African Pioneer (LSE:AFP) told investors it has started drilling at its Ongombo project in Namibia, marking the first field work under the mine development programme agreed with Hong Kong Xinhai Mining Services.
The London-listed copper exploration and resource development company said the programme has begun with a single drill rig, a deliberate first step to ensure technical staff are properly trained to manage the volume of core expected from the campaign.
African Pioneer signed a definitive financing and technical services agreement with Xinhai in July, under which Xinhai is funding a holding company that will own 95% of the Namibian projects via a 10% interest-bearing loan structured around four development milestones, from drilling through to commercial production of at least 720,000 tonnes per annum, at an estimated total cost of about $60 million.
The drill programme comprises 119 holes totalling about 7,000 metres and is expected to run several months, with a further period needed for final assay results.
Ongombo, which is 85% owned, already carries a 29 million tonne JORC (2012) mineral resource estimate grading 1.1% copper equivalent, defined by external consultants.
The company is also planning an onsite facility to receive, log, cut and sample core before testing, intended as a permanent, secure core storage facility.
Drilling objectives include validating three to four years of open-pit mining potential at Ongombo, testing up-dip extensions of mineralised bodies at the neighbouring Ongeama project for early-years open-pit feed, and gathering data to inform underground mine design and geotechnical assessment across both sites.
The programme will also target the East-Ost shoots, where drill density can be improved and where gold assays were not completed during historical 1980s drilling, with the shoots notably thicker in parts and potentially offering greater tonnage subject to further infill drilling.
A further aim is to combine Ongombo and Ongeama into a single mineral resource for mining and processing purposes.
"Our partners at Xinhai have been working closely with our Namibian-based team and we are providing the in-country technical skills required to manage the drilling programme including logging, sampling and sample custody for certified assays," said chairman Colin Bird.
Bird added that the company will update shareholders as it increases the number of drill rigs on site "to fast-track the programme".
