London-listed Arc Minerals has entered into a binding  agreement for its wholly-owned Zambian subsidiary Foreland Minerals to acquire the Chingola copper project, in the Zambian Copperbelt, from Brxton Construction.

"The acquisition of the Chingola project is another important step in Arc's strategy to expand its presence in the Zambian Copperbelt. We have pursued this asset for the past 18 months in a highly competitive environment,” says Arc chairperson Nick von Schirnding.

He points out that the project is located in the north-eastern part of the Copperbelt and that it is very attractive, with historically higher grades than in the north-west of the Copperbelt.

The 311 km² licence area is located in close proximity to existing operating mines, including Vedanta Resources’ Nchanga mine and Moxico Resources’ Mimbula mine.

“We will start a comprehensive soil sampling programme imminently, which is fully funded, and we look forward to reporting back to shareholders on our initial findings,” he adds.

Arc will pay Brxton an initial $50 000 as part of the transaction.

That will be followed by further staged payments, subject to certain exploration milestones and regulatory approvals.

Under the terms of the agreement, Arc will issue to Brxton $25 000 in Arc shares upon full satisfaction or waiver by Arc of the conditions precedent to the transaction.

A further $100 000 in cash and $150 000 in shares is payable on the earlier of the start of a drilling programme or 24 months after completion of the transaction. A second instalment payment of $50 000 in cash and $50 000 in shares is payable within ten business days of establishing an economic Joint Ore Reserves Committee-compliant copper resources exceeding 500 000 t.

Arc has also committed to paying $50 000 in cash and $50 000 in shares within ten business days of completing and announcing a successful definitive feasibility study; and to paying a 2% net smelter royalty, capped at $5-million, with a right of first refusal in favour of Arc pursuant to a royalty agreement to be entered into on or before completion of the transaction.

ANGLO AMERICAN JV

Meanwhile, Von Schirnding says Arc is also finalising an upcoming drill programme at the Zambian copper project (ZCP) joint venture (JV) project with Anglo American.

Under its agreement with Anglo American, Arc can earn-in on the ZCP by making a number of project expenditures and assuming operatorship of the project.