pioneer Plc  Colin Bird Executive Chairman	+44 (0) 20 7581 4477
Beaumont Cornish (Financial Adviser)  Roland Cornish	+44 (0) 20 7628 3396
Novum Securities Limited (Broker) Jon Belliss	+44 (0) 20 7399 9400

or visit  https://africanpioneerplc.com/

 

KEY HIGHLIGHTS

·      Consolidated  Net assets - £ 5,238,820 (2021 restated - £ 5,941,948)

·      Consolidated (Loss)/Profit - Loss - £ (670,871) (2021 - Profit restated - £273,471)

·      The Group reports its results and raises funds in Pounds Sterling (GBP).

·      Its primary assets are in Namibia, Botswana and Zambia

 

CHAIRMAN' STATEMENT

 

Dear Shareholder,

 

African Pioneer has continued to make good progress during the period under review. 

 

The Company has the benefit of major mining company shareholders and joint venture partners and/or option partners and is involved in two large exploration projects in Northwest Zambia and Botswana. 

 

In Zambia the company has granted an option with First Quantum Minerals Ltd ("First Quantum") over its North-western exploration projects and in Botswana the Company has granted Sandfire Resources Limited ("Sandfire") an option over a number of its Kalahari Copperbelt projects, whilst retaining some licences for its own exploration activities. 

 

In Namibia the Company has a significant exploration project, which during the year was granted a mining licence and plans are underway to bring this licence to account and commence mining activities. 

 

During the year we carried out a drilling exercise on the Ongombo licence and had some considerable success in identifying near surface material, which will allow the company to consider when mine planning, a 2-3 year mine life open pit, which will facilitate entry into the proposed underground mine.  During the period under review and post the reporting period, we have been re-evaluating the ore resource at Ongombo and anticipate reporting an updated resource in Q2 2023, which takes into consideration the contribution of the gold, which is in association with copper and the recently drilled out open pit resource. 

 

We are confident that our final resource model will lead to a meaningful mining situation with initial open pit and less complicated mining approach. 

 

In Zambia, during the option period, First Quantum have reported considerable success with their initial fieldwork and drilling programmes.  Their work has covered all aspects of exploration, including deep holes.  The outcome has shown the project to be extremely high in potential with First Quantum stating their believe that the orebody style resembles that of the Kamoa-Kakula mine in the nearby Congo and the Western Foreland style mineralisation associated with Kamoa.  This represents a potential significant major discovery for Zambia, First Quantum and of course, African Pioneer. 

 

Apart from the deeper style Kamoa-Kakula mineralisation, there has been near surface mineral discoveries with indication of grades somewhat higher than traditional Copperbelt.  This mineralisation is again, considered to be similar to Kolwezi mineralisation, which supported major high-grade mining in the DRC. 

 

We are extremely excited about the prospects of our licences and look forward to a year of more intensive exploration and therefore more definition of overall potential.

 

The Botswana joint venture with Sandfire continues satisfactorily and our own exploration, which intercepted the sought after lithology has been reinterpreted and we are excited about the prospects and the regions yet to be tested.  The Kalahari Copperbelt has been the region of much interest over the last 18 months, with old theories and models being challenged by new discoveries and drilling results.

 

Most of this new work adds value to our positions and reinforces our believe that one or more licences have the potential to enhance considerable shareholder value to the African Pioneer holders.

 

Despite considerable headwinds the copper price stayed strong throughout the period, with forecast for the coming years, ranging from USD10-USD15,000 per tonne. 

 

We believe the crunch time for the supply side for copper will begin during mid '24 and continue through mid '25 and beyond.  This will make all junior mining companies who have good copper resources in reliable jurisdictions, targets for acquisitions for by major mining companies, traders and others.

 

We are confident that African Pioneer has an excellent copper resource base and is well positioned for such corporate activity.

 

I thank my fellow directors and management for their efforts during the period under review and beyond and we all continue to live in anticipation of small company renaissance, which is inevitable but long awaited. 

 

Yours sincerely,

 

Colin Bird, Chairman

African Pioneer Plc

28 April 2023

 

 

BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Colin Bird - Executive Chairman

Colin is a chartered mining engineer and a Fellow of the Institute of Materials, Minerals and Mining with more than 40 years' experience in resource operations management, corporate management, and finance.  Colin has multi commodity mine management experience in Africa, Spain, Latin America and the Middle East. He has been the prime mover in a number of public company listings in the UK, Canada and South Africa. His most notable achievement was founding Kiwara Resources Plc and selling its prime asset, a copper property in Northern Zambia, to First Quantum Minerals for US$260 million in November 2009.

 

Raju Samtani - Finance Director

Raju is currently finance director of Tiger Royalties and Investments Plc, listed on AIM. His previous experience includes three years as Group Financial Controller at marketing services agency WTS Group Limited, where he was appointed by the Virgin Group to oversee their investment in the WTS Group Ltd. More recently he was finance director of Kiwara Plc which was acquired by First Quantum Minerals Ltd in January 2010. Over the last few years, he has been involved in senior managerial positions for several AIM/Johannesburg Stock Exchange listed companies predominantly in the resource sector and has also been involved in FCA compliance work within the investment business sector.

 

Christian Cordier - Business Development Director

Christian has had considerable involvement in corporate finance and investments in both public and private mining and exploration companies for over 22 years. His portfolio includes joint ventures with major international mining houses, investments in listed companies in the United Kingdom, Australia and Southern Africa as well as private mining operations. He has extensive experience in sourcing natural resource projects and nurturing them through the value curve by packaging and arranging venture funding, managing the permitting and exploration process, negotiating off-take agreements and the formation of a strong management team. He worked as CFO and senior accountant as well as company secretary for private and public companies and is a member of SA Institute for Professional Accountants ("SAIPA"). Christian has done transactions in Coal, Platinum Group Metals, Chrome, Copper, Potash, Phosphates, Diamonds, Gold, Lithium and Manganese. Christian focuses on business development and wealth creation for private and publicly listed companies in the mining and exploration sector.

