TIDMPOW
RNS Number : 6687G
Power Metal Resources PLC
28 July 2021
28 July 2021
Power Metal Resources PLC
("Power Metal" or the "Company")
Tati Gold-Nickel Project Botswana - Option Exercised
Geochemical Sampling, Mapping and Prospecting Programme
Continues at Pace; Option Exercised to Acquire a 100% Interest in
Two Licences in the Tati Greenstone Belt, Botswana
Power Metal Resources PLC (LON:POW) the AIM listed metals
exploration and development company announces today that it has
exercised its option (the "Option") to acquire a 100% interest in
two gold-nickel exploration licences located within the Tati
Greenstone Belt (the "Tati Project" or the "Project") located near
Francistown, Botswana, through its local wholly owned operating
subsidiary Power Metal Resources Botswana Pty Limited ("Power Metal
Botswana").
Paul Johnson, Chief Executive Officer of Power Metal Resources
plc commented:
"The Tati Greenstone Belt is an ancient Archaean greenstone belt
in the east of Botswana towards the Zimbabwe border. Francistown
and its surrounding area were the site of the first South African
gold rush in the nineteenth century, and have not had extensive
modern exploration.
The Company's due diligence review of historic data identified
numerous multi kilometre-scale nickel, arsenic and gold anomalies,
which are now the subject of an ongoing Phase I exploration
programme which includes detailed geochemical sampling, mapping and
prospecting.
We consider that the Tati Project is highly prospective and has
the potential to deliver major gold and nickel discoveries, and on
that basis we have exercised our option to acquire a 100% interest
in the Project.
This transaction brings Power Metal to four project interests in
Botswana, demonstrating our commitment to this secure and
supportive jurisdiction therefore exposing our shareholders to
tremendous upside across a highly attractive portfolio which
alongside the Tati Projects now includes:
- 50% interest in a strategic joint venture ("SJV") with Kavango
Resources plc ("Kavango") at the South Ghanzi Kalahari Copper Belt
project targeting copper-silver discoveries with multiple airborne
electromagnetic ("AEM") geophysics targets and geochemical
copper-zinc anomalies including some geographically extensive
targets including the Morula Target which extends for over 18km in
length and remains open along strike.
- 50% interest, also in the SJV with Kavango, in the Ditau Camp
project targeting rare earth discoveries within large scale
potential carbonatite intrusive bodies where three key target areas
have recently been prioritised for drilling.
- An effective 50.8% economic interest in the Molopo Farms
Complex project with JV partner Kalahari Key Mineral Exploration
Pty Ltd targeting magmatic intrusion-hosted massive and
disseminated nickel-copper sulphide and platinum group element
("PGE") discoveries.
The Tati Project will shortly be delivering exploration updates
to the market as the samples collected are due to to be assayed
utilising multi-element analysis. In addition, the objective is to
see drill programmes running across all four Botswana interests in
2021, seeking multiple metal discoveries across the portfolio."
BACKGROUND - TATI PROJECTS
Readers wishing to review the background should refer to the
Company's announcement dated 6 May 2021 detailing the full terms of
the Option and which may be viewed here:
https://www.londonstockexchange.com/news-article/POW/option-agreement-botswana-gold-nickel-properties/14966683
A historical data compilation completed on the Project led to
the identification of several kilometre-scale nickel, arsenic and
gold in-soil anomalies on PL127/2019 and PL126/2019. The historic
data collected and interpreted is of widely spaced soil sampling
surveys which were collected and analysed by previous
operators.
The results from the data compilation were announced in a due
diligence update by the Company on 23 June 2021 and which may be
viewed here:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-due-diligence-update/15029851
A Phase I work programme is underway on the Project which was
announced by the Company on 28 June 2021 and may be viewed
here:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-exploration-commences/15036117
EXPLORATION PROGRAMME UPDATE
Power Metal is currently undertaking a systematic, infill and
extensional, soil sampling programme which will include over 1,000
invididual soil sampling points, together with outcrop rock
sampling and prospecting following up on multiple orogenic gold and
magmatic nickel targets identified during the historic data
compilation. Further information on exploration plans and current
status are provided below.
