TIDMPOW
RNS Number : 3241Y
Power Metal Resources PLC
31 December 2019
31 December 2019
Power Metal Resources plc ("POW" or the "Company")
Botswana Project - Earn In Confirmed
Power Metal Resources plc (LON:POW) the AIM listed metals
exploration and development company is pleased to announce that it
has provided written confirmation to Kalahari Key Mineral
Exploration Pty Limited ("KKME") that POW has elected to earn in to
a 40% interest in the Molopo Farms Complex ("MFC") project
currently 100% owned by KKME.
To earn in to the 40% MFC project interest POW must expend
US$500,000 on project related expenditure to support drilling of
key nickel-copper-PGM targets in 2020. The spend requirement of
US$500,000 is fully covered by POW's existing cash resources.
In addition to the 40% direct project interest that will be
allocated on completion of the earn in, POW also holds 18.26% of
KKME equity and therefore upon earn in completion, POW will hold an
effective economic interest of 50.96% in the MFC project.
Paul Johnson Chief Executive Officer of Power Metal Resources
plc commented: "Progress achieved at the MFC project has been very
encouraging in 2019, with the helicopter airborne electromagnetic
work delivering 17 subsurface conductor targets and the ground
geophysics highlighting 5 key targets for initial drilling.
In recent weeks we have held a number of meetings and
discussions with the KKME team and there is clear and growing
confidence in the potential of the MFC project for a nickel
discovery. We are now working with the KKME team on preparations
and options for an upcoming drill programme and will provide
further updates to the market as material developments occur.
I would like to be clear that exploration drilling of the nature
we plan to support is high risk, albeit the in-depth preparatory
work undertaken by KKME helps to mitigate that risk and increase
the chance of success. That said, I also want to be clear why we
are enthusiastic and have decided to proceed with the earn in
opportunity. It is rare for investors in the junior resource space
to have exposure to near term drill campaigns that could have the
potential to yield a large-scale nickel sulphide discovery and we
believe that the MFC project is one such opportunity.
If exploration work proves to be successful, the potential
valuation of the MFC project could rise dramatically and the
project could attract considerable interest from larger mining
companies, as evidenced by the interest already shown to date and
by the companies that hold ground in the vicinity of the MFC
project."
KKME AND MFC PROJECT BACKGROUND
KKME, registered in Botswana, is a mineral exploration and
geological consultancy company.
The MFC Project consists of three licenses covering an area of
2,725 square kilometres that are considered prospective for
nickel-copper-PGMs mineralisation and are 100% owned by KKME.
In November 2016 the company acquired two mineral exploration
licences (PL310/2016 and PL311/2016) from the Botswana Government.
The licences cover the eastern and central parts of a shear/feeder
zone through the centre of the Bushveld-related Molopo Farms
Complex in southern Botswana. A third licence (PL202/2018) was
acquired in early 2018 immediately to the south of PL311/2016.
A helicopter-borne electro-magnetic ("EM") survey over the
Molopo Farms Feeder Zone project area completed in Q2 2019
identified 17 sub-surface conductor targets and follow up ground EM
surveys over 14 of the targets produced at least 6 high priority
targets of considerable size and scale for which 8 drill holes have
been designed to penetrate all targets.
The targets are highly conductive bodies which could potentially
be host to massive nickel sulphides due to the spatial location,
particular geological setting and associated magnetic response.
Further work has been undertaken to select the top priority
targets and 5 were selected as a focus for the initial drilling
programme.
KKME appointed consultants Wellfields Consulting Services in
Gaborone, Botswana to complete a pre-drilling Environmental
Management Plan ("EMP") and fieldwork in respect of this EMP has
now been completed and KKME await receipt of the EMP report.
KKME have implemented gravity surveys over the 5 drill targets,
to eliminate as far as possible any chance that the targets are
graphite rather than sulphide bodies, since the former although
conductive would not be of interest, although this is considered
unlikely given the geological setting. The final gravity survey
report is awaited.
Further liaison with drilling contractors is underway, including
some who have expressed a willingness to consider equity in lieu of
cash for a portion of their drilling costs in respect of the
initial programme.
There is interest in the MFC Project from third parties and KKME
are maintaining liaison with external organisations.
FURTHER INFORMATION ON THE POW PROJECT LEVEL EARN-IN TO THE MFC
PROJECT
Not later than 31 December 2019 POW was able to elect, at its
sole discretion, to earn-in to 40% of the MFC Project by entering
into and then fulfilling a commitment to spend US$500,000
("Committed Spend") during the period to 31 December 2020. With
today's announcement this earn-in is now effectively underway.
An MFC Project operational committee (the "Committee") will now
be established comprising members Roger Key (KKME Director), Andrew
Bell (POW Director) and Andrew Moore (KKME Director). The Committee
will determine the allocation of the Committed Spend and management
of operational activities. Upon completion of the earn-in
expenditure requirement POW will hold 40% of the MFC Project. Paul
Johnson (POW Director) will join the Board of KKME.
The Committed Spend will be applied primarily to the completion
of drilling of high profile targets at the MFC Project.
A joint venture agreement will now be established between the
parties which will determine strategy, operational management and
corporate structuring. This will include the usual fund or dilute
provisions unless an alternate structure is agreed by the
parties.
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No.596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
For further information please visit
https://www.powermetalresources.com/ or contact:
Power Metal Resources plc
Paul Johnson (Chief Executive Officer) +44 (0) 7766 465 617
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat +44 (0) 20 3470 0470
SI Capital Limited (Joint Broker)
Nick Emerson +44 (0) 1483 413 500
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson +44 (0) 20 7330 1883
Notes to Editors:
Power Metal Resources plc (LON:POW) is an AIM listed metals
exploration and development company exploring for the key metals
used in power generation, transmission, storage and utilisation.
The Board and team of advisors, who have proven expertise in
exploration, mining and project generation, have identified an
opportunity to utilise the Company's position to become a leader in
the London market for investors to gain exposure to the power metal
commodity suite, particularly cobalt, lithium, copper and
nickel.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDMMMFZLGKGLZM
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December 31, 2019 02:00 ET (07:00 GMT)
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