Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce a further cash investment into Kalahari Key Mineral Exploration (Pty) Limited (“Kalahari Key”).
Kalahari Key currently holds 100% of the Molopo Farms Complex project (“MFC Project”) which is targeting prospective massive nickel sulphide and platinum-group metal (“PGM”) mineralisation in Botswana.
Power Metal is currently earning into a 40% direct project interest in the MFC Project (the “Earn-in”) by funding US$500,000 of exploration expenditure in 2020, notably the diamond drilling of selected targets. For clarity, the US$500,000 cost is fully funded and covered by Power Metal existing cash resources.
In addition to the Earn-in, Power Metal has a current 18.26% shareholding in Kalahari Key.
Kalahari Key has undertaken a rights issue to raise money from existing shareholders (the “Rights Issue”). Power Metal has given notice to Kalahari Key that it will take up its rights to maintain, as a minimum, its 18.26% holding in Kalahari Key(1).
(1) Power Metal’s percentage holding in Kalahari Key after their Rights Issue will depend on the take up of rights by other Kalahari Key shareholders, but will be 18.26% as a minimum.
The Rights Issue was undertaken at US$55 per ordinary share in Kalahari Key and Power Metal has subscribed for 1,771 Kalahari Key shares for a cash cost of US$97,405. The cost of this participation is fully funded from existing Power Metal cash resources.
Assuming a Power Metal holding in Kalahari Key post Rights Issue of 18.26%, upon completion of the Earn-in, Power Metal will have an effective economic interest of 50.96% in the MFC.
Paul Johnson Chief Executive Officer of Power Metal Resources commented:
“With the drill programme under way in Botswana, and the geology identified from that programme to date in line with expectations, at Power Metal we are increasingly excited by the MFC Project and its potential for a company transformational discovery.
The work over recent years has identified multiple large-scale targets and it is clear the MFC Project offers district scale potential should the drill programme identify the targeted nickel sulphide and PGM mineralisation.
Therefore, it was clear that Power Metal should participate in the modest financing undertaken through the Rights Issue by Kalahari Key and the amount expended of US$97,405 (circa £75,250) is comfortably afforded from existing Power Metal working capital of approximately £1,700,000 (comprising cash and listed investments only).
This investment in one of our key projects, alongside other initiatives announced recently, are possible because of the strong financial position of Power Metal, aided recently by the incoming cash from the exercise of warrants.
As warrant exercise monies are received by Power Metal they bolster underlying working capital, but notably enable us to innovate and do more. This is a pattern of business growth and advancement we intend to continue.”
29 October 2020