Power Metal Resources plc (LON:POW) the AIM listed African focused metals exploration and development company is pleased to outline the initial findings from an interpretation of the ground geophysics undertaken by Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key” or “KKME”) at the Molopo Farms Complex project in Botswana (“MFC” or the “Project”).
The Project consists of licenses covering an area of 2,725 square kilometres that are considered prospective for Nickel-Copper-PGMs mineralisation and is 100% owned by Kalahari Key.
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:
Paul Johnson, Executive Director of Power Metal Resources plc commented: “Once again, the Kalahari Key team have delivered on schedule with 6 priority drill targets outlined from the ground geophysics programme.
A full technical report is being finalised and we look forward to receipt of that document whereupon we can provide much more information to shareholders.
Given the surge in nickel prices of late, and what we believe are compelling supply/demand dynamics into the future, Power Metal Resources is fortunate to have this exposure to Kalahari Key and the promising MFC project in Botswana.”
BACKGROUND TO KALAHARI KEY AND THE MFC PROJECT
Kalahari Key, registered in Botswana, is a mineral exploration and geological consultancy company that was established by Roger Key, Andy Moore, Simon Bate and Rick Bonner in November 2014.
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.
The target mineralization is Ni-PGM in the shear/ feeder zone. Re-processing and re-interpretation of existing high-resolution airborne magnetic data and regional gravity data was initially used to identify target areas. Selected core from previous exploration programmes has also been examined to better understand the geology of the Complex.
Towards the end of 2018, NRGTM was contracted to complete a high-resolution helicopter airborne magnetic and Electro Magnetic survey over the feeder/shear zone using their Xcite TM methodology. The preliminary analysis of the new geophysical data identified 17 conductor targets within the feeder/shear zone.
In mid-2019 a ground geophysics programme was undertaken. The system employed was the High-Power Electro-Magnetic ("HPEM") transmitter capable of transmitting up to 200A together with the ultra-sensitive Supracon Jesse-Deep SQUID ("superconducting quantum interference device ") sensor hooked up to the industry standard EMIT Smartem24 receiver.
Transmitter loops of approximately 1km by 1km were laid out using 35mm2 aluminium wire and lines (100 or 200m spacing) were surveyed at either 50m or 100m reading interval, depending on depth to target. In total 11 loops were undertaken around 14 individual targets from the original helicopter EM Survey.
The data generated from the ground geophysics programme was reviewed in South Africa in August 2019 and 6 priority drill targets have been identified from which it is expected that 4 key targets will be the focus of a Phase 1 drilling programme. A detailed technical report covering the ground geophysics programme and the priority drill targets is under preparation.
In addition, measures are being undertaken to implement the necessary environmental survey work prior to drilling, and liaison with drilling contractors to ensure, subject to environmental approvals, that the appropriate drilling contractors are in place.
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.
28 August 2019