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Battery metals junior Patriot Lithium (ASX: PAT) plans to add copper to its portfolio through an agreement with Array Metals and Natural Resources allowing it to earn an 80% interest in the Katwaro project in Zambia.
This diversification move complements Patriot’s North American lithium exploration endeavours, despite a temporary setback on its Gorman lithium project in Ontario, Canada, due to land access issues.
“While negotiations to drill at Gorman continue, the board has decided to expand our project portfolio into other jurisdictions,” executive chair Hugh Warner said. “The company believes that the Katwaro copper project will complement our lithium assets and provide jurisdictional diversity, with respect to native title/sovereign risk and alternative weather windows for exploration.”
Patriot Lithium will pay Array Metals $25,000 for an exclusive 12-month option period. If the option is exercised, a special purpose vehicle (SPV) will be established, with the project transferred to it after a $250,000 payment to Array Metals.
Over the following 48 months, Patriot Lithium will fund exploration and feasibility studies as part of the agreement.
Located near Mumbwa, the Katwaro copper project spans 400 hectares and includes a historical open-pit mine with copper-bearing meta-sediments.
Zambia, Africa’s second-largest copper producer, has the ambitious goal to more than quadruple the country’s output to 3 million tonnes by 2031. This would require bringing into production multiple exploration projects the government is currently identifying.
Authorities announced this week plans to keep majority stakes in “promising” mining permits through a special purpose vehicle (SPV), as part of an ongoing mapping exercise in the country.
The mines minister, Paul Kabuswe, originally unveiled the SVP in late-August, saying it would control at least 30% of all critical minerals production from future mines.
BMO global commodities analyst Colin Hamilton said the minister has since been quoted in interviews saying the figure might be 45%.
“It now appears that the scope of this SPV has increased such that it can take a majority stake in promising mining licenses at its own discretion. The endless changes to Zambia’s mining regulations represent a significant risk to the country’s original aim of quadrupling the country’s copper output,” he wrote.
Subsidiaries of First Quantum Minerals (TSX: FM) and Barrick Gold (TSX: ABX) (NYSE: GOLD) are responsible for the majority of Zambia’s copper production, accounting for nearly two-thirds of the total output in 2023.
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