 

Kjeld Thygesen - Independent Non-Executive Director

Kjeld Thygesen is mining investment veteran of more than 45 years. After being a mining analyst at James Capel in the latter half of the 1970's he was manager of the commodities department at Rothschild Asset Management between 1980-89. In 1990 he formed Lion Resource Advisors as a specialist adviser in the mining and natural resource sectors. LRA was the advisor to the Midas Fund in the US between 1992 - 2000, which was one of the top performing finds during that period. From 2002-2008 he was Investment director of Resources Investment Trust, a London listed investment trust which returned a threefold investment during that period. He has served on several mining company boards over the past twenty years.

 

James Cunningham-Davis - Non-Executive Director

James Cunningham-Davis is a qualified Solicitor and a Fellow of the Chartered Institute for Securities & Investment, founder of the law firm Buckingham Legal and founder and Managing Director of Cavendish Trust Company Ltd, and Cavendish Secretaries Limited, all of which are headquartered in the Isle of Man. Cavendish Trust and Cavendish Secretaries provide professional services to many private companies and various listed companies, across a number of sectors of industry and finance in many jurisdictions, though particularly in the Natural Resources/Mining, Technology and Property sectors. James has worked within the international legal and corporate finance/service sectors for more than 25 years and has held many directorships in both private and listed companies.

 

 

FINANCIAL CORPORATE AND OPERATIONAL REVIEW

 

INTRODUCTION

 

African Pioneer Plc a company engaging in development of natural resources exploration projects in Sub-Saharan Africa presents its year-end results for the year ended 31 December 2022.

 

The Directors are required to provide a year-end report in accordance with the Financial Conduct Authorities ("FCA") Disclosure Guidance and Transparency Rules ("DTR"). The Directors consider this Financial, Corporate and Operational Review along with the Chairman's Report, the Strategic Review and the Director's Report provides details of the important events which have occurred during the period and their impact on the financial statements as well as the outlook for the Company going forward.

 

The Company's short to medium term strategic objectives are to enhance the value of its mineral resource Projects through exploration and technical studies conducted by the Company or through joint venture or other arrangements (such as the Option Agreement of selected Botswanan Projects with Sandfire Resources and also the more recent the option agreement with First Quantum on its 4 North-West Zambian licences) with a view to establishing the Projects can be economically mined for profit. With a positive global outlook for both base and precious metals, the Directors believe that the Projects provide a base from which the Company will seek to add significant value through the application of structured and disciplined exploration.

 

Financial Review

 

Financial highlights:

 

·      Consolidated (Loss)/Profit Loss: £671k £loss after tax (2021 restated : £273k - profit)

 

·      Approximately £72k cash at bank at the period end (2021: £1.19m).

 

·      The basic and diluted profit (losses) per share are summarised in the table below

Profit (Loss) per share (pence)
		2022	2021 restated
Basic	Note 6	( 0.35)p	0.24p
Diluted	Note 6	(0.29)p	0.20p

·      Net asset value as at 31 December 2022 was £5.36m (31 December 2021 £6.06m)

 

Fundraisings:

The Company did not undertake any fundraisings during the period as it had sufficient working capital from the funds raised in 2021 at Admission and the option payment received from Sandfire Resources Limited in relation to certain of the Botswana Projects.

 

Corporate Review

 

Company Board: The Board of the Company comprises Colin Bird, Executive Chairman Raju Samtani, Finance Director Christian Cordier, Business Development Director Kjeld Thygesen, Independent Non-executive Director James Nicholas Cunningham-Davis, Non-executive Director. 

 

Listing: The Company was admitted to the Official List (Standard Segment) and commenced trading on the Main Market for listed securities of the London Stock Exchange on 1 June 2021 (the "Listing" or "IPO").

 

Corporate Transactions:  On 19 January 2022, the Company and its 80% owned subsidiary African Pioneer Zambia Ltd ("African Pioneer Zambia") entered into an option agreement with First Quantum Minerals Ltd ("First Quantum") (listed on the Toronto Stock Exchange) in relation to 4 of the 5 Zambian exploration licences held by African Pioneer Zambia (the "Option Agreement"). 

 

Highlights of Option Agreement:

·      The four exploration licences the subject of the Option Agreement are in the highly prospective Central Africa Copperbelt in northwest Zambia which is the largest and most prolific mineralized sediment- hosted copper province in the world and are located less than 100km from First Quantum's giant Sentinel copper mine.

 

·      The exploration licenses include geological formations similar in age and rock type to that hosting the major copper deposits of the Copperbelt

 

·      During the initial 18-month option period First Quantum has the right but not the obligation to spend US500,000 on each of the exploration licences 27767-HQ-LEL, 27768-HQ-LEL, 27770-HQ-LEL, and 27771-HQ-LEL (the "Zambian Projects").  At this stage First Quantum will not have earned any shares in African Pioneer Zambia, just the right to proceed to take one or more of the properties into the First Earn In Period by issuing an Option Exercise Notice.

 

·      During the First Earn In Period, First Quantum then has 2 years when it has the right but not the obligation to prepare a Technical Report in respect of the Zambian Projects demonstrating an Indicated Mineral Resource of at least 300,000 tonnes of contained copper (the "Technical Report Requirement"). First Quantum is to fund the Technical Report. Once the Technical Report is issued First Quantum has the right to be issued shares equal to a 51% shareholding in African Pioneer Zambia. This will also trigger the Second Earn-In Period.

 

·      In the Second Earn-In Period First Quantum shall have the right but not the obligation to complete all necessary mining, metallurgical and development studies to establish a mine at the Property and make a public announcement that it intends to proceed towards commercial development of a Mine on the Property (a "Decision to Mine"). First Quantum is to fund all costs related to the Decision to Mine.  Once First Quantum announces a Decision to Mine First Quantum has the right to be issued shares in African Pioneer Zambia to increase their 51% shareholding in African Pioneer Zambia to 75%.

