Last checked at 20 Apr 2020 07:00
20 April 2020
Power Metal Resources PLC
("Power Metal" or the "Company")
Botswana Molopo Farms Complex - Progress Update
Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide an update in respect of the Kalahari Key Mineral Exploration Pty Ltd ("Kalahari Key" or "KKME") Molopo Farms Complex Project (the "Project" or "MFC Project"), which is targeting prospective massive nickel sulphide mineralisation in Botswana.
POW has an 18.26% shareholding in Kalahari Key and has elected to earn in ("Earn-In") to a 40% direct interest in the MFC Project by expending $500,000 on exploration expenditure, notably target drilling, in 2020. On completion of the Earn-In, POW will have an effective economic interest of 50.96% in the MFC Project.
BACKGROUND:
A helicopter-borne electromagnetic survey, followed by ground geophysics, and subsequent desktop review, has to-date identified a total of eight targets prospective for nickel - platinum group metals ("PGMs"). Four high profile drill targets have been selected for drilling, with eight drill holes designed to test these targets.
This RNS covers various operational developments in the build up to drilling of the MFC Project.
DEVELOPMENTS:
OPERATIONAL ELEMENT | UPDATE |
MFC Project Target Structuring | Recognising the scale of the MFC Project and notably the larger than expected number of high-profile targets identified from ground geophysics, the Project targets have now been allocated to target groups as follows: Chipo - Northern Targets Tshepo - Central Targets Galaletsang - Southern Targets Tshenolo - Western Magnetic Targets |
MFC Project Drill Targeting | Initial drilling is expected to focus on the Chipo target group in the Northern area of the MFC Project where the decay constant from ground geophysics (up to 530 milliseconds for certain MFC Project targets) reaches or exceeds the high levels associated with other massive sulphide discoveries in the region (including above 250 milliseconds in eastern Botswana). Subject to approval of the Environmental Management Plan (see below) and a fuller understanding of the impact of the COVID-19 pandemic on Botswana, Kalahari Key will formulate a drilling timetable in due course and POW are working with Kalahari Key in this regard. |
Gravity Surveys | Gravity surveys undertaken over principal targets have been successful demonstrating that the selected conductor targets for drilling are associated with gravity highs usually associated with massive nickel sulphide bodies. |
Licence Renewals | Two MFC Project licences, PL310/2016 and PL311/2016, have been successfully renewed for a two-year period with formal renewal documentation now received from the Department of Mines, Botswana. |
Impact of Covid-19 on Botswana Operations | In response to the Covid-19 pandemic Botswana is now in a 28-day lockdown to the end of April 2020 which includes local day to day restrictions and also travel restrictions in and out of country. The Kalahari Key team are utilising the lockdown period to review all available geological and geophysical data to further refine exploration and drilling plans in respect of the MFC Project and to support liaison with third parties who have expressed an interest in the Project. |
Environmental Management Plan ("EMP") | Following submission of the EMP feedback has been received from the Department of Environmental Affairs ("DEA"), Botswana and the EMP has been updated as required. The updated EMP is to be delivered to the DEA on cessation of the Covid-19 lockdown. |
Review of New Project Opportunities | Given the additional time available during the lockdown the Kalahari Key team are reviewing a number of additional opportunities in Botswana to complement the MFC Project interest. |
Paul Johnson, Chief Executive Officer of Power Metal Resources PLC, commented:
"The scale of potential prospectivity at the MFC project was demonstrated by the large number of Nickel-PGM targets identified during ground geophysics and this has now led to a clustering of targets into four groups. The MFC project is increasingly attractive and we look forward to the pursuit of ground exploration, notably high-profile target drilling.
POW notes the positive approach taken by Kalahari Key during the period of Covid-19 lockdown in the UK and Botswana, and the determination to use this opportunity to advance their knowledge of the MFC Project and to assess additional project opportunities.
We are also grateful to the Botswana authorities for their support and engagement, once again demonstrating that Botswana is a robust and supportive operating environment for exploration companies.
In the currently fast changing environment further updates will be provided in respect of Kalahari Key and the MFC Project, as appropriate."
Kalahari Key and MFC Project Background
Kalahari Key Mineral Exploration Company (Pty) Ltd, registered in Botswana, is a mineral exploration and geological consultancy company.
The MFC Project originally consisted of three licenses in covering an area of 2,725 square kilometres that are considered prospective for Nickel-Copper-PGMs mineralisation and 100% owned by Kalahari Key.
