Aim-listed African Pioneer on October 2 entered into a two-year option agreement with ASX-listed Sandfire Resources in relation to four of its eight Botswana prospecting licences for a cash payment of $500 000, the issue of 107 272 Sandfire shares and a 24-month exploration expenditure commitment of $1-million.
This is in place of existing arrangements previously entered into between African Pioneer and Sandfire.
African Pioneer says it has entered into the option agreement to allow for an acceleration of exploration activities on the four Kalahari Copper Belt prospecting licences.
Funds received will also enable the company to accelerate exploration activities on its other four prospecting licences in Botswana and its projects in Namibia and Zambia.
Under the terms of the agreement, Sandfire has the option to acquire, within two years of the option agreement, the included licences for $1. Sandfire has the right to extend the option period by one year through the payment of a $500 000 option extension fee.
There is a one-off success payment to be paid to African Pioneer for the first ore reserve reported under the Joint Ore Reserves Committee Code 2012 edition on the included licences which exceeds 200 000 t of contained copper in the range of $10-million to $80-million depending on the amount of contained copper in the first ore reserve.
“We are pleased to be working with our 15% shareholder Sandfire . . . The transaction allows Sandfire to fund the exploration of the included licences, which are in close proximity to their major mine build, and also allows the company to carry out exploration on its four other Botswana prospecting licences,” African Pioneer CEO and chairperson Colin Bird says.