 

Additional Information

First Quantum: is one of the world's top 10 copper producers operating in several countries including Zambia where it owns the Sentinel and Kansanshi mines in North West Zambia and is known for its specialist technical engineering construction and operational skills which have allowed it to develop and successfully run complex mines and processing plants. Colin Bird, the chairman of African Pioneer,  was a founder of and floated Kiwara Plc in around 2008 which discovered copper in northwest Zambia and was sold to First Quantum in 2009 for U$260 million. First Quantum then developed the Kiwara Plc projects into the Sentinel mine which is the world's 14^th largest copper mine.

 

Zambian Projects: The licence package covers part of the north-western extension of the Zambian Copperbelt. The properties are located within 80-100km of First Quantum's giant Sentinel copper mine, one of the largest copper mines in Africa, with a reported Measured and Indicated Resources of 891Mt @ 0.45% Cu. They also lie close to the Enterprise nickel deposit (37.7Mt @ 1.03% Ni) which is being reportedly moved towards development. 

 

The Zambian Projects lie on the Lufilian Fold Belt in the Domes region of the Central African Copperbelt, straddling the western boundary of the Kabompo Dome, underlain principally by rocks of the Lower and Upper Roan, as well as the stratigraphically higher Kundelungu and Nguba Groups. This geological package is similar in age and rock type to that hosting the major copper deposits of the Copperbelt, including Sentinel. Therefore, the licence areas are considered to be strongly prospective for Copperbelt-type copper/cobalt and/or nickel deposits. They are historically underexplored, representing the westerly extension of the Copperbelt which has not been investigated in detail, as previous work focussed primarily on the central part of the zone.

 

On the Luamata South licence (27771-HQ-LEL), African Pioneer has acquired a valuable exploration package arising from recent work by MMG Zambia Ltd ('MMG') which highlights strong soil/airborne magnetic targets that were not drill tested, as MMG pulled out of Zambia. The Samuteba East licence (27770-HQ-LEL) was recently held by Anglo American which also carried out airborne magnetic surveying and reconnaissance soil sampling before exiting the Copperbelt. The soil data highlights several copper anomalies of considerable interest.

 

Exploration licence 27769-HQ-LEL owned by African Pioneer Zambia which is not covered by the Option Agreement is in the Zambezi area located within the Zambezi belt of southern Zambia that hosts a Lower Katanga supergroups succession will be transferred from African Pioneer Zambia to a new Zambian company to be owned 80% by the Company and 20% by its local partners.

 

Operational Review

The Company completed an Initial Public Offering (IPO) on the Standard List of the London Stock Exchange and the acquisition of its projects in Namibia, Zambia and Botswana in 2021 and in 2022 granted an option to First Quantum in relation to 4 of the 5 Zambian exploration licences held by African Pioneer Zambia more details of which are provided in the Corporate Highlights section of this review.

 

Technical review of Projects: After the IPO and having acquired its projects in Namibia, Zambia and Botswana, the Company commenced technical reviews and / or programmes on its the projects located in Namibia and Zambia. The primary metal in all countries is copper with by-product potential in all of our projects. In Zambia we have potential for cobalt, in Botswana for silver and in Namibia for gold.

 

Namibia:

The Company has a 85% interest in the Namibian Projects and on 20 December 2021 announced a  3.76 Mt increase in the Measured & Indicated Mineral Resources of the Ongombo Project Mineral Resources to 10.47Mt @ 1.4% Cu, 7g/t Ag at a cut-off of 1.0% Cu, with 0.35g/t Au categorised as Inferred following a JORC (2012) compliant review by external consultant, Red Bush Analytics, the submission of a mine application and a positive scoping study by Practara Consulting.

On 24 May 2022, a shallow diamond drilling programme commenced on the Ongombo Project, Namibia and on 29 September 2022 the Company announced  

Highlights:

·      A Mining Licence has been approved by the Ministry of Mines and Energy of Namibia

 

·      The Company is in the process of completing an Environmental and Social Impact Assessment ("ESIA") which will trigger the start of the mine development process

 

·      The completed drill programme is targeting potential near-surface copper - gold mineralisation not included in the existing underground mineral resource estimate. 26 holes completed to date with copper - gold mineralisation present in 25 holes

 

·      Peak assay intercepts from near-surface drilling include 5.39% Cu eq over 0.82m, 4.72% Cu eq over 1.15m, 3.96% Cu eq over 1.15m, 3.24% Cu eq over 0.945m, 2.64% Cu eq over 1.39m and 2.46% Cu eq over 1.42m

 

·      A zone of near-surface copper mineralisation extending over an area of approximately 750 metres by 185 metres at an average grade of greater than 1% Cu

 

·      A coincident gold zone covering an area of 500 metres strike length and a variable width of between 50 metres and 185 metres at an average gold grade of greater than 0.4g/t Au

 

·      External resource consultant to undertake a mineral resource estimate for near-surface mineralisation once all assay data has been received.

 

Update on the Near-Surface Mineralisation & Drill Programme

 

A zone of presumed mineralisation extending approximately 180m from the outcropping gossan that identifies the Ongombo orebody at surface down-dip has been drilled. Historic low-density drilling failed to define any mineralisation and it was assumed that as the orebody progressed up-dip towards the gossan outcrop that sulphide mineralisation in the form of pyrite and chalcopyrite would give way to oxides of copper. Recent drilling has broadly defined a zone of predominantly copper sulphide mineralisation to depths of around 10 to 15m vertical depth.

