African Pioneer, Galileo, Bezant & Xtract

Will the Colin Bird four move from exploration to production in 2025?

Good Morning Team.

It’s been a while since we had a look at the CB portfolio, but I think 2025 could be the year they all start to deliver. Copper and Zambia in particular are red hot, and there is decent momentum in the space.

I’m going to approach this one a little differently - looking at the key catalyst for each stock in 2025. Even though these companies have conducted significant drilling, the reality is that the market needs to see a hard financial return.

And that means production, asset sales, or high grade assays.

Let’s dive in.

African Pioneer

There are two potential catalytic moments for AFP:

• Project level funding for Ongombo in Namibia

• High grade assays from exploration with FQM in Zambia

Both of these should come in 2025.

Let’s consider Ongombo:

EPL 5772 has been renewed until 1 February 2026, the Environmental and Social Impact Assessment (ESIA) nearing completion, and there have been positive X-ray transmission (XRT) ore sorting test results with strong potential for the use of laser or color sensor technology for separating ore and waste.

The asset’s updated total (gross) Mineral Resource Estimate (MRE) includes:

• Indicated: 5.7Mt at 1.1% CuEq (0.94% Cu and 0.23g/t Au).

• Inferred: 23Mt at 1.1% CuEq (0.95% Cu and 0.24g/t Au).

And the company is now engaged in advanced discussions with multiple parties for project-level funding. AFP has also engaged external consultants to reassess the open-pit resource in light of ore sorting results, and is considering utilisation of excess capacity at a Namibian copper concentrator to produce saleable copper-gold concentrate.

The project is located just 45 km from Windhoek, the capital of Namibia. It’s connected by tar roads, gravel roads, and a railway line - and the mineralisation zone spans 7 km in length and 0.5–1 km in width.

And a 20-year Mining License (ML 240) was granted on 10 August 2022, covering one-third of the open-pit resource. An extension request has been submitted to include the wider resource area.

2025 could well see a commercial deal signed.

On Zambia & FQM, First Quantum Minerals has exercised the option for four Zambian exploration licenses.

Drilling and exploration highlights include:

• Turaco target: 4 diamond drill holes totaling 1,297.1m.

• Ikatu target: 772.3m diamond drill hole on an Audio Magneto Telluric (AMT)-generated target.

• Chipopa target: 9 reverse circulation (RC) drill holes totaling 780m.

FQM has identified Congo-style mineralisation, in the right lithological setting, and has continued its evaluation of these licenses with ground relinquishment strategy and exploration programs - focused on developing valuable geological data in a complex Fold and Thrust Belt.

Get the right assays and this should bounce. Add in the five Botswana licenses -renewed through 31 March 2026, covering 770 square kilometres in the Kalahari Copperbelt - targeting smaller-scale deposits for potential mining operations targeting 5,000–10,000 tonnes of contained copper annually….and there are a good few chances to re-rate.

For context, it’s worth noting that the company recently secured a £1,000,000 unsecured convertible loan facility with shareholder Sanderson Capital Partners, convertible at 2.8p per share.

The share price currently stands at 1.4p, making this an attractive source of finance.

Galileo Resources

For Galileo, the catalyst is Lunasobe, in which the company holds a 75% interest through a joint venture with Statunga Investments Limited.

The project is located 15 km northwest of the Mufulira Mine, a major copper producer in Zambia's Copperbelt region. Copper mineralization extends along a strike length of approximately 3 km, dipping at an angle of 20–30° to the northeast.

Galileo was recently awarded two small-scale mining licenses at the project:

• License 1 covers shallow open-pittable areas.

• License 2, issued on 4 August 2024, encompasses potential underground resources.

• The licenses were granted for a period of 10 years, covering a combined area of 384 hectares.

There is a JORC 2012 resource at Luansobe already:

• Open-pit resources of 5.8 Mt at 1% Cu (cut-off 0.25%), containing 56,000t Cu.

• Underground resources of 6.3 Mt at 1.5% Cu (cut-off 1%), containing 97,000t Cu.

• And an exploration target of 3–7 Mt at 1–1.5% Cu at depths of 100–300m, requiring deeper drilling to confirm.

