ABM.L Share News (ABM)

(Sharecast News) - African Battery Metals has acquired an interest in Katoro Gold, and entered into an option agreement with Katoro to acquire an interest in the Haneti Nickel Project in Tanzania, it announced on Friday.The AIM-traded firm said that under the agreement, it would be able to acquire up to 10 million new ordinary shares in Katoro, together with up to 10 million warrants over ordinary shares, and an option to acquire - subject to the completion of due diligence - up to a 35% interest in Katoro's 100%-owned Haneti Nickel Project in Tanzania, for a total consideration of up to £0.125m.It said the Haneti project comprised tenements covering an area of around 5,000 square kilometres of prospecting licences, offers and applications, which were prospective for nickel, platinum-group-elements, cobalt, copper, gold and lithium.Katoro also held a 100% interest in the Imweru and Lubando gold projects in Tanzania, which in total hosted a JORC-compliant gold resource of 754,980 ounces of gold/For a consideration of £25,000, African Battery Metals would acquire 2,500,000 new ordinary shares, equating to an issue price of 1p each/The company said it would also be granted 2,500,000 warrants to subscribe for 2,500,000 new ordinary shares at a price of 1.25p per share, with a three-year expiry term from Friday.Under the agreement, African Battery Metals was also granted the option, for a period of 60 days, in which to undertake due diligence on Katoro and its projects, in particular Haneti.If it exercised the option, it said it would invest a further £75,000 to acquire an additional 7,500,000 new Ordinary Shares at a price of 1p per share.On exercise of the option, African Battery Metals would also be granted a further 7,500,000 warrants to subscribe for 7,500,000 new ordinary shares at a price of 1.25p each, with a three-year expiry term from the date of exercise/Also on exercise of the option, the company said it would acquire a 25% interest in Katori's wholly-owned subsidiary, Kibo Nickel, which, through its wholly-owned subsidiary Eagle Exploration, held a 100% interest in Haneti.Following the option exercise, Katoro would retain a 75% interest in Kibo Nickel.Following that, African Battery Metals would be required to fund its 25% share of Haneti costs, or would dilute in accordance with standard industry fund-or-dilute provisions.In the event the option was exercised, African Battery Metals said it would have the right, for 12 months after exercise, to acquire a further 10% interest in Kibo Nickel for a further payment to Katoro of £25,000 in cash."I am delighted to announce the acquisition of an interest in Katoro Gold and the option agreement enabling us to increase our holding in Katoro and also secure a strategic stake in the Haneti Nickel Project," said African Battery Metals executive director Paul Johnson."The agreement announced today complements our existing interests and provides a degree of diversification whilst remaining focused on Africa and battery metal projects."Johnson said alongside the company's existing copper and cobalt interests, the addition of nickel into ots portfolio exposed shareholders to another "strategically significant" metal, where the board believed the forward supply and demand dynamics were looking attractive."We are looking to work with Katoro on an accelerated exploration programme at Haneti to build on the knowledge that Katoro, and previous owner Kibo Mining, gathered."This includes data demonstrating 13.59% nickel in sampling of outcrops."We look forward to reporting back on developments in respect of this strategic transaction in the near future."