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(Alliance News) - Kavango Resources PLC on Wednesday said it has raised GBP358,500 by issuing shares and convertible loan notes.
The stock was trading 5.9% lower at 0.80 pence each at Wednesday midday in London.
The mining exploration firm said it raised GBP218,000 through the placing of 27.3 million shares at 0.8p each and the issue of GBP102,500 of 10% convertible loan notes. Power Metal Resources PLC also subscribed for GBP38,000 of zero coupon convertible loan notes.
Following admission of the placing shares, Kavango will have 188.2 million shares in issue.
Kavango also said it has sold a 51% stake in the Ditau project in Botswana to Power Metal Resources PLC for GBP150,000. Power Metal said the amount will be paid through the issue of 35.7 million shares at 0.42 each.
In September, Kavango said it found evidence of possible rare earth elements at Ditau. On Wednesday, Power Metal stated that ten geophysical "ring structures" were identified at Ditau, including one 7 kilometere by 5 kilometre magnetic anomaly, potentially related to carbonatite magmatism.
Carbonatite magmatism is the primary source of niobium and rare earth elements
Under the agreement, Power Metal will become operator of Ditau and will confirm a new project work programme after completion of the acquisition.
"Power Metal is building a portfolio of potentially exciting opportunities, with the conditional acquisition of the Ditau Project offering a great deal of promise. The team has a strong connection with research leaders in the area of carbonatite geology, and we believe that know-how, when applied to the extensive information gathered by Kavango to date, will make a significant difference. Not only can we help augment the forward direction for the Ditau project, but also open up new commercial avenues for a more rapid project advancement," said Power Metal Chief Executive Paul Johnson.
Power Metal noted that since Johnson holds 5.1 million shares in Kavango Resources - representing a 2.7% stake in Kavango post acquisition completion - he did not submit a vote on the acquisition.
Power Metal stock was trading 31% higher at 0.28p each at Wednesday midday in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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