 

On completion of the balance of drilling and the receipt of outstanding assays, a mineral resource estimate will be generated by external consultants that is expected to add to the existing underground resource and generate a new open pittable mineral resource. Open pit excavation will potentially reduce the amount of primary underground development required to access underground ore by stripping waste rock to expose the mineralised horizon and ultimately leaving a highwall that can be used to develop a portal for the planned decline. Work will be done to optimise the open pit resource to generate a mineable resource sufficient to feed a plant for a minimum of 12 months whilst primary development advances to access underground ore.

 

Further studies are required to confirm the amenability of Ongombo ore to both standard flotation processing and gravity and XRT pre-concentration methods. Provisional assessment indicates that the ore is typical of that found on this part of the Matchless Belt and therefore suitable for recovery of copper and gold through a variety of recovery methods.

 

Table 1: Ongombo Near-surface Drill Programme Selected Average Weighted Assay Results for First 26 Drillholes

Borehole ID	From (m)	To (m)	Mineralised Width (m)	Grade (% Cu)	Grade (g/t Au)	Grade (Cu eq)*
APD001	11.81	14.81	3.0	0.42	0.78	0.96
APD002	21.25	22.2	0.945	2.42	1.19	3.24
APD003	8.82	10.37	1.55	2.18	0.50	3.0
APD004	20.5	21.5	1.0	0.75	0.27	0.94
APD005	11.69	13.11	1.42	2.12	0.49	2.46
APD006	36.63	38.04	1.41	0.73	0.15	0.83
APD007	50.42	51.42	1.0	0.47	0.14	0.56
APD008	50.58	51.73	1.15	2.95	1.47	3.96
APD009	30.41	31.80	1.39	2.36	0.41	2.64
APD010	7.9	9.0	1.1	0.11	0.66	0.56
APD011	16.7	17.48	0.78	0.69	0.17	0.80
APD012	33.26	34.05	0.785	1.11	0.21	1.25
APD013	46.04	47.2	1.15	4.44	0.40	4.72
APD014	66.74	68.79	2.05	0.60	0.14	0.70
APD015	39.14	39.82	0.68	1.03	0.19	1.16
APD016	25.88	27.25	1.37	0.98	0.31	1.19
APD017	16.0	16.57	0.57	1.33	0.33	1.56
APD018	No Mineralised Intercept
APD019	27.33	28.56	1.23	1.48	0.26	1.65
APD020	53.9	54.72	0.82	4.59	1.17	5.39
APD021	41.27	43.0	1.73	1.56	0.33	1.78
APD022	13.86	14.84	0.975	2.03	0.21	2.17
APD023	50.33	51.77	1.44	1.55	0.73	2.05
APD024	66.47	67.08	0.61	0.99	0.32	1.21
APD025	38.49	39.62	1.13	0.90	0.15	1.00
APD026	19.59	21.42	1.83	1.31	0.43	1.60

*A copper price of US$8,000 and a gold price of US$1,700 were used for the purposes of calculating a copper equivalent grade.

 

The Company has elected to investigate the potential for an open pit to mine copper sulphides and oxides. Oxides are known to occur at or near surface from the outcrop of the Ongombo deposit coincident with the Central Shoot. Initially assumed to extend for a strike length of approximately 350m, recent drilling has extended the zone coincident with copper grades >1% Cu to over 750m.  Drilling has also demonstrated that the down-dip extension from the gossan outcrop extends in some locations to approximately 185m, considerably wider (in the horizontal plane) than initially anticipated at 100 to 150m.

 

Subject to mineral resource estimation work following the completion of drilling and the return of assay data, indications are that a viable copper resource suitable for open pit extraction may occur. There also appears to be scope to add to the existing underground resource with deeper mineralised intercepts expected to be beyond any future pit floor. The bulk of mineralisation defined to date with the exception of the zone closest to the Ongombo gossan outcrop and to a vertical depth of between 10 and 15m is sulphide-type mineralisation dominated by pyrite and chalcopyrite.

 

The Ongombo orebody plunges to the NNE and an area has broadly been defined suitable for mine infrastructure where any future ore extraction would be from underground.

 

Environmental and Social Impact Assessment ("ESIA")

The ESIA was submitted in Q4 202 and post year end on 25 April 2023 the award of an Environmental Clearance Certificate for the Ongombo (copper-gold) Project located within Exclusive Prospecting Licence EPL 5772 was announced.

 

 

Zambia:

As mentioned in the Corporate Transactions summary above on 19 January 2022 African Pioneer Zambia Ltd   entered into an option agreement with First Quantum (listed on the Toronto Stock Exchange FM.TO) in relation to 4 of the 5 Zambian exploration licences held by African Pioneer Zambia.

On 24 October 2022 and on 6 February 2023 the Company has provided updates on the ongoing exploration activities undertaken by First Quantum during Q3 and Q4 2022 on the 4 Zambia licences subject to the Option Agreement the Company believes these updates to be very encouraging and below summarise the highlights and also provide detail of the exploration activities during the second half of 2022. We have provided this information in the following four sections:

 

1. Highlights of Q3 2022 exploration undertaken by First Quantum (24 October 2022 announcement)

2. Highlights of Q4 2022 exploration undertaken by First Quantum (6 February 2023 announcement)

3. Work Completed Q3 2022

4. Work Completed Q4 2022

5. Planned Exploration Work

 

1. Highlights of Q3 2022 exploration undertaken by First Quantum (24 October 2022 announcement)

·      The September 2022 latest quarterly report from joint venture partner First Quantum Minerals demonstrates very positive results including confirmation of copper mineralisation in drill testing of three new targets. 

·      Soil geochemical surveys were carried out over seven targets.

·      Air-core drilling was carried out over 3 targets defined by soil geochemistry has discovered copper in veins and disseminations at all the prospects tested to date, with visual estimations ranging from trace up to 2% copper mineralisation over some 75m in hole TUAC012.

 

·      Completion of an audio-magnetotelluric ("AMT") geophysical survey totalling 54.9-line km has detected architectural patterns typically associated with Congolese-type copper mineralisation presenting an exciting new exploration concept in parallel with the existing targets.

