REG - Power Metal - Tati Project Botswana – Licences Received

Power Metal ResourcesAnnouncement

12/01/2022 13:50

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RNS Number : 2503Y  Power Metal Resources PLC  12 January 2022

12 January 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Tati Project Botswana - Prospecting Licences Received

Prospecting Licences Covering the Tati Project Successfully Transferred to
Power Metal's 100% Subsidiary Tati Greenstone Resources Pty Limited - Issue of
Equity to Vendors

 

Power Metal Resources plc (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio,
announces that the two Prospecting Licences ("PLs") comprising the Tati
Project ("Project") have now been successfully transferred into Tati
Greenstone Resources Pty Ltd ("TGR"), a wholly-owned private Botswana-based
subsidiary of Power Metal.

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:

"This is an extremely poignant moment for Power Metal, with the successful
transfer of PLs securing Power Metal's first 100% owned project in mining
friendly Botswana.

We are grateful for the support of the Vendors and the local authorities in
Botswana during this transfer process and also to our in-Country team members
who have been key to the establishment of our local holding company and to
various operations on the ground.

We have been highly proactive at the Tati Project, with multiple 2021
exploration programmes implemented which have identified multiple large-scale
gold and nickel-in-soil anomalies, some of which we targeted during the recent
reverse circulation drilling programme.

We very much look forward to the receipt of the assay results from the
drilling programme and further steps with this exciting 100% owned
opportunity."

BACKGROUND

On 28 July 2021 Power Metal exercised an option (the "Option") to acquire a
100% interest in the Tati Project, and the process was commenced to transfer
the two Project PLs (PL 126/2019 and PL 127/2019), into Power Metal's wholly
owned Botswana subsidiary.

The Option exercise announcement may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-option-exercised/15075700
(https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-option-exercised/15075700)

HIGHLIGHTS

·    Power Metal, through its wholly-owned subsidiary, TGR, now has a 100%
interest in the Tati Project with the successful transfer of PL 126/2019 and
PL 127/2019 to TGR from the Vendors.

 

·    The district-scale PL126/2019 and PL127/2019 licences cover an area
of 35km2 and 89km2 respectively; the PLs were established 10 October 2019 and
grant an exclusive prospecting right to the owner for a period of 3 years
ending 30 September 2022. Power Metal intends to satisfy the third-year
expenditure requirements and seek renewals for both licences later in the
year.

 

·    With the PLs transferred the Tati Project becomes the Company's first
wholly-owned Botswana based project where large-scale gold and nickel
discoveries are being targeted.

 

·    The successful transfer triggers certain share and warrant issuances
to the Vendors, further details of which are provided below.

 

·    Initial exploration conducted by the Company in 2021 highlighted five
target areas across the two PLs which are defined by kilometre-scale
geochemical anomalies that are coincident with various geological structures
that were highlighted by ground geophysical surveys.

 

·    Following successful initial exploration, the Company recently
completed a maiden drill programme at the Tati Project comprising 23 reverse
circulation ("RC") drillholes for a total 1,092m drilled. The RC holes tested
multiple nickel and gold targets across the PLs.

 

·    RC samples were shipped to Johannesburg for sample preparation at
Intertek Genalysis ("Intertek") preparatory facility, and have since been
shipped and received in Perth, Australia, at Intertek's laboratory where they
are undergoing analysis. Results from all RC samples are still pending and are
expected in the near term.

 

LICENCE TRANSFER - TRANSACTION TERMS

Vendor:

Vital Commodities Pty Ltd, a company registered and Incorporated in Botswana
("VC") VC is a private Botswana company that held the two PLs comprising the
Tati Project (the "Vendors"). VC is 100% owned by Equity Drilling Limited, a
company registered and incorporated in Guernsey.

Terms:

Note the Option fee in respect of this transaction was a cash payment of
£50,000 to the Vendors as originally announced on 6 May 2021 which has been
paid.  The full amount of £50,000 paid (the "Offset Payment") may be
credited and offset from the cost of the drilling undertaken by Equity
Drilling Limited (100% owner of VC) who have a right to quote for drilling
work on the PLs until 30 September 2022 or at other Power Metal held interests
in Botswana.

