TIDMPOW
RNS Number : 8103X
Power Metal Resources PLC
06 May 2021
06 May 2021
Power Metal Resources PLC
("Power Metal" or the "Company")
Option Agreement - Botswana Gold-Nickel Properties
Company has Signed an Option Agreement to Acquire a 100%
Interest in Two Gold - Nickel Prospecting Licences in the Tati
Greenstone Belt, Botswana, with a down payment on drilling
Power Metal Resources PLC (LON:POW) the AIM listed metals
exploration and development company is pleased to announce it has
secured an option (the "Option") to acquire two prospecting
licences ("PLs") prospective for gold and nickel and located upon
the Tati Greenstone Belt, Botswana.
The Option allows for a 60 business day due diligence period,
and should Power Metal exercise the Option, it will undertake the
licence acquisitions through its newly formed 100% owned subsidiary
Power Metal Resources Botswana (Pty) Limited ("Power Metal
Botswana").
Paul Johnson, Chief Executive Officer of Power Metal Resources,
commented:
"We recently formed Power Metal Botswana to provide a holding
company for new acquisitions in Botswana and I am pleased to
announce this first transaction. Subject to due diligence, this
acquisition would give the Company exposure to a new strategic
project in the heart of the Tati Greenstone Belt, an under explored
area which we believe holds considerable potential for new gold and
nickel discoveries.
This announcement further confirms the Company's commitment to
expanding our operational interests in Botswana, which is a first
class destination for responsible exploration companies. Uniquely,
the transaction incorporates an Option fee that is convertible into
a down payment against project drilling in Botswana.
I look forward to providing further information as our due
diligence work progresses."
Vendor and Prospecting Licence Information
Vital Commodities Pty Ltd, a company registered and Incorporated
in Botswana ("VC") VC is a private Botswana company that owns two
prospecting licences in Botswana, (the "Vendors"). VC is 100% owned
by Equity Drilling Limited, a company registered and incorporated
in Guernsey.
The PLs owned by the Vendors and the subject of this transaction
are as follows:
PL127/2019
PL127/2019 is located near the southern extent of the
north-northwest striking Tati Greenstone Belt, roughly 40km
southwest of Francistown, Botswana, and less than 7km from the
Mupane underground gold mine.
PL127/2019 covers a total area of 89km(2) and is prospective for
orogenic gold and intrusive magmatic nickel mineralisation.
Several untested kilometre-scale Arsenic ('As')- and Gold
('Au')-in-soil anomalies extend onto PL127/2019 from the northeast
and southeast.
The licence is also believed to cover the southern extent of
prolific gabbroic-troctolitic intrusions which host the Phoenix,
Selkirk and Tekwane Ni-Cu-PGE rich deposits located along the
periphery of the Tati Greenstone Belt less than 7km from the
licence. The magmatic Ni-Cu-PGE potential the licence possesses has
been generally overlooked by previous operators.
PL126/2019
PL126/2019 is located near the northern extent of the Tati
Greenstone Belt, less than 10km southeast of Francistown and is
adjacent to the Golden Eagle deposit (Shashe Mining Licence).
PL126/2019 covers a total area of 35km(2) and is prospective for
orogenic gold mineralisation. The licence hosts several untested
arsenic and gold in-soil anomalies as well as a large historic mine
dump which has received little known follow up or modern
exploration.
Tati-Greenstone Belt Information
The Tati Greenstone Belt ("TGB") is located in the vicinity of
Francistown, adjacent to the Zimbabwe border, in north-eastern
Botswana. With a total strike length of 65km and up to 20km in
width the TGB hosts a large number of orogenic style gold deposits
and several economically significant intrusive magmatic
Nickel-Copper-Platinum Group Elements ("Ni-Cu-PGE") rich sulphide
deposits.
A gold rush started at Tati in 1867 leading to the establishment
of Francistown and over 70 reported small scale gold mining
operations.
The TGB is Botswana's only gold producing region with the Mupane
gold mine (held by Galane Gold Ltd) being the country's only major
gold producer. Mupane was formerly an open-pit operation and is now
an underground mine. It is located in the southern part of the
TGB.
The known nickel deposits on the greenstone belt consist almost
entirely of disseminated to semi massive sulphide bodies hosted by
a series of late stage gabbroic-troctolitic intrusive bodies.
Significant nickel operations which operated until 2016, included
the former Tati Nickel Mining's Selkirk underground mine which
commenced production in 1989 and the Phoenix open pit which started
in in 1995. Both deposits are located in the south-central portion
of the TGB.
Geologically the TGB is part of the Francistown Arc Complex
within the southern margin of the Archean age Zimbabwe Craton in
the northern contact zone of the Limpopo Belt. The principal
lithologies of the TGB are lower greenschist to lower amphibolite
facies volcanic and sedimentary rocks, constrained by three
fault-bounded volcano-plutonic sequences which are intruded by
granitoids.
Whilst there is a long history of small scale gold mining on the
TGB, the Company believe it to be underexplored by modern standards
and systematic exploration focussing on areas with sand cover and
geophysics targeting greater depths, are likely to yield further
gold and nickel discoveries.
Option Agreement Information
The Option:
- Power Metal has signed an option agreement to acquire a 100%
interest in PL 126/2019 and PL 127/2019, being two granted
prospecting licences in Botswana within the Tati Greenstone Belt
and held by the Vendors.