·      A deep drillhole has commenced to examine the prognosis that the geologic setting may be analogous to the 'Western Foreland' in the nearby DRC, host to Ivanhoe Mines Limited's recently commissioned Kamoa mine, reported to become one of the largest copper mines in the World.

 

2. Highlights of Q4 2022 exploration undertaken by First Quantum (6 February 2023 announcement)

·      The fourth quarter 2022 report from joint venture partner First Quantum confirmed encouraging copper oxide intercepts at three shallow drill targets and potentially significant copper mineralisation in two holes on a separate licence being explored for geological settings similar to the giant Kamoa-Kakula deposits in the DRC.

·      Preliminary analytical results for shallow air-core drilling completed in the previous quarter over soil geochemical targets on licence 27770-HQ-LEL recorded several copper mineralised intervals hosted in black shales on the Turaco and Eagle targets - final assay results are awaited.

·      Two deep drillholes were completed 5km apart at the Ikatu target on licence 27767-HQ-LEL to test if the geologic setting is analogous to the 'Western Foreland' domain in the nearby DRC, host to Ivanhoe Mines Limited's Kamoa-Kakula mines, projected to be one of the highest grade major copper mines in the world. The target Diamictite unit was encountered in both holes, with visible copper mineralisation being identified at different stratigraphic levels in each hole:

o  Hole IKDD001A intersected chalcocite, bornite and chalcopyrite copper mineralisation about 180m below the Diamictite unit over 2.9m from 430.9m depth

o  Hole IKDD002 encountered a 2m zone of strong alteration and irregular disseminated chalcocite mineralisation at the base of the target Diamictite unit at about 600m depth

·      First Quantum considers it is a positive sign to see copper mineralisation at the same Grand Conglomerat/Diamicrite stratigraphic level as at Kamoa-Kakula in DRC.

·      Future work planned by First Quantum includes additional AMT geophysical survey lines in 27767-HQ-LEL, further diamond drilling at the Ikatu target, follow up diamond drilling at the Turaco and Eagle targets and aircore drilling of additional targets in 27770- and 27771-HQ-LEL.

 

3. Work Completed Q3 2022

Soil Sampling

Infill soil sampling was undertaken at seven targets across large-scale exploration licences 27770- and 27771-HQ-LEL. Analysis was carried out in-house by pXRF. The best results received were from the Eagle and Turaco targets in 27770-HQ-LEL (Kasongo licence) and Kanyika and Chipopa in 27771-HQ-LEL (Luamata South licence). Geological mapping and rock sampling was also carried out at all seven targets across both licences.

 

Receipt of XRF analyses for the bulk of the soil samples collected and subsequent interpretation has generated several coherent zones of copper anomalism over significant areas, up to 1,406ppm Cu.

 

At Turaco, significant Cu soil anomalism was encountered (> 250ppm Cu over 2.3 x 2.2km area, up to 1,406ppm Cu) adjacent to a major structure and overlying an interpreted salt diapir in AMT.

 

At Eagle, significant soil Cu anomalism occurs (5 x 2km, up to 795ppm Cu) adjacent to a major structure and overlying an interpreted salt diapir in AMT.

At Kanyika, a string of high tenor soil Cu anomalies was delineated (up to 983ppm Cu) associated with a major NE-trending structure.

At Chipopa, a strong soil Cu anomaly occurs straddling a major lithotectonic boundary (>150ppm Cu over 2.3 x 1.3km, up to 639ppm Cu).

Air-Core Drilling

Air-core drilling of the Turaco, Eagle and Kanyika targets totalled 66 holes for 4,028m. Such drilling is designed to provide first-pass information on the shallow geology and mineralisation beneath sand and laterite cover rather than a definitive target test.

 

At Turaco, copper mineralisation encountered included drillhole TUAC012 which intersected carbonaceous shale from surface with 1% malachite, which transitioned to a lighter grey talc-altered shale with dolomite-chalcopyrite veins (up to 3% volume) after 29m depth. Dolomite-chalcopyrite veins continued to end-of-hole (75m) and after 70m there is very fine-grained disseminated chalcopyrite (up to 2%, 0.8% Cu on pXRF) within strongly silicified shale.

At Eagle, the most frequently encountered units were strongly altered shales, breccias and mafic intrusives. Several drillholes intersected a vuggy ferruginous silicified rock with Mn-oxide coating fractures which yielded anomalous Cu and Ni on pXRF (>1,200ppm Cu). This strongly silicified rock was not possible to drill through with air-core and was typically found adjacent to altered breccias. Best visible mineralisation was from the West of the target area in hole EAAC014, which intercepted a zone from 99-103m of brecciated carbonaceous shale with dolomitic infill with up to 2% disseminated chalcopyrite.

At Kanyika, in the NW of the area drilled, there is a doleritic sill overlain by a micaceous sandstone and quartzite (possibly contact metamorphosed). The dolerite often has patches of strong alteration and intense calcite-hematite veining, sometimes associated with minor disseminated chalcopyrite and/or pyrite (up to 0.5%).

Audio Magneto-Tellurics (AMT) Geophysical Survey

This survey was completed the across the 27770-HQ-LEL (Kasongo) and 27767-HQ-LEL (Ikatu) licences in June 2022. In total, 54.9 line km was surveyed in 2022. Such deep penetrating surveys can provide important information on the structural and stratigraphic framework of the region to assist with target selection and evaluation.

AMT results from Kasongo suggest soil anomalies could be related to salt diapirism adjacent to major structures (e.g. classic Congolese-style). AMT lines within the Ikatu licence suggest that the Western Foreland domain boundary passes through the licence. This domain in Zambia could offer prospective stratigraphy like the world-class Kamoa-Kakula deposit complex in the DRC.

A 'framework' diamond drillhole was planned to test stratigraphy within the Western Foreland domain at Ikatu to see if a conductive unit within the sedimentary package here overlies basement at depth.

