TIDMPOW
RNS Number : 6639T
Power Metal Resources PLC
26 November 2021
26 November 2021
Power Metal Resources PLC
("Power Metal" or the "Company")
Kavango Option - Kalahari Key Botswana
Kavango Resources plc Secures Option to Acquire Up to 51.15% of
Kalahari Key Mineral Exploration Pty Ltd which will own 100% of the
Molopo Farms Complex Project, Botswana
Power Metal Resources PLC (LON:POW) the London listed
exploration company seeking large-scale metal discoveries across
its global project portfolio announces a 3 month option has been
signed (the "Option") whereby Kavango Resources plc
(LON:KAV)("Kavango") may acquire up to 51.15% of the issued share
capital of Kalahari Key Mineral Exploration Pty Limited, Botswana
("Kalahari Key") ("KKME") (the "Acquisition").
Kalahari Key, which would be restructured on Option exercise as
outlined below, currently has an effective 60% interest in the
Molopo Farms Complex Project (the "MFC Project" or the "Project")
after Power Metal completed the earn-in to an effective 40% direct
Project interest announced 22 April 2021 (the "Earn-In").
Paul Johnson, Chief Executive Officer of Power Metal Resources
plc commented:
"It has been clear for some time that the ownership structure of
Kalahari Key needed to be streamlined and that we needed to ensure
a heightened level of operational efficiency on the ground in
Botswana.
We are therefore pleased to see Kavango demonstrate an interest
in the MFC Project through this Option announced today which helps
achieve both outlined objectives.
Power Metal has an existing working relationship with Kavango in
the Kanye Resources joint venture covering a number of projects in
Botswana and we are confident that should Kavango exercise the
Option, we look forward to a positive working relationship with
them as MFC Project partners going forward.
Notably the Option fee is covered by an immediate Option work
programme that will provide valuable additional information about
the MFC Project and whatever the Option outcome will move the
Project considerably forward from a technical perspective.
We believe that the MFC Project is a considerable opportunity
based on real world evidence already secured from Project
exploration to date, including assay samples of up to 1.7% nickel
sulphides in the second drill hole, KKME1-6. Now is the time to
accelerate the MFC Project and we look forward to getting on with
that."
TRANSACTION HIGHLIGHTS
Should Kavango exercise the Option it will acquire the majority
of Kalahari Key shares in issue including the 5,313 shares
currently held by Power Metal, but excluding the 3,802 shares held
by one shareholder, Evrima plc (LON:EVA).
Power Metal will retain its 40% Project interest secured through
the Earn-In. This interest will not be at Project level, but
through a 40% shareholding in Kalahari Key which will be
restructured following the Kavango Option exercise.
Following Option exercise and restructuring the new ownership
structure of Kalahari Key is expected to be as follows:
Kavango Resources 51.15%
---------------------------------- ------------------
Power Metal Resources 40.00%
---------------------------------- ------------------
Evrima Plc 8.85%
CONSIDERATION RECEIVABLE BY POWER METAL
On Option exercise Power Metal will sell its 5,313 Kalahari Key
shares to Kavango and will receive Kavango new ordinary shares of
0.1 pence each ("Kavango Shares") and warrants with an exercise
price of 8.5p and a life to expiry of 2 years ("Kavango
Warrants").
The number of Kavango Shares to be paid is variable and
dependent on the price of Kavango Shares at the time of Option
exercise - but Power Metal expects to receive as payment
approximately 5,162,500 Kavango Shares equating to disposal
consideration of between GBP283,938 (at 5.5p per Kavango Share) and
GBP454,300 (at 8.8p per Kavango Share), plus 5,162,500 Kavango
Warrants.
Further detailed consideration terms are provided below.
THE KAVANGO OPTION WORK PROGRAMME
In return for being granted the Option, Kavango proposes to
complete the following work programme at the MFC Project (the "Work
Programme"):
I. Spectral to perform a single "moving loop" survey over Target 1, to be paid for by Kavango.
II. Kavango to perform soil geochemical analysis over Target 2.
KKME to provide details of an outline soil-sampling programme, to
be signed off by Kavango's Exploration Manager. Kavango to provide
a maximum of 2 teams for a maximum of 1 calendar month to perform
the soil sampling programme.
III. Kavango to arrange for the remaining core from Target 3 to
be cut and sent for analysis. KKME to provide confirmation of the
quote received for lab analysis.
IV. Kavango to input the regional borehole data from Targets 1,
2 & 3 into a unified 3D model. KKME has indicated this data is
in Microsoft Excel. KKME to provide Kavango with said data.
