Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide an exploration update in respect of the Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key” or “KKME”) Molopo Farms Complex Project (the “Project” or “MFC Project”), which is targeting prospective massive nickel sulphide mineralisation in Botswana.
POW has an 18.26% shareholding in Kalahari Key and has elected to earn in (“Earn-In”) to a 40% direct interest in the MFC Project by expending US$500,000 on exploration expenditure, notably target drilling, in 2020. On completion of the Earn-In, POW will have an effective economic interest of 50.96% in the MFC Project.
Geophysics and 3D modelling identifies eight compelling drill targets:
Paul Johnson, Chief Executive Officer of Power Metal Resources PLC, commented:
“Back in May 2019 when POW entered the transaction the expectation of the Kalahari Key team was to identify 2 or 3 key targets from the ground geophysics work. Instead we now have 8 high profile drill targets which is a considerable uplift.
Kalahari Key have always stated their main strategic objective was to target nickel-PGM-bearing massive sulphide deposits similar to the Voisey’s Bay nickel deposit. As POW’s key strategic objective is to make a large scale metal discovery our interests are aligned and now we find ourselves in an interesting position.
POW has elected to Earn-In to the MFC Project and we have the cash at bank to cover the cost of that Earn-in. The EMP has been submitted in Botswana and we await the clearance to undertake the drill programme.
For our shareholders, I believe we are perfectly poised. Subject to local approvals we have the high profile drill targets, and the cash at bank to instigate a drill programme asap. Local liaison with drill contractors continues and measures are being implemented that will allow commencement of drilling at the earliest opportunity.
As I have stated before high impact exploration drilling carries a high risk of failure, in that we may not find the mineralised structures we seek. However an economic large scale nickel sulphide deposit discovery would be transformational, highly valuable and particularly sought after. Therefore, for the MFC project, I believe the risk-reward balance is highly favourable.
I look forward to providing our shareholders with further updates regarding the MFC project, its potential and our approach to its development in the coming weeks and months.”
The TDEM survey was conducted on 11 targets identified by the AEM survey located over the ENE-WSW striking Jwaneng-Makopong Feeder/Shear Zone through the centre of the Molopo Farms Complex (MFCFZ).
The targets were covered with TDEM traverses using a highly sensitive SQUID (Super Conducting Quantum Interference Device) sensor and ultra-powerful HPTX transmitter.
The TDEM transmitter loops were located based on the respective target spatial orientation as determined/estimated from the AEM data interpretation. The locations of the loops were also influenced by the presence of formational conductors as indicated by the AEM.
North-south traverses were surveyed through (and in some case, to the east or west of) the loops at 200 m line spacing and 50 m or 100 m station spacing.
The nominal parameters employed for the full duration of the survey were:
The data was modelled and interpreted using a combination of plate modelling and 3D inversion techniques with a combined plot of the recommended borehole parameters for each target and the decay analysis of each targeted anomaly reported.
Nine targets were surveyed over Block 1 and two over Block 2 of the original AEM survey area. The responses of three of the targets over Block 1 and one of the targets over Block 2 were found to be dominated by IP effects, i.e. the recorded responses cannot be due to massive sulphides. No or limited quantitative interpretation was done on these data sets.
Seven of the selected targets in Block 1 and two in Block 2, were quantitively analysed using plate models and/or 3D compact body inversion. The analysis confirmed the presence of at least six discreet, highly conductive bodies at depth – five in Block 1 and one in Block 2.
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 originally consisted of three licenses in covering an area of 2,725 square kilometres that are considered prospective for Nickel-Copper-PGMs mineralisation and 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.
Licences PL310/2016 and PL311/2016 were due for renewal in late 2019 and renewal applications were submitted including evidence of work undertaken and associated costings in excess of the minimum stipulations for maintaining the licences and seeking renewal. We understand that renewals have been granted, with the usual provision of circa 50% land area relinquishment. The exploration work undertaken has proved extremely useful in identifying the ground hosting the potential mineralisation and the remaining areas held under the renewal applications contains the key potentially mineralised structures. A further update to the market will be provided when formal renewed licence documentation has been received.
Power Metal Resources Interest in Kalahari Key and The MFC Project
Power Metal Resources has an 18.26% shareholding in Kalahari Key and on 31 December 2019 elected 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”).
Following completion of the 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:
Further Information on the POW Project Level 40% Earn-In to the MFC Project
On 31 December 2019 POW elected 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 an MFC Project operational committee (the "Committee") has been 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, following POW electing to Earn-In, Paul Johnson (POW Director) has now joined the Board of Kalahari Key.
Also, now POW has elected to 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.
Competent Person's Statement
The technical information contained in this disclosure has been read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules - Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.
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.
5 February 2020