4. Work Completed Q4 2022

Air-Core Drilling Analytical Results

pXRF analytical results have now been received for sample pulps from the 2022 air-core shallow drilling programme at Turaco and Eagle targets in 27770-HQ-LEL. Selected intervals of interest are shown in Table 1 below. At Turaco, best results were from the north of the target where drillhole TUAC012 intersected several significant copper intercepts within a silicified and talc-altered black shale, including an oxide mineralised zone with 8m @ 1.19% Cu from 5m depth. Elsewhere at Turaco, another drillhole intersected 1m @ 1.14% Cu within a thin black shale unit.

At Eagle target, the best intercept was in drillhole EAAC005 which intersected 29m @ 0.33% Cu, including 7m @ 0.61% Cu within a strongly chlorite-clay altered rock.

 

Table 1 - Selected pXRF* Analytical Intervals From Aircore Drilling Programme
Target	Hole No.	Depth From (m)	Depth to (m)	Interval (m)	Cu%
Turaco	TUAC012	5	20	15	0.80
	incl.	5	13	8	1.19
		30	36	6	0.34
		44	57	13	0.73
		61	75	14	0.57
	TUAC017	66	67	1	1.14
Eagle	EAAC005	37	66	29	0.33
	incl.	46	53	7	0.61

 

It is planned to send samples from TUAC012 for a 4-acid ICP analysis with ALS Global laboratories in Johannesburg to check for cobalt and other metal contents not possible to analyse with pXRF.

Drillholes adjacent to TUAC012, interpreted to be within the footwall of the mineralisation in TUAC012, exhibit strong magnesian hydrothermal alteration within shales, breccias and diamictite. These drillholes also contain abundant pyrite mineralisation as well as minor chalcopyrite.

 

'Framework' Diamond Drilling - Ikatu Target

Two diamond drillholes were successfully completed at the Ikatu target about 5km apart within the Western Foreland domain in licence 27767-HQ-LEL. Both holes encountered copper mineralisation at two different stratigraphic positions.

The first drillhole (IKDD001A, 603.0 m), intercepted a diamictite unit from 229m to 252m, but with no visible copper mineralisation. The diamictite has an oxidised sandstone matrix as opposed to the reduced diamictite which hosts copper mineralisation at Kamoa-Kakula in DRC. However, at greater depth in IKDD001A, a 2.9m intersect of copper mineralisation (chalcocite, bornite and chalcopyrite) was encountered from 430.9m to 433.8m at the top of a sequence of reduced rhythmites (sandstone-siltstone and shale interbeds).

The second drillhole (IKDD002, 650.3m) also intersected the diamictite unit from 593.3m to 602.3m. For the most part, the diamictite unit is hematitic and oxidized, as in IKDD001A, but at the base of the unit there is a 2m interval with strong chlorite alteration and disseminated chalcocite mineralisation selectively targeting certain clasts. First Quantum considers it is a positive sign to see copper mineralisation at the same part of the stratigraphy as at Kamoa-Kakula in DRC.

No analytical information is available as yet for the mineralisation encountered in these holes. First Quantum  plans to send half core samples to the ALS Global laboratory in Johannesburg for 4-acid ICP analysis.

 

Air Core sampling / pXRF analysis methodology

Each one metre interval Air Core sample is riffle split before being despatched to Intertek prep lab in Kitwe, Zambia. Samples are dried at 1050°C for 8 hours, pulverised and sieved to 180 micron (SP13 method). The prepared samples were then transported to an in-house lab at Kansanshi, where the powdered pulps are analysed by a portable X-ray fluorescence (pXRF) instrument, analysing for 28 elements. The pXRF analysis includes the use of regular standards and blanks for calibration however some variation to wet assay laboratory techniques can be expected and results are therefore considered indicative only

 

5. Planned Work

Further planned work includes:

¾    Additional AMT survey lines in 27767-HQ-LEL

¾    Further diamond drilling at Ikatu target in 27767-HQ-LEL

¾    AC drilling of additional targets in 27770- and 27771-HQ-LEL

¾    Sampling of remaining soils in 27771-HQ-LEL (Chibwika East)

¾    Mapping and soil sampling in 27767- and 27768-HQ-LEL

¾    Follow up diamond drilling at Turaco and Eagle targets

 

Botswana:

On 4 October 2021 the Company announced that it had entered into a two-year option agreement with ASX listed Sandfire Resources Limited (ASX:SFR) ("Sandfire") in relation to 4 of its 8 Botswana prospecting licences for a cash payment of US$500,000 and the issue of 107,272 Sandfire shares (share price on 3 May 2022 - A$5.60 - approx. £3.17) and a 24 months exploration expenditure commitment of US$1,000,000 (the "Botswana Option Agreement"). 

Post the period end on 29 March 2023 the Company announced an update on exploration completed and planned over the Kalahari Copper Belt Licences which are the subject of the Botswana Option Agreement.

 

Highlights

·      PL101/2020 - Assays pending for a soil survey with further surveys planned over copper surface sample anomalies together with a scheduled Airborne Gravity Gradiometry survey ("AGG") over the Kuke Prospect

·      Sandfire plans to mobilise a diamond rig to the Kuke Prospect to drill test a copper soil anomaly coincident with the Kuke Fault

·      PL100/2020 - Ongoing target generation and a scheduled AGG survey over the licence

·      Sandfire also plans to undertake drilling on this licence in the coming weeks to test the Lower D'kar/Ngwako Pan contact zone which is the horizon hosting most of the Kalahari Copperbelt deposits

 

Outlook

Outlook for Copper: During the second half of 2022 into 2023 the copper price has recovered and forecasts for the price of copper and its by-product metals remain positive in the range of US$10-US$15,000 per tonne. The outlook for copper supply is quite pessimistic as most large copper mining projects have been shelved as a result of political or economic reasons but we anticipate and from mid '24 onwards this will lead to both smaller but profitable mines being developed , and junior mining companies with good copper resources in reliable jurisdictions becoming potential targets for acquisitions by major mining companies. As a result, the Company is well positioned with all its projects, to take part in a potential acquisition boom or alternatively to attract financing for its own operations which might not otherwise have been available.

