REG - Power Metal - Kalahari Copper Belt - Business Update

Power Metal ResourcesAnnouncement

29/03/2021 07:05

RNS Number : 7237T
  
Power Metal Resources PLC
  
29 March 2021
  
 

29 March 2021
Power Metal Resources plc 
("Power Metal" or the "Company")
Kalahari Copper Belt -  Business Update
Conditional Agreements Signed to Significantly Increase Kalahari Copper Belt Licence Footprint
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to provide a business update in respect of the Company's Strategic Joint Venture ("SJV") with Kavango Resources plc ("Kavango")(LON:KAV).
Background:
The SJV covers precious, base and stategic metal opportunities in Botswana.  Power Metal and Kavango each have a 50% interest in the SJV.
The plan is for the SJV to secure a listing in London, and to this effect a local Botswana operating company has been established called Kanye Resources (Pty) Limited ("Kanye Botswana").  Kanye Botswana is wholly owned by Kanye Resources plc ("Kanye plc"), a UK public company which will be the planned listing vehicle.
Power Metal and Kavango will each have a 50% shareholding in Kanye plc following completion of the restructuring exercise.  Both companies will have representative directors on the board of Kanye plc and will contribute to the funding of Kanye plc and Kanye Botswana, during the listing process.
Formal transfer documents have been lodged with the relevant authorities in Botswana to transfer the four SJV licenses currently held in the name of Kavango Minerals (Pty) Ltd into Kanye Botswana.  The four licences are as follows:
-      South Ghanzi Project (Kalahari Copper Belt or "KCB") covering 1,294 km2  in two prospecting licences and targeting copper/silver discoveries;
-      Ditau Project covering 1,386 km2  in two prospecting licences and targeting rare earth element discoveries.
With its strategic footprint of exploration interests in Botswana, Kanye plc will seek to acquire additional exploration opportunities in the build up to listing, further enhancing its position. 
Highlights:
-      Power Metal is pleased to announce the signing of two conditional agreements that allow Kanye Botswana to acquire a 100% interest in eight prospecting licences (PLs) in the highly prospective Kalahari Copper Belt ("KCB").
-      Headline terms of the two agreements include:
o  Four PLs in proximity to Ghanzi in the central zone of the Botswana KCB currently held by Shongwe Resources (Pty) Ltd and which can be acquired outright for a cash consideration of US$200,000.
o  A further four PLs on the western end of the Botswana KCB, near the town of Mamuno adjacent to the Namibian border.  Currently held by Vinmarsh Interprises (Pty) Ltd  these can be acquired outright for a cash consideration of US$230,000.
-      Both transactions are subject to due diligence and the approval of the Botswana authorities.
-      The cash consideration totalling US$430,000 (c. £312,000) will be lodged in a nominated escrow account and released following completion of due diligence and licence transfer.  Power Metal will fund 50% of the above cash consideration or US$215,000 (c. £156,000), from its existing USD cash reserves.
-      After transfer of all ten KCB PLs, Kanye Botswana will control 4,255 km2 of prospective exploration ground in the KCB, targeting the discovery of commercial copper/silver deposits
 
Paul Johnson, Chief Executive Officer of Power Metal Resources, commented:
"The conditional acquisitions announced today, subject to due diligence and approvals in Botswana, would significantly increase the footprint of Kanye Botswana in the Kalahari Copper Belt.  The additional ground complements that already held and we believe will add material value to the investment proposition, in advance of the planned listing in London.
The collaboration with Kavango has so far seen material exploration success and now has delivered an opportunity, through the conditional acquisitions announced today, for the SJV to become an even more significant participant in the rapidly advancing Kalahari Copper Belt exploration story."
 
