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(Alliance News) - Power Metal Resources PLC on Thursday said it could hike its stake in the Haneti nickel project in Tanzania if it makes a GBP25,000 cash payment to London-listed peer Katoro Gold PLC.
Power Metal currently has a 25% stake in the project, and Katoro Gold holds the remaining 75% interest.
The exploration and development company, however, said it could boost its holding in the asset to 35%, should it make a GBP25,000 payment to Katoro by mid-May 2020.
Power Metal holds 10.0 million Katoro shares, representing 5.9% stake, and also has 10.0 warrants exercisable at 1.25 pence each. The firm explained that 2.5 million warrants expire in March 2022, the remaining 7.5 million expire in May 2022.
Katoro on Wednesday said it had raised GBP100,000 through a share placing to raise new working capital funds.
Power Metal Chief Executive Paul Johnson said: "Katoro have announced a fundraising to advance the Haneti project in Tanzania and for general working capital requirements.
"We are working closely with the Katoro team to review the full extent of the Haneti project's potential which is rightly focused on large scale nickel sulphide targets, however recent work has also identified significant potential for platinum group metals (notably Palladium), gold, copper, lithium and rare earth elements."
Shares in Power Metal Resources were 5.3% higher at 0.50p each and Katoro's stock surged by 11% at 1.00p apiece.
By Eric Cunha; ericcunha@alliancenews.com
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