- The Option provides a 60 business-day period, during which
Power Metal may undertake due diligence and notify the Vendors of
Option exercise to acquire 100% of P L 126/2019 and PL 127/2019
from the owner of the said prospecting licences.
- The Option fee is to be satisfied through a cash payment of
GBP50,000 to the Vendors. The full amount of GBP50,000 paid may be
credited and offset from the cost of the drilling u ndertaken by
Equity Drilling Limited (100% owner of VC) at the two PLs which are
the subject of this Option or at other Power Metal interests in
Botswana. The payment will be made using existing Power Metal cash
resources.
Upon Option Exercise:
- VC will subject, to local authority approvals, arrange
immediate transfer PL 126/2019 and PL 127/2019 into Power Metal
Botswana.
- The consideration items outlined below, following Option
exercise, will not become due and payable until the necessary local
authority approvals for the transfer to Power Metal Botswana have
been received and the transfer completed.
- Should Power Metal at its sole volition exercise the Option
for the acquisition of PL 126/2019 and PL 127/2019, the Company
will pay an initial consideration of GBP25,000, payable through the
issue to the Vendors of 833,333 new ordinary Shares of 0.1p each in
the Company ("New Ordinary Shares") at an issue price of 3.0 pence
per New Ordinary Share ("Initial Exercise Shares").
- Thereafter should Power Metal elect to proceed with the year 3
exploration spend programme (for the year ending 30 September 2022)
it will pay a further consideration of GBP50,000, payable to the
Vendors through the issue of 833,333 New Ordinary Shares at an
issue price of 3.0p each for each licence where such spending is
confirmed, thereby if both confirmed then 1,666,666 New Ordinary
Shares would be issued (the "Further Exercise Shares").
- In addition, Power Metal will pay a single further
consideration payment of GBP100,000 through the issue the Vendors
of 3,333,333 New Ordinary Shares at an issue price of 3.0p ("Final
Exercise Shares") if either of the two following conditions are
met:
- (1) Confirmation of a 250,000 oz JORC (2012) compliant gold
Mineral Resource across the two prospecting licences
- (2) Confirmation of a 5,000,000 tonne economic nickel deposit at a grade of >1.5% nickel.
- Additionally, the Company shall issue to VC 5,833,332 warrants
(the "Vendor Warrants") in two separate tranches of 2,916,666
warrants each:
o 2,916,666 Vendor Warrants shall be issued to acquire New
Ordinary Shares at an exercise price of 5p per share, exercisable
over a 2-year period from today's date and which are only
exercisable on completion of drilling against which the GBP50,000
offset payment has been made and successful transfer of PLs
126/2019 and 127/2019 to Power Metal Botswana (the "5p Vendor
Warrants"). The 5p Vendor Warrants shall be subject to a 5-day VWAP
accelerator, by which should Power Metal shares trade above 10p for
5 trading days then the Company shall have the right to serve
notice on VC that it must exercise and pay for the exercised 5p
Vendor Warrants within 14 calendar days or the 5p Vendor Warrants
shall be cancelled.
o 2,916,666 Vendor Warrants shall be issued to acquire New
Ordinary Shares at an exercise price of 7.5p per share, exercisable
over a 2-year period from today's date and which are only
exercisable on completion of drilling against which the GBP50,000
offset payment has been made and successful transfer of PLs
126/2019 and 127/2019 to Power Metal Botswana (the "7.5p Vendor
Warrants"). The 7.5p Vendor Warrants shall be subject to a 5-day
VWAP accelerator, by which should Power Metal shares trade above
15p for 5 trading days then the Company shall have the right to
serve notice on VC that it must exercise and pay for the exercised
7.5p Vendor Warrants within 14 calendar days or the 7.5p Vendor
Warrants shall be cancelled.
- Up to 30 September 2022 Power Metal will engage VC to quote
for all drilling activities undertaken on PL 126/2019 and PL
127/2019.
- The Vendors and their professional licensing and geological
teams will continue to work with Power Metal following Option
exercise to manage licences and third party relationships,
undertake ground exploration and to help where appropriate to
further build the licence footprint in Botswana. Reasonable
commercial terms will be agreed for any additional work
undertaken.
Glossary:
Orogenic Gold (Deposits) - Gold deposits found within
metamorphic belts which form as a result of major crustal
deformation events.
Intrusive Magmatic Nickel (Deposits) - Nickel deposits found at
the base of large mafic and ultramafic intrusive bodies.
Arsenic-in-soil anomaly - Geochemical anomaly defined by
increased arsenic levels over background.
Gold-in-soil anomaly - Geochemical anomaly defined by increased
gold levels over background.
PGE - Platinum group elements (ruthenium, rhodium, palladium,
osmium, iridium, and platinum)
Gabbroic-troctolitic intrusives - Coarse grained, dark coloured,
intrusive rocks composed mainly of pyroxene, plagioclase and minor
amounts of amphibole and olivine.
Lower greenschist to amphibolite facies - Metamorphic rocks with
increased chlorite, serpentine, and epidote (greenschist), or
amphibole and plagioclase (amphibolite) which are indicative of a
high degree of metamorphism caused my intense heat and pressure in
the subsurface.
Granitoids - Coarse grained igneous rock composed mostly of
quartz, alkali-feldspar and plagioclase.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been
read and approved by Mr Nick O'Reilly (MSc, DIC, MIMMM, 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.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
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 and base metal exploration in North America,
Africa and Australia. Project interests range from early stage
greenfield exploration to later stage prospects currently subject
to drill programmes.
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.
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