Kendrick Resources Secures Option for Exploration Licence in Zambia
Why we think this is good
The RNS announcement outlines Kendrick Resources' entry into an option and joint venture agreement for the exploration of the Blue Fox Licence in Zambia. This is a positive development as the licence is located in a highly prospective region and the agreement provides Kendrick with an opportunity to expand its exploration activities. The terms of the agreement appear reasonable, with Kendrick committing to spend at least $500,000 over 30 months to assess and explore the licence area. Overall, this news represents a good strategic move for the company, but does not meet the criteria for a 'Very Good' rating as it is not a profit upgrade or a trading update significantly ahead of market expectations.
Key Points
- Kendrick Resources has entered into an option and joint venture agreement for the Blue Fox Licence in northwest Zambia
- The licence is located in the highly prospective External Fold and Thrust Belt, which hosts major copper and cobalt deposits
- Kendrick has a 60-day option period to conduct due diligence, and if exercised, will commit to spending at least $500,000 over 30 months to explore the licence
- The parties will then form a joint venture company, with Kendrick holding a 70% stake
Summary
Kendrick Resources Plc has entered into an option and joint venture agreement with Cooperlemon Consultancy Limited for the exploration and potential development of the Blue Fox Licence, located in the highly prospective External Fold and Thrust Belt in northwest Zambia. The licence is situated along strike of and in the same belt that hosts the Tenke Fungurume and Mutanda mines in the Democratic Republic of Congo, which are known for their significant copper and cobalt deposits. Kendrick has a 60-day option period to conduct due diligence and, if exercised, will commit to spending at least $500,000 over 30 months to assess and explore the licence area. The parties will then form a joint venture company to further develop the project, with Kendrick holding a 70% stake.