External consultants have already conducted studies to define mining schedules and optimize resources - with the geological block model updated to include low-grade ore and potential ore in the overburden.

Sensitivity analysis has now highlighted various scenarios for open-pit operations:

• Depth of 220m (cut-off 0.25% Cu): 9.12 Mt of run-of-mine ore, containing approximately 70,000 tonnes of copper.

• Depth of 160m (cut-off 0.5% Cu): 4.41 Mt of run-of-mine ore, containing approximately 40,000 tonnes of copper.

Mine designs and trade-off studies are currently underway to inform contractor negotiations. The project has identified multi-stage development potential, including open-pit mining, shallow underground operations, and deep underground mining.

There is potential for operational flexibility through separate mining and processing arrangements aimed at maximizing profitability. Further collaboration with third-party contractors and potential investors is under review.

Galileo is currently completing detailed mine design and scheduling, conducting deeper drilling to evaluate additional underground resources.

Bird notes:

‘We are now convinced that we have a two, possibly three-stage, project with a substantial Cu ore resource suitable initially for O/P mining and potentially followed by a large scale UG operation. Naturally a project of this size and definition has attracted considerable interests from third parties and as such we have entertained numerous enquiries concerning potential involvement in varying ways. The Board of Galileo is acutely aware that embarking on a particular development route would probably be exclusive to other routes thus removing the optionality of best value outcome for the Galileo shareholders.’

Another one into production next year?

Bezant Resources

For Bezant, the production potential comes from the 70%-owned Hope and Gorob Copper-Gold Project - located in the Namib Desert, within the Swakopmund district of the Erongo region, Namibia.

The project is situated approximately 250 km northeast of Windhoek and 120 km northwest of Walvis Bay, with access provided by gravel roads.

This site has seen significant exploration by nine companies over the past century. Bezant Resources drilled 28 diamond holes totaling 2,680 meters between 2020 and 2023, while Kuiseb Mining drilled 118 diamond holes covering approximately 40,000 meters from 2006 to 2008. Historical drilling data from the 1970s also contributed to the October 2023 Mineral Resource Estimate (MRE).

The MRE, prepared by Addison Mining Services to JORC standards, defines:

• 15 Mt at 1.2% Cu, equivalent to 190,000 tonnes of contained copper.

• Indicated Resource: 1.24 Mt at 1.6% Cu and 0.4 g/t Au (Hope deposit).

• Inferred Resource: ~14 Mt at 1.2% Cu across the Hope, Gorob, Vendome, and Anomaly deposits.

Gold assays were absent from historic drill holes, but Bezant's data suggests gold grades ranging from 0.2 to 0.4 g/t Au.

Open Pit and Underground Potential

The project demonstrates strong potential for both open-pit and underground mining:

• Open Pit: 2.4 Mt at 1.25% Cu, with plans to expand by 0.7–1 Mt. The pit could sustain five years of operations at a processing rate of 500,000 tpa.

• Underground Mining: Feasible using a concrete-lined shaft and open-pit access. The Hope Deposit shows 0.9 Mt at 2.04% Cu and 0.48 g/t Au, supporting a four-year operation. Gorob and Vendome deposits offer an additional 1.01 Mt at 1.28% Cu, extending operations by two years at 480,000 tpa.

Gold Credits and Economic Viability

Gold mineralization could contribute significantly to project economics. At US$2,700/oz, gold credits are estimated to add approximately US$35 per tonne of ore. High-grade historic gold intercepts include:

• HPD004: 2.0 g/t Au over 1.35 m.

• HPD009: 2.57 g/t Au over 0.3 m.

• VED001: 5.89 g/t Au over 1.76 m.

• Gold grades up to 6.76 g/t Au have been reported in historic samples, and structural controls on high gold values are under investigation.

Let’s consider the progress over the past couple of months:

• 16 October 2023: The company received a "notice of preparedness" for Mining Licence 246, conditional upon completing the Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) within six months. Representation of historically disadvantaged Namibians is also required.

• 7 November 2023: Optimisation and geotechnical drilling commenced. External reviews of geotechnical work and metallurgical flow sheets are ongoing, with assessments for increasing plant throughput capacity.

