(Alliance News) - Arc Minerals Ltd on Thursday said it has signed a binding joint venture agreement with a subsidiary of Anglo American PLC regarding its copper interests in northwestern Zambia.

The Africa-focused base metals exploration company with projects in Zambia and Botswana said Anglo American will have the right to retain up to 70% shareholding in the joint venture company of up to USD88.5 million, based on exploration expenditures announced in May last year.

At this time, Arc Minerals added that Anglo American will make cash payments to it of up to USD14.5 million as part of the investment.

The deal and its related investments and cash payments are subject to certain conditions being met, such as standard Zambian regulatory approvals.

It follows Arc Minerals and the Anglo American subsidiary agreeing a 13 business day extension over the deal's preceding exclusivity agreement to accommodate the completion of "certain outstanding steps"

"[This is] a major turning point for Arc Minerals. Upon closing this will see the recommencing of the exploration campaign by the joint venture under the management of Anglo American, a renowned industry leader, whom we are delighted to be partners with going forward. I look forward to updating shareholders on progress over the coming months," said Arc Minerals Executive Chair Nick von Schirnding.

Shares in Arc Minerals were up 6.6% to 4.37 pence each in London on Thursday morning, while Anglo American was down 2.5% to 2,694.00 pence each and down 1.5% to ZAR611.09 each in Johannesburg.

By Greg Rosenvinge, Alliance News reporter

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