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From: Nigel
ArtDate: 31st August 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.114.152
Date: 09/09/06
Time: 16:12
31st August 2006
Zambezi Resources - Glencore Strategic Copper Alliance
News Item - Conduit PR
Glencore to jointly explore two of Zambezi's copper projects in Zambia Glencore to invest £3 million in Zambezi Glencore to spend US$16 million to earn 51% of two joint venture projects Zambezi Resources Limited ("Zambezi" or the "Company"), the Zambian focused exploration company, today announces that it has placed £2 million worth of shares in Zambezi at a price of 14p per share to Glencore International AG ("Glencore") and entered in a legally binding Memorandum of Understanding ("MOU") to finalise a Joint Venture ("JV") agreement. The JV area covers the exploration and development of the Cheowa and Chongwe Copper Belt Projects.
Under the terms of the placement agreement signed today, Zambezi placed 14,285,715 ordinary shares with Glencore, which will give Glencore an 11.5% stake in Zambezi. Glencore is now a substantial shareholder in Zambezi. On completion of the final terms of the Joint Venture Agreement, Zambezi will make a further placement to Glencore to raise an additional £1 million. The issue price for the second placement will be the higher of 14p per share or the weighted average price for the five days prior to the signing of the definitive Joint Venture Agreement. The second tranche placement of £1 million will be a related party transaction and subject to applicable AIM rules.
The two Joint Ventures comprise the Cheowa Project Joint Venture ("Cheowa") and the Chongwe Copper Belt/Chalimbana Projects Joint Venture ("CCB"). At Cheowa, Glencore can earn 51% by spending US$10 million on exploration, with a minimum commitment of US$4 million. If Zambezi elects not to maintain their 49% interest in the JV, then Glencore may earn an additional 20% of the project by completing a Bankable Feasibility Study or spending up to an additional US$10 million on the project. Zambezi can be diluted to a minimum 15% of the project prior to the development decision. At CCB, Glencore can earn 51% by spending US$6 million on exploration, with a minimum commitment of US$2.4 million. Zambezi will be Joint Venture Manager for both projects until Glencore reaches 51% of either of the joint venture projects.
Glencore is a leading privately held, diversified natural resources company with worldwide activities in the smelting, refining, mining, processing, purchasing, selling and marketing of metals and minerals, energy products and agricultural products. In the Copperbelt of Zambia, Glencore owns 73% of Mopani Copper Mines Plc ("Mopani"), an integrated copper and cobalt producer. Mopani is in the process of completing a major upgrade to their smelting operations which consist of a new Isasmelt copper smelter and acid plant at Mufulira and an acid plant upgrade at their Nkana cobalt smelter and refinery. On completion of the Mufulira upgrade, the plant will have a capacity to treat 1 million tonnes per annum of copper concentrate.
Commenting today Julian Ford, Managing Director of Zambezi, said: "Today's joint venture with Glencore gives us the development support of a major global commodities company with a significant presence already in Zambia. The joint venture will allow Zambezi to accelerate the exploration and development of two significant assets from the Zambezi portfolio both in terms of Zambezi's highly regarded Lusaka-based exploration team and Glencore's substantial Zambian infrastructure and financial strength."
A full version of this announcement, including maps is available from the Zambezi website at: www.zambeziresources.com
For more information contact:
Julian Ford, Managing Director Jeremy Wrathall, Non-Executive Director Zambezi Resources (Australia) Zambezi Resources (London) +61 (8) 9216 9000/+61 (4) 1894 9580 Mob: +44 7712 776 100
Laurence Read / Leesa Peters Conduit PR +44 20 7429 6666 / +44 7979 955 923
ADDITIONAL INFORMATION Glencore is a leading privately held, diversified natural resources company with worldwide activities in the smelting, refining, mining, processing, purchasing, selling and marketing of metals and minerals, energy products and agricultural products. Glencore operates on a global scale, marketing physical commodities produced in its industrial assets or purchased from third parties to industrial consumers, such as those in the automotive, steel, power generation, oil and food processing industries. Glencore also provides financing, logistics and other services to producers and consumers of commodities. These activities are supported by substantial strategic industrial assets relating to Glencore's core commodities. Energy products and commodities are marketed and coordinated primarily in Glencore's headquarters in Baar, Switzerland and through the offices of its subsidiaries in London, Stamford and Singapore
Zambezi was listed on London's AIM market in July 2004 with a large Zambian exploration portfolio of prospective copper and copper-gold targets in an area that had been devoid of any exploration for the past 30 years. Zambezi has achieved a first mover advantage for gold and copper-gold in Zambia which is fast becoming a favoured exploration destination in Africa. Zambezi has been successful in identifying a number of gold and copper projects which it is actively exploring. In October 2005, Zambezi spun out its Nickel assets as a separately listed company, Zambezi Nickel Limited.
An update on our portfolio of core assets, including Gold and Uranium projects, will be announced to the market by mid-September 2006.
Laurence Read Conduit PR Ltd 3rd Floor 76 Cannon Street London EC4N 6AE United Kingdom Direct: +44 (0) 20 7429 6605 Office: +44 (0) 20 7429 6666 Mob: +44 (0) 7979 955 923 Fax: +44 (0) 20 7429 6699 laurence@conduitpr.com
www.conduitpr.com
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