V. Kavango to send thin sections of core samples taken from the
3 bore holes drilled at Targets 1, 2 & 3 for university
analysis.
VI. Kavango to fund a contract agreed with Bell Geophysics for a
reinterpretation and inclusion of gravity data for the northern
part of the licence block.
In the event that Kavango does not exercise the Option, Kavango
will turn over to KKME all data gathered from the Work Programme,
which will then become the property of KKME.
TRANSACTION HIGHLIGHTS
- Kavango has signed a 3 month Option commencing 25 November
2021 to acquire all the shares of Kalahari Key excluding the 3,802
shares which will be retained by existing holder Evrima plc.
- On a fully diluted basis Kalahari Key will have 25,733 shares
in issue (assuming 1,100 Kalahari Key share options are exercised)
and, assuming all Kalahari Key options are exercised, 21,931
Kalahari Key shares would be acquired by Kavango.
- Power Metal holds 5,313 shares (or 20.65% of Kalahari Key on a
fully diluted basis, or 24.23% excluding the Evrima holding) and
this Power Metal holding will be sold to Kavango as part of the
transaction.
- Following Option exercise the capital structure of Kalahari Key will be restructured.
- Power Metal will exchange its 40% direct MFC Project interest
for a 40% shareholding in the restructured Kalahari Key.
- Following Option exercise and restructuring the new ownership
structure of Kalahari Key will be as follows:
Kavango Resources 51.15%
---------------------------------- ------------------
Power Metal Resources 40.00%
---------------------------------- ------------------
Evrima Plc 8.85%
- The Option has been secured by Kavango in exchange for
completion of a Kavango funded defined Option exploration work
programme at the MFC Project.
- The consideration for the Acquisition will be satisfied
through the issue of new ordinary shares of Kavango ("Kavango
Shares") at a price to be determined as detailed further below and
the grant of Kavango warrants with an exercise price of 8.5p each
with a 2-year life to expiry (the "Consideration").
- Should Kavango exercise the Option the number of Kavango
Shares to be issued is variable. However, should the Kavango price
remain in the range of 5.0p to 8.8p, the Consideration will
comprise 21,307,500 Kavango Shares and 21,307,500 Kavango Warrants.
Full details of the calculation method is outlined below.
- The Consideration value is between GBP1,170,000 and
GBP1,875,000 (dependent on the price of Kavango Shares at the time
the Option is exercised), plus the value of the Kavango Warrants
awarded.
- Should Kavango exercise the Option, on a fully diluted basis
as described above, and assuming the share price of Kavango remains
in the 5.0 - 8.8p range Power Metal expects to receive 5,162,500
Kavango Shares equating to disposal consideration of between
GBP283,938 (at 5.5p per Kavango Share) and GBP454,300 (at 8.8p per
Kavango Share). In addition Power Metal expects to receive
5,162,500 Kavango Warrants as described above.
- Should the Kavango share price on a volume weighted average
share price in the ten days prior to the Option exercise fall below
5.0p or rise above 8.8p the number of Kavango shares to be issued
would change but the Consideration value would remain unchanged.
Please see below for further information in respect of the disposal
consideration and the calculation of Kavango Shares and Kavango
Warrants that could be issued.
- Further transaction information is available below and in the
Kavango market news announcement released today and below.
CONSIDERATION SHARES/WARRANTS CALCULATION
The Option has a 3-month term, valid commencing 25 November
2021, which gives Kavango the exclusive right (at its sole
discretion) to acquire 100% of the fully diluted share capital in
KKME, in exchange for:
- 21,307,500 million Kavango Shares, issued at a price of 5.5p
per share and credited as fully paid, with half the shares subject
to a 6-month lock-in and the remaining shares subject to a 12-month
lock-in, both from the Option exercise date (the "Acquisition
Shares").
- If at the time of exercising the Option, the Kavango share
price has traded below 5p on a 10-day Volume Weighted Average Price
("VWAP") (the "Lower Price") in the ten trading days immediately
preceding the Option exercise date, then Kavango will issue the
Acquisition Shares at the Lower Price for a total consideration of
GBP1,170,000.
- If at the time of exercising the Option, the Kavango share
price has traded above 8.8p on a 10-day Volume Weighted Average
Price ("VWAP") (the "Upper Price") in the ten trading days
immediately preceding the Option exercise date, Kavango will issue
Aquisition Shares at the Upper Price for a total consideration of
GBP1,875,000.
- 1-for-1 two-year warrants exercisable at 8.5p per new Kavango
Share, which are subject to an acceleration clause, whereby if
Kavango's shares close above 17p for 5 trading days, Kavango may
write to warrant holders at any time providing 10 working days'
notice of accelerated exercise, with 10 working days thereafter for
payment (the "Acquisition Warrants").