• 15 November 2023: Sound Mining International delivered a technical report. The Hope Deposit mine design and production schedule are progressing, with Hope pit optimization targeting 2.4 Mt of run-of-mine ore at 1.25% Cu and 0.25 g/t Au for a five-year operation. Operating costs are projected at US$50.80/t RoM (US$5,020/t contained Cu).

Copper is currently trading at $4.10/lb and gold at $2,600/oz. Given that there are circa 2,220 pounds to a tonne, and 31g to an ounce, it’s easy to see the attractiveness:

Open Pit (Hope Deposit)

• Total material mined @ 2.4 million tonnes RoM

• Copper grade of 1.25% - equals 2.4 million tonnes multiplied by 0.0125 - results in 30,000 tonnes of contained copper.

• Gold grade of 0.25 grams per tonne. 2,400,000 tonnes multiplied by 0.25, results in 600,000 grams or 19,290 ounces of contained gold.

• Assuming a copper recovery of 90%, copper recovery of 80%….

• 30,000 tonnes of copper, multiplied by 2,204.62 pounds per tonne, multiplied by 0.9 recovery rate, multiplied by $4.10/lb equals $243,399,300,

• 19,290 ounces of gold, multiplied by 0.8 recovery rate, multiplied by $2,600/oz equals $40,083,840.

Total revenue: $283,483,140.

Operating costs constitute 2.4 million tonnes multiplied by $50.80/t, which equals $121,920,000.

This leaves net revenue (profit, but will be tax etc) of $161,563,140 dollars for five years, or $32,312,628 per year.

That’s just the open pit. Add in the underground, Gorob and Vendome deposits and it gets even better!

Xtract Resources

Xtract is not going to produce soon - this one is a funded exploration play. As a reminder, the company’s disposal of the Manica Project to MMP gives it up to $15 million in staged payments - more than enough to continually explore all projects:

Western Foreland Expansion (Zambia)

The company has expanded its land holdings to five licenses, covering a total area of 173,586 hectares in Zambia’s Western Foreland district. This strategic positioning enhances its presence in an area recognized as a potential extension of the Central African Copperbelt, home to world-class deposits such as Kamoa-Kakula.

The Western Foreland district is increasingly attracting attention from major mining companies for its sediment-hosted copper deposits. Exploration progress includes data compilation, ground truthing, and target identification, with priority zones expected to be drill-ready by the end of the year.

Silverking Mine Joint Venture (Zambia)

The Silverking Mine joint venture presents a high-grade copper discovery opportunity. Historic exploration by Glencore in 2012 revealed significant breccia-hosted copper mineralization, including drill results of 50 meters at 5.47% Cu from a depth of 55 meters and intercepts peaking at 52.2% Cu. The company’s strategic goal for this project is to evaluate the potential for Iron Oxide Copper Gold (IOCG) mineralization through further exploration and development initiatives.

Bushranger Copper-Gold Project (Australia)

The Bushranger Copper-Gold Project in Australia has achieved promising results from a pre-concentration study. Using NovaCell Coarse Particle Flotation, the project recorded a 78% copper recovery into 5% of the processed mass, upgrading copper grade from 0.19% Cu to 2.8% Cu.

This method demonstrated a 30% higher recovery efficiency compared to conventional flotation, outperforming other techniques such as pre-screening and dense media separation due to the disseminated nature of chalcopyrite in the host rock. The project’s exploration license (EL5574) has also been renewed for three years, ensuring continuity until June 2027.

If copper goes sustainably higher, this one could well make it to production.

Key Developments in Zambia and Mozambique

In Zambia, Xtract recently finalised a collaboration agreement for the Chilibwe Mining license, which covers 27,527 hectares near significant mines such as Eurasian Resources Group's Frontier Mine and the historic Mufulira Copper Mine.

The agreement grants the company a 25% interest in the project through exploration planning and funding efforts. Despite ongoing legal challenges related to a joint venture dispute, a drilling program is set to commence in November 2024, targeting cobalt, copper, gold, and nickel deposits.

The bottom line

African Pioneer, Galileo and Bezant may all be producing by this time next year. Their market caps are tiny; but the potential to generate millions of dollars of revenue is right there.

Xtract has millions to explore.

2025 may be the year they all deliver.