(Alliance News) - Power Metal Resources PLC on Monday said it sold its entire holding of 69.5 million shares in Kavango Resources PLC, but stressed that this "does not reflect any negative view" of the company.
Kavango is a metals exploration company with assets in Botswana and Zimbabwe, while Power Metal is focused on North America, Africa and Australia.
On Friday, Kavango's Chief Executive Officer Ben Turney purchased 6.3 million shares for 0.8 pence each for GBP50,000 in total. At the same time, Non-Executive Director Peter Bee acquired 63.3 million shares for the same price, totalling GBP506,000.
On Monday afternoon in London, Kavango shares were up 6.3% at 0.85p each. Power Metal shares were down 2.4% at 0.61p.
Power Metal raised GBP556,000 in cash for this disposal of its shares in Kavango to bolster its cash reserves and fund its "high impact exploration initiatives".
Power Metal said it has retained 60.0 million warrants to subscribe for new shares in Kavango, which will expire on January 8, 2025. Of these, 30.0 million have an exercise price of 4.25p each while the other 30.0 million are priced at 5.5p each. It also holds a 1% net smelter return royalty respecting the project licence footprint in the Kalahari Copper Belt and the Ditau Camp projects it and Kavango previously held in joint venture.
Chief Executive Officer Sean Wade reassured investors: "Whilst we would describe our holding in Kavango as non-core our disposal does not reflect any negative view of their business or their ambitions and we wish them well in their endeavours.
"Our priority however is deploying financial resources into Power Metal core projects whilst also streamlining the diverse interests of the company and demonstrating our ability to raise cash for operations through means other than equity financings which dilute investor holdings."
Wade continued: "The funds raised will add to our significant existing cash balances and will be utilised for accelerated exploration, including drilling of certain high impact retained exploration projects targeting large-scale metal discoveries."
By Emma Curzon, Alliance News reporter
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Kavango Resources (KAV)
Power Metal (POW)