In November 2016 the company acquired two mineral exploration licences (PL310/2016 and PL311/2016) from the Botswana Government. The licences cover the eastern and central parts of a shear/feeder zone through the centre of the Bushveld-related Molopo Farms Complex in southern Botswana. A third licence (PL202/2018) was acquired in early 2018 immediately to the south of PL311/2016.
Licences PL310/2016 and PL311/2016 were due for renewal in late 2019 and renewal applications were submitted including evidence of work undertaken and associated costings in excess of the minimum stipulations for maintaining the licences and seeking renewal. Renewals have been granted, with the usual provision of circa 50% land area relinquishment.
The exploration work undertaken to date has proved extremely useful in identifying the ground hosting the potential mineralisation and the remaining areas held under the renewal applications contains the key potentially mineralised structures.
A helicopter-borne electro-magnetic ("EM") survey over the Molopo Farms Feeder Zone project area completed in Q2 2019 identified 17 sub-surface conductor targets and follow up ground EM surveys over 14 of the targets produced eight priority targets of considerable size and scale. Four high-priority targets will be subject to initial drilling for which 8 drill holes have been designed to penetrate all targets.
The targets are highly conductive bodies which could potentially be host to massive nickel sulphides due to the spatial location, particular geological setting and associated magnetic response.
KKME appointed consultants Wellfields Consulting Services in Gaborone, Botswana to complete a pre-drilling Environmental Management Plan ("EMP") and the EMP was submitted to the DEA In Q4 2019. Feedback has been received from the DEA and the EMP updated as required, with the updated report ready for re-submission (upon ending of the Covid-19 lockdown).
KKME implemented gravity surveys over the key drill targets, to eliminate as far as possible any chance that the targets are graphite rather than sulphide bodies, since the former although conductive would not be of interest, although this is considered unlikely given the geological setting. This work was successfully completed and the final gravity survey report confirms that all targets remain valid.
Further liaison with drilling contractors is underway, including some who have expressed a willingness to consider equity in lieu of cash for a portion of their drilling costs in respect of the initial programme.
There is interest in the MFC Project from third parties and KKME are maintaining liaison with external organisations.
Power Metal Resources Interest in Kalahari Key and The MFC Project
Power Metal Resources has an 18.26% shareholding in Kalahari Key and on 31 December 2019 elected to earn into a 40% direct project interest in the MFC project by investing US$500,000 in the Project by 31 December 2020 (the "Earn-in").
Following completion of the Earn In, Power Metal Resources will hold an effective economic interest of 50.96% in the Project.
The Company's Kalahari Key acquisition agreement was announced on 13 May 2019 and readers can review this announcement through the following link:
https://www.powermetalresources.com/n/n104/acquisition-and-earn-in-agreement-botswana-project
Further Information on the POW Project Level 40% Earn-In to the MFC Project
On 31 December 2019 POW elected to earn-in to 40% of the MFC Project by entering into and then fulfilling a commitment to spend US$500,000 ("Committed Spend") during the period to 31 December 2020.
Upon POW entering into the Earn-in an MFC Project operational committee (the "Committee") was established comprising members Roger Key (Kalahari Key Director), Andrew Bell (POW Director) and Andrew Moore (Kalahari Key Director). The Committee will determine the allocation of the Committed Spend and management of operational activities. Upon completion of the Earn-in expenditure requirement POW will hold 40% of the MFC Project.
The Committed Spend will be applied primarily to the completion of drilling of four targets at the MFC Project.
Also, following POW electing to Earn-in, Paul Johnson (POW Director) joined the Board of Kalahari Key.
Also, now POW has elected to Earn-in, a Joint Venture Agreement ("JVA") is being established between the parties which will determine strategy, operational management and corporate structuring. This will include the usual fund or dilute provisions unless an alternate structure is agreed by the parties.
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.
For further information please visit https://www.powermetalresources.com/ or contact:
Power Metal Resources plc | |
Paul Johnson (Chief Executive Officer) | +44 (0) 7766 465 617 |
SP Angel Corporate Finance (Nomad and Joint Broker) | |
Ewan Leggat | +44 (0) 20 3470 0470 |
SI Capital Limited (Joint Broker) | |
Nick Emerson | +44 (0) 1483 413 500 |
First Equity Limited (Joint Broker) | |
David Cockbill/Jason Robertson | +44 (0) 20 7330 1883 |
Notes to Editors:
Power Metal Resources plc (LON:POW) is an AIM listed metals exploration and development company exploring for the key metals used in power generation, transmission, storage and utilisation. The Board and team of advisors, who have proven expertise in exploration, mining and project generation, have identified an opportunity to utilise the Company's position to become a leader in the London market for investors to gain exposure to the power metal commodity suite, particularly cobalt, lithium, copper and nickel.