FURTHER INFORMATION
Strategic Joint Venture - Group Structure and Interests 
The SJV currently has a 100% interest in the two Ghanzi South PLs on the KCB (1,294km2) and the two "Ditau" PLs south of the town of Kang in central Botswana (1,386km2), which is prospective for minerals associated with carbonatite including rare earth elements. All four PLs are currently being transferred into the name of Kanye Resources Botswana (Pty) Ltd from Kavango Minerals (Pty) Ltd.
Kanye Resources Botswana (Pty) Ltd, incorporated in Botswana, is a 100% subsidiary of UK registered Kanye Resources plc and is the SJV initiative between Kavango (50%) and Power Metal (50%).  It is planned to list Kanye Resources plc on the London Stock Exchange later in the year.
Earlier in March 2021 SkyTEM Africa (PTY) Ltd completed over 1,300 line-km of airborne electromagnetic geophysical survey on the Ghanzi South PLs on behalf of Kanye. The contractor's final report will be available in early April.  
Shongwe Resources (Pty) Ltd
Subject to due diligence and approval of the Botswana authorities, the directors of Shongwe Resources have agreed to transfer four licences (480km2) situated south and west of Kanye's Ghanzi South PLs for a cash consideration equivalent to US$200,000.
Kavango and Power Metal will each contribute 50% to the acquisition cost. 
VinMarsh Interprises (Pty) Ltd
Subject to due diligence and approval of the Botswana authorities, the directors of VinMarsh Interprises (Pty) Ltd have agreed to transfer four licences (2,481km2) situated on the western end of the Botswana KCB near the border with Namibia in the vicinity of the town of Mamuno, for a cash consideration equivalent to US$230,000.
Kavango and Power Metal will each contribute 50% to the acquisition cost. 
THE SOUTH GHANZI PROJECT
The SJV South Ghanzi Project includes two prospecting licences in the KCB (PL036/2020 and PL037/2020) covering an area of 1,294 km2.
 
The South Ghanzi Project, located on the highly prospective Kalahri Copper Belt ("KCB") in northern Botswana, includes lengthy geological reduction-oxidation ("redox") boundaries and geological fold structures that represent high priority exploration targets.
The redox boundaries were formed several hundred million years ago in active sedimentary basins flooded by shallow seas. Organic matter accumulating on the sea floor created anoxic conditions, which formed a chemical barrier to metal ions rising upwards through the sediments as the basin subsided. The change in chemistry caused the precipitation of metal species (carbonates, sulphides etc.) including copper and silver on or just below the redox boundary.
Subsequent tectonic activity folded the sedimentary layers, which was often accompanied by the concentration of metals into the fold hinges and other structural trap-sites.
Several large-scale copper/silver ore deposits have been discovered on the KCB in association with fold hinges in areas now held under licence by Sandfire Resources Ltd (ASX:SFR) and Cupric Canyon (a privately owned mining development company). These deposits are relatively close to surface and may be amenable to open pit mining operations.
Accumulations of sulphide metals can be traced along the strike of redox boundaries (sometimes for many kilometres), since they often have a higher magnetic signature than the surrounding rock.
THE DITAU PROJECT
The Ditau Project comprises two prospecting licences ("PLs") (PL169/2012 & PL010/2019) that cover an area of 1,386km2. Geophysical and geochemical analyses by Kavango in the two PLs have identified 10 "ring structures" (including at least one possible kimberlite).
The "ring structures" are potential carbonatites.
Carbonatites are the principal source of rare earth elements (REEs) including the much sought-after elements Neodymium (Nd) and Praseodymium (Pr), which are used in the manufacture of the new generation of electric vehicles (EVs), magnets and other high-tech applications.
One of the ring structures is a 7km x 5km magnetic and gravity anomaly with significant zinc-in-soils values. Assay and whole rock geochemistry results from two drill holes drilled on this ring structure in 2019 by Kavango demonstrated the presence of an extensive zone of altered Karoo sediments sitting above a mafic intrusive body. The alteration extended to over 300m in depth in both holes, which were 1.8km apart. The geochemistry obtained from the drill core suggested that the alteration was due to "fenitization", a type of extensive alteration associated with alkali magmatism and carbonatites. 
Fenite alteration is particularly associated with carbonatite intrusions, where it occurs as an aureole or halos around the carbonatite intrusive. It can indicate the presence of mineralised intrusions in a similar way that alteration patterns are used in other ore systems, such as porphyry copper deposits.
Kavango suspects that the post-Karoo fenitized rocks intersected at Ditau may be comparable to the Longonjo carbonatite in Angola being developed as a neodymium and praseodymium open pit mine by Pensana Metals Limited.
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 metals exploration in North America and Australia together with base and strategic metal exploration in Africa. 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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