- Should Kavango exercise the Option, on a fully diluted basis
as described above, and assuming the share price of Kavango remains
in the 5.0 - 8.8p range Power Metal expects to receive 5,162,500
Kavango Shares equating to disposal consideration of between
GBP283,938 (at 5.5p per Kavango Share) and GBP454,300 (at 8.8p per
Kavango Share). In addition Power Metal expects to receive
5,162,500 Kavango warrants as described above.
- Kavango will issue the Acquisition Shares and Acquisition
Warrants directly to KKME shareholders, pro-rated in their
respective allocations.
- The Acquisition Warrants will be transferable between KKME
shareholders, with the written permission of Kavango.
- Kavango will complete the Work Programme in exchange for the Option
MOLOPO FARMS PROJECT - FURTHER INFORMATION
- KKME has a 60% interest in the MFC Project, which is a
nickel/copper/platinum group elements exploration project located
in southern Botswana
- The MFC Project covers 1,723km(2)
- Exploration targets lie under Kalahari Cover
- Primary exploration strategy led by advanced geophysics
- Spectral Geophysics ("Spectral") historically engaged to complete ground-based surveys
- KKME drilled 3 boreholes in October 2020 ("Targets 1, 2 &
3"), each of which encountered ultramafic rocks
- Magmatic nickel sulphides were identified in Borehole K1-6 ("Target 2"; https://www.londonstockexchange.com/news-article/POW/botswana-molopo-farms-complex-further-assays/15148836
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 - Background
Power Metal Resources plc (LON:POW) is an AIM listed metals
exploration company which finances and manages global resource
projects and is seeking large scale metal discoveries.
The Company has a principal focus on opportunities offering
district scale potential across a global portfolio including
precious, base and strategic 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.
Power Metal will develop projects internally or through
strategic joint ventures until a project becomes ready for disposal
through outright sale or separate listing on a recognised stock
exchange thereby crystallising the value generated from our
internal exploration and development work.
Value generated through disposals will be deployed internally to
drive the Company's growth or may be returned to shareholders
through share buy backs, dividends or in-specie distributions of
assets.
Power Metal Exploration Programmes Underway/Results Awaited
Power Metal has exploration programmes completed or underway,
with results awaited, as outlined below:
Project Location POW % Work Completed Results Awaited
or Underway
Alamo Gold USA Earn-in Excavation of multiple Field results from
Project to 75% test pits and mapping on-site work programme.
& sampling.
---------- --------- -------------------------- -------------------------
Athabasca Canada 100% Phase I field exploration Laboratory assay
Uranium completed results of samples
collected for uranium
and REEs
---------- --------- -------------------------- -------------------------
Authier North Canada Earn-in Soil & rock sampling Laboratory assay
Lithium to 100% completed results of samples
collected
---------- --------- -------------------------- -------------------------
Silver Peak Canada 30% Following drill Overlimit analysis
programme demonstrating results
bonanza grade silver,
overlimit testing
being undertaken
where sample grade
exceeded previous
assay method detection
limits
---------- --------- -------------------------- -------------------------
Ditau Project Botswana 50% Preparatory exploration Field programme
work underway on findings and defined
target I10 leading drill targets for
to planned accelerated near term drilling.
drilling targeting
rare-earth elements
and base metals
---------- --------- -------------------------- -------------------------
Kalahari Copper Botswana 50% Exploration programme Field programme
Belt underway across findings and defined
the South Ghanzi drill targets for
Project and further near term drilling
exploration at
the more recently
acquired South
Ghanzi Extension
and Mamuno licence
areas
---------- --------- -------------------------- -------------------------
Tati Gold/Nickel Botswana 100% Reverse circulation Laboratory assay
drill programme results awaited
completed
---------- --------- -------------------------- -------------------------
Victoria Goldfields Australia 49.9% Ongoing exploration Results from field
across 848km(2) programme including
of granted exploration drill targets for
licences near term drilling
---------- --------- -------------------------- -------------------------
Wallal Gold/Copper Australia 83.33% Passive seismic Results awaited
Project and 2D seismic
processing work
programme completed
---------- --------- -------------------------- -------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCEAAFSAFSFFAA
(END) Dow Jones Newswires
November 26, 2021 02:00 ET (07:00 GMT)
African Battery Metals (LSE:ABM)
Historical Stock Chart
From Mar 2024 to Apr 2024
African Battery Metals (LSE:ABM)
Historical Stock Chart
From Apr 2023 to Apr 2024
