Last checked at 11 Aug 2020 07:00
11 August 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.
Power Metal 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 US$500,000 on exploration expenditure, notably target drilling, in 2020. On completion of the Earn-In, Power Metal will have an effective economic interest of 50.96% in the MFC Project.
Paul Johnson, Chief Executive Officer of Power Metal Resources PLC, commented:
"KKME continue to make progress toward the objective of drilling major nickel sulphide targets in Botswana. The team at KKME are continuing to work with the Botswana authorities to secure approval of the Environmental Management Plan, which is the final regulatory step before launch of the drill programme.
As with many nations, Botswana has been managing the impact of Covid-19 and has taken a number of robust steps in this regard. We are optimistic with the measures taken and subject to regulatory approvals, the Molopo Farms Complex drill programme can commence in the near term.
As a result, we are making final preparations in drill programme planning, and further refining the drill targets through the launch of the Audio Magneto-tellurics survey ("AMT") described below. We have also now established a dedicated US Dollar account covering the US$500,000 earn-in expenditure for the drilling programme.
To be clear the US$500,000 cost is fully covered by the existing financial resources of Power Metal. As at today's date the cash and listed investments held by the Company amounted to £1.65million or circa US$2.15million.
Implementation of the planned drill programme will be a significant event for Power Metal and KKME, as we will be targeting nickel sulphide targets of considerable scale. We are therefore switched and honing our focus on high impact project drilling."
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.
DEVELOPMENTS:
OPERATIONAL ELEMENT | UPDATE |
MFC Project Drill Targeting | Project targets remain in four target groups as follows: Chipo - Northern Targets Tshepo - Central Targets Galaletsang - Southern Targets Tshenolo - Western Magnetic Targets Initial drilling remains focused 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). The drill programme will target prospective massive nickel sulphide mineralisation. |
MFC Project Drill Budget | In recognition of the planned drill programme and imminent need to cover operational costs in this regard, Power Metal has transferred US$500,000 to a dedicated US Dollar account ready to make payments for drill programme related costs. |
Audio Magneto-tellurics Survey | KKME has commenced AMT ground geophysical investigations on four of its targets for massive nickel sulphide mineralisation in the Molopo Farms Complex of south-east Botswana. The AMT survey will provide a clearer 3D shape to the four targets being investigated and allows for further refining of the drill targets as KKME leads up to the drilling programme. The AMT survey is being undertaken by Spectral Geophysics of Gaborone, Botswana. As part of KKME's commitment to supporting local scientists, a PhD student from Botswana's University of Science and Technology (BUIST) will participate in the AMT fieldwork under the supervision of our geophysical consultant, Cas Lötter. |
Impact of Covid-19 on Botswana Operations | The impact of Covid-19 on Botswana and operations in country is being monitored on an ongoing basis. All activities conducted in country will follow the guidelines and requirements of the local authorities and with full regard for the safety of local communities and operational team members. |
Environmental Management Plan ("EMP") | Following submission of the EMP feedback was received from the Department of Environmental Affairs ("DEA"), Botswana and the EMP was updated as required and resubmitted in Q2 2020. Feedback from the DEA is awaited. |
Review of New Project Opportunities | Given the extremely positive findings from ongoing work KKME have decided to focus their operational activities entirely on the planned drill programme at the Molopo Farms Complex. |
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 was received from the DEA and the EMP updated as required and resubmitted in Q2 2020. Further feedback is waited from the DEA.
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.
KKME is undertaking an AMT survey to further refine the four key drill targets in the final run up to implementing the drill programme.
In addition, final preparations are now being implemented to ensure, on receipt of EMP approval, that KKME is in a position to mobilise and launch the drill programme as soon as possible.
Liaison with drilling contractors has continued in 2020, including with 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. A final decision on the specific contractor will be made shortly after receipt of the EMP approval.
There is continuing interest in the MFC Project from third parties and KKME is maintaining liaison with external organisations in this regard.
Power Metal Interest in Kalahari Key and the MFC Project
Power Metal 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 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 Power Metal Project Level 40% Earn-In to the MFC Project
On 31 December 2019 Power Metal 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 Power Metal entering into the Earn-In an MFC Project operational committee (the "Committee") was established comprising members Roger Key (Kalahari Key Director), Andrew Bell (Power Metal 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 Power Metal 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 Power Metal electing to Earn-In, Paul Johnson (Power Metal Director) joined the Board of Kalahari Key.
Also, now Power Metal 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.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O'Reilly (MSc, DIC, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules - Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.
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/Charlie Bouverat | +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 seeking a large scale metal discovery.
The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company's position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.