Power Metal to acquire a 50% interest in four Botswana prospecting licenses currently 100% owned by Kavango and forming a new JV between the companies.
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the acquisition of a 50% interest in a 2,680 km2 portfolio of base and strategic metal project interests in Botswana (the “Acquisition”) to be held in a new strategic joint venture holding company further details of which are provided below.
On 15 April 2020 Power Metal and Kavango Resources plc (LON:KAV)(“Kavango”) announced a conditional acquisition agreement in respect of the Ditau Camp project in Botswana, held 100% by Kavango.
In recent months the companies have been involved in discussions, the outcome of which is a new strategic joint venture (“JV”) agreement to create a new joint exploration company, with the objective of floating the company as a Botswana-focused vehicle on a major stock exchange in 2021.
- Power Metal to acquire a 50% interest in four Botswana prospecting licenses currently 100% owned by Kavango and forming a new JV between the companies.
- Two prospecting licenses prospective for copper and covering 1,294.2km2 are situated in the Kalahari Copper Belt in central west Botswana located directly to the southwest of Sandfire Resources’ T3 and A4 Dome copper-silver discoveries;
- Two further licenses comprise the Ditau Camp project covering 1,386km2 and prospective for rare earths in south west Botswana;
- Consideration for the acquisition payable to Kavango comprises £75,000 in cash, 6 million new ordinary shares of 0.1 pence each in the Company (“new Ordinary Shares”) at a price of 1.25p each and 5 million Power Metal warrants at 2.0p with a two year life to expiry and in the event of early exercise of 2.0p warrants, replacement warrants at 5.0p;
- In addition, Power Metal commits to sole funding of US$150,000 over a two year period for exploration expenditure across the Ditau Camp and Kalahari Copper Belt projects to ensure expeditious and proactive project exploration with any further expenditure above US$150,000 being funded jointly by Power Metal & Kavango;
- The four project licenses are to be held in a new Botswana private holding company, with an appropriate holding company structure to enable the possibility of the new vehicle to seek a listing on a Canadian or UK stock exchange in 2021.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“The new acquisition announced today is a significant development for Power Metal, adding further strategic metal projects into the business portfolio and in the secure, stable and supportive operating jurisdiction of Botswana. The acquisition also complements Power Metal’s interest in the Molopo Farms Complex project, which is seeking a large-scale nickel–platinum group metal discovery in Botswana, and where a maiden drill programme is planned.
We are keen to develop more insight into the potential of the Ditau Camp project, and this can only be achieved through proactive ground exploration which we intend to undertake with our JV partners. Moreover, the addition of two key Kalahari Copper Belt licences brings the Company into a highly prospective copper territory which, as I have personally experienced, has the potential to deliver considerable discoveries. Again, ground exploration is key, and we intend to be proactive.
It is a pleasure to be working with the Kavango team who have considerable operational experience and a commitment to finding a new large-scale metal discovery in Botswana. This commercially focussed outlook is what we share at Power Metal. We have found the two teams have complementary skills and intend to blend our resources in the search for a metal discovery.”
Source: Company Press Release