 

Following transfer of PL 126/2019 and PL 127/2019 into Power Metal's Botswana
wholly-owned subsidiary TGR the following consideration shares and warrants
have become due and payable:

 

-     Power Metal will now pay consideration of £25,000, 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").

 

-     Power Metal has also elected to proceed with the year 3 exploration
spend programme (for the year ending 30 September 2022) and will now pay a
further consideration of £50,000, to the Vendors through the issue of 833,333
New Ordinary Shares at an issue price of 3.0p each for each licence, resulting
in 1,666,666 New Ordinary Shares to be issued (the "Further Exercise Shares").

 

Additionally, the Company shall now issue to the Vendors 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 enabling the Vendors 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 £50,000
Offset Payment has been credited (the "5p Vendor Warrants").  To date,
£25,000 of the £50,000 Offset Payment has been credited.

 

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 also be issued enabling the Vendors
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 £50,000
Offset Payment has been credited (the "7.5p Vendor Warrants").

 

The 7.5p Vendor Warrants shall be subject to a 5-day volume-weighted average
price ("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.

 

In addition to the above, Power Metal will pay a single further deferred
consideration payment of £100,000 through the issue to 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 Au 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.

 

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 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.

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.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 2,499,999 Initial and Further Exercise Shares
to be admitted to trading on AIM which is expected to occur on or around 19
January 2022 ("Admission"). The Initial and Further Exercise Shares will rank
pari passu in all respects with the ordinary shares of the Company currently
traded on AIM.

Following Admission, the Company's issued share capital will
comprise 1,444,339,986 ordinary shares of 0.1p each. This number will
represent the total voting rights in the Company and may be used by
shareholders as the denominator for the calculation by which they can
determine if they are required to notify their interest in, or a change to
their interest in, the Company under the Financial Conduct Authority's
Disclosure and Transparency Rules.

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/
(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
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 or Underway                                                    Results Awaited

 Alamo Gold Project          USA        Earn-in to 75%   Excavation of multiple test pits and mapping & sampling.                      Field and assay results from on-site work programme.
 Authier North Lithium       Canada     Earn-in to 100%  Soil & rock sampling completed                                                Laboratory assay results of samples collected
 Ditau Project               Botswana   50%              Preparatory exploration work underway on target I10 leading to planned        Field programme findings and defined drill targets for near term drilling.
                                                         accelerated drilling targeting rare-earth elements and base metals

 Kalahari Copper Belt        Botswana   50%              Exploration programme underway across the South Ghanzi Project and further    Field programme findings and defined drill targets for near term drilling
                                                         exploration at the more recently acquired South Ghanzi Extension and Mamuno
                                                         licence areas
 Molopo Farms                Botswana   53%(1)           Kavango Option to acquire an interest in local project holding company.       Results from various work activities underway as part of the Kavango Option
                                                         Option fee payable through defined work programme
 Tati Gold/Nickel            Botswana   100%             Reverse circulation drill programme completed                                 Laboratory assay results awaited
 Haneti Project              Tanzania   35%              Diamon drill programme underway                                               Results from field programme including drill programme underway
 Victoria Goldfields         Australia  49.9%            Ongoing exploration across 848km(2) of granted exploration licences           Results from field programme including drill programme underway

 Wallal Gold/Copper Project  Australia  83.33%(2)        Passive seismic and 2D seismic processing work programme completed.           Results awaited

                                                         Ground reconnaissance work underway.

(1) should Kavango exercise their option to acquire Kalahari Key, Power Metal
interest would reduce to 40% of the Molopo Farms Complex project

(2) assuming all licences held by URE Metals Pty Limited are granted as
outlined in the Company's announcement of 19.11.21 resulting in the issue of
First Development Resources Ltd shares to URE vendors

 

 

 

 

 

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