TIDMPOW
RNS Number : 3796R
Power Metal Resources PLC
29 October 2019
29 October 2019
Power Metal Resources plc ("POW" or the "Company")
Botswana Nickel Project - Progress Update
Power Metal Resources plc (LON:POW) the AIM listed African
focused metals exploration and development company is pleased is
pleased to provide an update in respect of the progress achieved by
Kalahari Key Mineral Exploration Pty Ltd ("Kalahari Key" or "KKME")
at the Molopo Farms Complex project in Botswana ("MFC" or the "MFC
Project").
The targets are believed to be highly prospective for massive
nickel sulphides.
Power Metal Resources has an 18.26% shareholding in Kalahari Key
and also has a right by 31 December 2019 to elect to earn into a
40% direct project interest in the MFC project by investing
US$500,000 in the Project by 31 December 2020 (the "Earn-in").
Highlights:
-- 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 have now been selected as a focus for the initial
drilling programme;
-- Kalahari Key have 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 Kalahari Key await receipt of
the EMP report;
-- Kalahari Key are to shortly implement gravity surveys over 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;
-- 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
Kalahari Key are maintaining liaison with external
organisations;
-- Given the potential valuation uplift on a positive initial
drill results the preference at this stage would be to undertake
the initial drilling programme before formalising any agreement
with a third party in respect of project or company disposal,
farm-in or joint venture; however all options remain open to
discussion, subject to appropriate commercial terms;
-- Further updates to shareholders will be provided at the earliest opportunity.
Paul Johnson, Chief Executive Officer of Power Metal Resources
commented: "Kalahari Key are rapidly advancing in Botswana to a
position where they can drill the high priority targets. The
initial programme will cover 5 very strong conductor targets and
will optimise the chance of making a discovery.
Nickel stocks at the LME continue to fall dramatically, and we
believe that the price of nickel will appreciate accordingly. As
such, partially positioning POW in the nickel exploration space is
deliberate to expose our shareholders to the upside that comes
within the nickel sector during times of positive supply/demand
dynamics.
We continue to focus on delivery and progress across our
projects and anticipate a number of updates across our company in
the coming weeks."
Kalahari Key and MFC Project Background
Kalahari Key Mineral Exploration Company (Pty) Ltd, 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 Kalahari
Key.
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.
Power Metal Resources Interest in Kalahari Key and The MFC
Project
Power Metal Resources has an 18.26% shareholding in Kalahari Key
and also has a right by 31 December 2019 to elect to earn into a
40% direct project interest in the MFC project by investing
US$500,000 in the Project by 31 December 2020 (the "Earn-in").
Should the Company elect to Earn In, Power Metal Resources will
hold an effective economic interest of 50.96% in the Project.
The Company's Kalahari Key acquisition agreement was announced
on 13 May 2019 and readers can review this announcement through the
following link:
https://www.powermetalresources.com/n/n104/acquisition-and-earn-in-agreement-botswana-project
Further Information on the POW Project Level 40% Earn-In to the
MFC Project
Not later than 31 December 2019 POW may 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.
Upon POW entering into the Earn-in (or earlier with the
agreement of all parties) an MFC Project operational committee (the
"Committee") will be established comprising members Roger Key
(Kalahari Key Director), Andrew Bell (POW Director) and Andrew
Moore (Kalahari Key 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
The Committed Spend will be applied primarily to the completion
of drilling of four targets at the MFC Project.
Also, upon POW entering into the Earn-in (or earlier if agreed
by all parties) Paul Johnson (POW Director) will join the Board of
Kalahari Key.
Neither the Committee members nor the existing or new directors
of Kalahari Key will be remunerated for their services.
Also, upon the Company entering into the Earn-in, a Joint
Venture Agreement will 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
Notes to Editors:
Power Metal Resources plc (LON:POW) is an AIM listed African
focused 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 nickel, copper and
cobalt.
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
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