PL126/2019
Two soil sampling grids have been completed. The first grid,
located along the northwestern licence boundary, is targeting a
northwest-southeast oriented historic Au-in-soil anomaly. A total
of 380 samples have been collected along northeast-southwest
oriented sample lines.
These samples are currently en route to South Africa where they
will be prepped to be sent on for final geochemical analysis in
Australia.
The second grid completed over this licence covers a historic
nickel-in-soil anomaly which is coincident with a government mapped
mafic/ultramafic intrusive unit. A total of 84 samples were
collected which will be assayed by x-ray fluorescence ("XRF")
analysis in the coming days.
PL127/2019
A total of three soil sampling grids will be completed.
The first grid covering Target Area A has been completed which
included 350 soil samples. This grid was designed to provide
coverage over a northwest-southeast oriented historic
arsenic-in-soil anomaly.
Two additional grids covering: 1) Target Area B - over a
historic arsenic-in-soil anomaly which is spatially coincident with
arsenic anomalies extending from the nearby Signal Hill Gold mine;
and 2) Target Area C - covering a historic southeast-northwest
trending Nickel-in-soil anomaly which extends on to the nearby
Tekwane Nickel mines. These surveys are in progress and the samples
will be analysed with a portable XRF spectrometer within the coming
days, following completion of the programme.
Maps showing the location of the Project licences , target areas
and the sampling undertaken to date may be viewed on the Company's
website through the following link:
https://www.powermetalresources.com/arsenic-geochemistry-map/
EXPLORATION PROGRAMME RATIONALE AND NEXT STEPS
The goal of the Phase I work programme is to further develop
some of the high-priority exploration targets on the Tati Project
which the Company plans to drill test later in the year.
Results from this programme will be released to the market
following receipt, compilation and interpretation by Power
Metal.
OPTION EXERCISE - TRANSACTION TERMS
Vendor:
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.
Option Exercise:
Note the Option fee in respect of this transaction was a cash
payment of GBP50,000 to the Vendors as originally announced on 6
May 2021 and now paid. The full amount of GBP50,000 paid (the
"Offset Payment") may be credited and offset from the cost of the
drilling undertaken by Equity Drilling Limited (100% owner of VC
and who have a right to quote for drilling work at the licences
until 30 September 2022) at the two PLs which are the subject of
this Option or at other Power Metal interests in Botswana.
VC will subject, to local authority approvals, arrange immediate
transfer of 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 of PL 126/2019 and PL 127/2019
to Power Metal Botswana have been received and the transfer
completed.
- Power Metal 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
over New Ordinary Shares (the "Vendor Warrants") in two separate
tranches of 2,916,666 warrants each as follows:
2,916,666 Vendor Warrants shall be issued to acquire 2,916,666
New Ordinary Shares at an exercise price of 5p per share,
exercisable over a 2-year period from 6 May 2021 and which are only
exercisable on completion of exploration drilling against which the
GBP50,000 Offset Payment has been credited (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.
2,916,666 Vendor Warrants shall be issued to acquire 2,916,666
New Ordinary Shares at an exercise price of 7.5p per share,
exercisable over a 2-year period from 6 May 2021 and which are only
exercisable on completion of exploration drilling against which the
GBP50,000 Offset Payment has been credited (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.
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 operated until 2016, including the
former Tati Nickel Mining's Selkirk underground mine which
commenced production in 1989 and the Phoenix open pit which started
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 believes it to be under explored 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.
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/Gold/Nickel-in-soil anomaly - Geochemical anomaly
defined by increased arsenic/gold/nickel levels over
background.
PGE - Platinum group elements (ruthenium, rhodium, palladium,
osmium, iridium, and platinum
Mafic Intrusive Unit - Igneous rock that is dominated by
magnesium and iron rich silicate minerals including pyroxene,
amphibole, olivine, and mica.
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 large scale metal
discoveries.
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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