BHP Billiton Withdraws From Zambia Venture With Blackthorn

Exploration firm Blackthorn Resources Ltd. (BTR.AU) said Monday BHP Billiton Ltd. (BHP) is pulling out of their copper venture in Zambia, but will retain the right to a 2% production royalty on any metal mined from the area.

The decision will leave Sydney-based Blackthorn with 100% of the project. It currently owns 60% of the project, and BHP Billiton had a right to take an up to 80% stake by funding feasibility studies.

Blackthorn in a statement said it is well funded and plans to begin drilling as soon as possible, during which it will evaluate strategic funding options for further work at Mumbwa.

The company has engaged Tom Whiting, formerly vice president of exploration at BHP Billiton's minerals division, to assist with the design of a further phase of exploration and drilling of the deposit, which currently has an inferred mineral resource of 87 million metric tons of copper.

It said other targets within the 500 square-kilometer prospecting license area will also be considered for drilling, although half of the area will have to be relinquished when the license is renewed, which is due in the second half of the year.

"We are confident about the potential to expand this resource and also very optimistic about the prospectivity of the Mumbwa region," said Scott Lowe, managing director of Blackthorn. "There are targets within the lease area that remain untested and we are enthusiastic about drilling in these areas."

The company said the date for the termination of the joint venture with BHP Billiton and some detailed arrangements have yet to be agreed.

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

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