Zambezi Resources Thursday announces that it has placed GBP2 million worth of shares in Zambezi at a price of 14 pence per share to Glencore International and entered in a legally binding Memorandum of Understanding ("MOU") to finalise a Joint Venture agreement.

The JV area covers the exploration and development of the Cheowa and Chongwe Copper Belt Projects.

Under the terms of the placement agreement signed Thursday, Zambezi placed 14,285,715 ordinary shares with Glencore, which will give Glencore an 11.5% stake in Zambezi.

Glencore is now a substantial shareholder in Zambezi.

On completion of the final terms of the Joint Venture Agreement, Zambezi will make a further placement to Glencore to raise an additional GBP1 million.

The issue price for the second placement will be the higher of 14 pence per share or the weighted average price for the five days prior to the signing of the definitive Joint Venture Agreement.

The second tranche placement of GBP1 million will be a related party transaction and subject to applicable AIM rules.

The two Joint Ventures comprise the Cheowa Project Joint Venture ("Cheowa") and the Chongwe Copper Belt/Chalimbana Projects Joint Venture ("CCB"). At Cheowa, Glencore can earn 51% by spending US$10 million on exploration, with a minimum commitment of US$4 million.

If Zambezi elects not to maintain their 49% interest in the JV, then Glencore may earn an additional 20% of the project by completing a Bankable Feasibility Study or spending up to an additional US$10 million on the project.

Zambezi can be diluted to a minimum 15% of the project prior to the development decision. At CCB, Glencore can earn 51% by spending US$6 million on exploration, with a minimum commitment of US$2.4 million. Zambezi will be Joint Venture Manager for both projects until Glencore reaches 51% of either of the joint venture projects.

Glencore is a privately held, diversified natural resources company with worldwide activities in the smelting, refining, mining, processing, purchasing, selling and marketing of metals and minerals, energy products and agricultural products.

In the Copperbelt of Zambia, Glencore owns 73% of Mopani Copper Mines Plc ("Mopani"), an integrated copper and cobalt producer. Mopani is in the process of completing a major upgrade to their smelting operations which consist of a new Isasmelt copper smelter and acid plant at Mufulira and an acid plant upgrade at their Nkana cobalt smelter and refinery.