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(Sharecast News) - Africa-focussed metals exploration and development company Power Metal Resources updated the market on progress achieved by Kalahari Key Mineral Exploration at the Molopo Farms Complex project in Botswana on Tuesday, where the targets are believed to be highly prospective for massive nickel sulphides.
The AIM-traded firm has an 18.26% shareholding in Kalahari Key, and also has a right by 31 December to elect to earn into a 40% direct project interest in the Molopo Farms Complex project by investing $0.5m in the project by 31 December 2020.
It said a helicopter-borne electromagnetic survey over the feeder zone project area completed in the second quarter identified 17 sub-surface conductor targets, with follow-up ground electromagnetic surveys over 14 of the targets producing at least six high priority targets of "considerable" size and scale, for which eight drill holes had been designed to penetrate all targets.
The targets were described as highly conductive bodies, which could potentially be host to massive nickel sulphides due to the spatial location, particular geological setting and associated magnetic response.
Further work was undertaken to select the top priority targets, and the board said five had now been selected as a focus for the initial drilling programme.
Kalahari Key had appointed consultants Wellfields Consulting Services in Gaborone, Botswana to complete a pre-drilling environmental management plan, and fieldwork in respect of that plan had now been completed with Kalahari Key said to be awaiting receipt of the report.
Power Metal Resources aid Kalahari Key was also set to shortly implement gravity surveys over five drill targets, to eliminate "as far as possible" any chance that the targets were graphite rather than sulphide bodies, since the former - although conductive - would not be of interest.
It added that was considered unlikely given the geological setting.
Further liaison with drilling contractors was also underway, including some which had expressed a willingness to consider equity in lieu of cash for a portion of their drilling costs for the initial programme.
Power Metal Resources said there was interest in the Molopo Farms Complex project from third parties, with Kalahari Key said to be "maintaining liaison" with external organisations.
Given the potential valuation uplift on a positive initial drill results, the preference at the current stage would be to undertake the initial drilling programme before formalising any agreement with a third party for project or company disposal, farm-in or joint venture, the board explained.
However, it did confirm that all options "remain open to discussion", subject to appropriate commercial terms.
"Kalahari Key are rapidly advancing in Botswana to a position where they can drill the high priority targets," said Power Metal Resources chief executive officer Paul Johnson.
"The initial programme will cover 5 very strong conductor targets and will optimise the chance of making a discovery.
"Nickel stocks at the LME continue to fall dramatically, and we believe that the price of nickel will appreciate accordingly."
As such, Johnson said partially positioning Power Metal Resources in the nickel exploration space was deliberate, to expose shareholders to the upside that came within the nickel sector during times of positive supply and demand dynamics.
"We continue to focus on delivery and progress across our projects and anticipate a number of updates across our company in the coming weeks."
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