 

The major mining companies are seeking new projects for acquisition and all our projects have the fundamentals which may attract the attention of larger companies as reflected in the fact that we have already entered into an agreement with Sandfire in relation to certain of the Botswana Projects and First Quantum in relation to certain of the Zambian Projects.

 

We feel that there is a strong possibility that the current inflationary pressures and higher interest rates may slow down stock markets but these conditions will be beneficial for the smaller metal producers who have historically outperformed under these economic conditions.

 

The Board feels the Group has assembled an enviable portfolio of projects and we are pleased that Sandfire has taken and retained a significant equity position in the Company. We look forward to advancing all our projects and providing our shareholders with the prospects of enhanced value flowing into next year.

 

By Order of the Board

28 April 2023

 

 

DIRECTORS' REPORT

The directors present their report on the affairs of African Pioneer Plc (the "Company") for the year ended 31 December 2022. The Company was incorporated on 20 July 2012.

 

PRINCIPAL ACTIVITIES

 

The principal activity of the Company and its subsidiaries (the "Group") is the exploration for base metals in Zambia, Namibia and Botswana.

Investing in small natural resource projects and mineral exploration projects can be very rewarding, but because of the issues and uncertainties arising from exploration, resource estimation, commodity price volatility, politics and the financing of such projects, there is a significant possibility of such reward not materialising. As a result of the nature and size of the Company it will, in the early years particularly, be exposed to a concentration of risk either by sector or geographically, or possibly both. These risks are outlined in more detail in the Strategic Report.

 

REVIEW OF THE BUSINESS

 

During the year, the Group made a loss of £(670,871) - 2021: restated profit of £273,471.

A review of the current and future development of the Group's business are included in the Strategic Report.

The Directors do not recommend the payment of a dividend.

 

SUBSEQUENT EVENTS

 

Details of subsequent events after the year end are disclosed in note 18 o the financial statements

 

DIRECTORS

 

The names of the Directors who served throughout the period and subsequent to the year end, except where shown otherwise, are as follows:

 

  C Bird

R. Samtani

C Cordier

K Thygesen

J Cunningham-Davis

 

Directors' interests in the ordinary share capital of the Company at the date of this report are disclosed within the Directors Remuneration Report

 

DIRECTOR'S REMUNERATION

 

The Directors' remuneration is detailed in the Directors' Remuneration Report on pages 19 to 21

 

DIRECTORS' AND OFFICERS' INDEMNITY INSURANCE

 

The Group has purchased Directors' and Officers' liability insurance which provides cover against liabilities arising against them in that capacity

USE OF FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

 

Details of the use of financial instruments and associated risk management by the Group are included in note 3 to the financial statements.

 

SUBSTANTIAL SHAREHOLDINGS

 

Other than Directors interests which are set out below on a separate table in this report, the following shareholders held 3% or more of the issued share capital of the Company at 21 April 2023.  These holdings are extracted as they appear in the relevant custodian account in the Company's share register.

 

Registered Shareholder	No. of Ordinary Shares		% of Ordinary Shares in issue
The Bank Of New York (Nominees) Limited *	34,785,714		18.15%
Sandfire Resources Limited	28,418,932		14.82%
HSBC Global Custody Nominee (UK) Limited *	24,871,784		12.97%
Hargreaves Lansdown (Nominees) Limited *	15,871,987		8.28%
Mohamad Ali Ahmad	15,000,000		7.82%
Jim Nominees Limited *	7,142,856		3.73%
Vidacos Nominees Limited *	6,715,095		3.50%
	132,806,368		69.28%

*Nominee shareholder; not beneficial owner.

 

 

UK STREAMLINED ENERGY AND CARBON REPORTING

The Group's UK energy and carbon information is not disclosed as the Company qualifies as it consumed less than 40MWh and is a Low Energy user in the UK.as defined in the  Environmental Reporting Guidelines Including streamlined energy and carbon reporting guidance March 2019 (Updated Introduction and Chapter 1) and as such is not required to provide detailed disclosures of energy and carbon information. The Company has no UK-based subsidiaries and its overseas subsidiaries, some of which own exploration licences and conduct exploration activities outside the U.K. are not required to report U.K. energy consumption in their own right. The Company was also below this threshold in 2021.

 

 

POLITICAL DONATIONS

 

The Group made no political donations during the year (2021: none).

 

STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO

THE AUDITORS AND DIRECTORS' RESPONSIBILITIES STATEMENT

 

The Directors (being Colin Bird-Chairman, Raju Samtani-Finance Director, Christian Cordier-Business Development Director, Kjeld Thygesen -Independent Non-Executive Director and James Cunningham-Davis Non-Executive Director, who were in office at the date of approval of this report, confirm that, so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware of and that they have taken all reasonable steps to take themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

 

The Directors are responsible for preparing the financial statements in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with International Financial Reporting Standards as adopted by the United Kingdom.

 

The Directors confirm to the best of their knowledge that:

 

•        the financial statements have been prepared in accordance with the relevant financial reporting framework and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the Company; and

 

•        the Strategic Report and Directors' Report include a fair review of the development and performance of the business and the financial position of the Group and the Company, together with a description of the principal risks and uncertainties that it faces; and

 

•        the annual report and financial statements, taken as a whole, are fair, balanced, and understandable and provide the information necessary for shareholders to assess the Group's position, performance, business model and strategy.

 

AUDITORS

 

The auditors, Shipleys LLP have indicated their willingness to continue in office. A resolution to re-appoint them will be proposed at the forthcoming Annual General Meeting.

 

Signed on behalf of the Board:

   

28 April  2023

 

Colin Bird                                                                     Raju Samtani

Executive Chairman                                                   Director

 

DIRECTORS' REMUNERATION REPORT

 

This Remuneration Report sets out the Group's policy on the remuneration of Directors, together with details of Directors' remuneration packages and service contracts for the year ended 31 December 2022.

 

The Company's policy is to maintain levels of remuneration to attract, motivate, and retain Directors and Senior Executives of the highest calibre who can contribute their experience to deliver industry-leading performance with the Company's operations. The Company is nonetheless mindful of the need to balance this objective with the fact that it is pre-revenue.

 

Since listing on 1 June 2021, the Company's Directors have largely remunerated through a combination of modest salaries and/or fees and where relevant, equity positions as founders and as a result the total salaries and fees payable to directors has been relatively modest.

 

As the Company grows, and increasingly makes hires, it will become necessary to move to a more long-term and sustainable policy, which continues to align the interests of Directors and senior staff with those of shareholders while recognising that new hires will not initially have a significant equity position.

 

Accordingly, it is likely that compensation packages for Executive Directors will need to move over time to a level more consistent with the market. Currently, Directors' remuneration is not subject to specific performance targets. The Company is sufficiently small that the Board does not consider that it is necessary to impose such targets as a matter of principle but believes that exceptional performance can be rewarded on an ad hoc basis.

 

As outlined in last year's Directors Remuneration Report the Board proposed and shareholders approved at the 2022 AGM a share option scheme which is to incentivise both Executive and non-Executive Directors as well individuals holding positions of responsibility in the Company ("Share Option Scheme"). On 24 January 2023 the Company announced that pursuant to the Executive Share Option Scheme approved at the Company's Annual General Meeting ("AGM") held on 23 August 2022 16,850,000 options over Ordinary Shares ("Options") were awarded,  6,600,000 of the Options were awarded to directors of the Company, as detailed further in Note 18 and the balance of 10,250,000 Options to other eligible participants. The Company had not previously issued any Options.

 

The 2022 AGM also approved the Company establishing new incentive schemes to more closely align the interest of directors, officers, employees and consultants with those of shareholders by providing for the payment of short-term, annual and transaction incentive awards in cash or Company shares (the "Proposed Incentive Schemes"). Awards under the Proposed Incentive Schemes are not intended to replace the Share Option Scheme arrangements and the Proposed Incentive Schemes,  shall continue in place until the Board of the Company have put an alternative incentive scheme to the Company's shareholders which the Company's shareholders have approved. 

 

The Board considers the remuneration of Directors and senior staff and their employment terms and makes recommendations to the Board of Directors on the overall remuneration packages. No Director takes part in any decision directly affecting their own remuneration.  

 

There has been no correspondence to date from shareholders relating to Directors' remuneration matters and therefore no such matters have been considered by the Board in formulating the Company's remuneration policy.

 

In determining Executive Director remuneration policy and practices, the Board aims to address the following factors:

 

•      Clarity - remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce;

•      Simplicity - remuneration structures should avoid complexity and their rationale and operation should be easy to understand;Risk - remuneration arrangements should ensure reputational and other risks from excessive rewards, and  risks that can arise from target-based incentive plans, are identified and mitigated;

•      Predictability - the range of possible values of rewards to individual directors and any other limits or discretions are identified and explained at the time of approving the policy;

•      Proportionality - the clarity of the link between individual awards, the delivery of strategy and the long-term performance of the company should be clear; and

•      Alignment to culture - incentive schemes, when implemented will drive behaviours consistent with company purpose, values and strategy.

 

Directors' remuneration

 

Remuneration of the Directors for the years ended 31 December 2022 and 2021 was as follows:

 

	2022	2022	2022	2021
	Directors' Fees	Consulting Fees	Total Emoluments	Total Emoluments
	£	£	£	£
C. Bird	18,000	42,000	60,000	35,000
R. Samtani	18,000	32,004	50,004	29,169
C Cordier	18,000	12,000	30,000	16,500
K Thygesen	18,000	-	18,000	10,500
James Cunningham-Davis	14,400	-	14,400	9,300
Total	86,400	86,004	172,004	100,469

 

 

Each of the Directors entered into service agreements at the time of the Company's admission to the market on 1 June 2021. Details of Directors' Letters of Appointment and Service Agreements as disclosed in Note 16 of these Financial Statements.

 

There were no pensions or other similar arrangements in place with any of the Directors during the years ended 31 December 2022 or 2021.

 

Payments to past directors

The Company did not pay any compensation to past Directors in 2022 and 2021.

DIRECTORS' INTERESTS

The beneficial interest of the directors, their spouses and minor children in the share capital of the Company are as follows:

Ordinary Shares of No Par Value

 

	31 December 2022	31 December 2021
C Bird*	21,061,728	21,061,728
R Samtani	16,061,728	16,061,728
J Cunningham-Davis***	-	-
C Cordier**	15,000,000	15,000,000
K Thygesen	200,000	200,000

 

* Colin Bird's shareholding includes 5,000,000 ordinary shares held by Campden Park Trading, a company owned and controlled by Colin Bird , the Company's Chairman

** Christian Cordier's shareholding includes 4,000,000 ordinary shares held by Tonehill Pty Ltd and 3,000,000 ordinary shares held by Coreks Super Pty Ltd both of which companies are owned and controlled by Christian Cordier. It also includes

8,000,000 ordinary shares held by Breamline Pty Ltd of which Christian Cordier is a director and which is a trustee company for Breamline Ministries

*** 230,000 warrants are held by Cavendish Trust of which James Cunningham -Davis is a director and a controlling majority shareholder.

 

There have been no further changes in directors' interests since the year end other than the issue of Options detailed below which were announced on 23 January 2023.

 

 

Approved by the Board on 28 April  2023