Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce that it has provided written confirmation to Kalahari Key Mineral Exploration Pty Limited (“KKME”) that POW has elected to earn in to a 40% interest in the Molopo Farms Complex (“MFC”) project currently 100% owned by KKME.
To earn in to the 40% MFC project interest POW must expend US$500,000 on project related expenditure to support drilling of key nickel-copper-PGM targets in 2020. The spend requirement of US$500,000 is fully covered by POW’s existing cash resources.
In addition to the 40% direct project interest that will be allocated on completion of the earn in, POW also holds 18.26% of KKME equity and therefore upon earn in completion, POW will hold an effective economic interest of 50.96% in the MFC project.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented: “Progress achieved at the MFC project has been very encouraging in 2019, with the helicopter airborne electromagnetic work delivering 17 subsurface conductor targets and the ground geophysics highlighting 5 key targets for initial drilling.
In recent weeks we have held a number of meetings and discussions with the KKME team and there is clear and growing confidence in the potential of the MFC project for a nickel discovery. We are now working with the KKME team on preparations and options for an upcoming drill programme and will provide further updates to the market as material developments occur.
I would like to be clear that exploration drilling of the nature we plan to support is high risk, albeit the in-depth preparatory work undertaken by KKME helps to mitigate that risk and increase the chance of success. That said, I also want to be clear why we are enthusiastic and have decided to proceed with the earn in opportunity. It is rare for investors in the junior resource space to have exposure to near term drill campaigns that could have the potential to yield a large-scale nickel sulphide discovery and we believe that the MFC project is one such opportunity.
If exploration work proves to be successful, the potential valuation of the MFC project could rise dramatically and the project could attract considerable interest from larger mining companies, as evidenced by the interest already shown to date and by the companies that hold ground in the vicinity of the MFC project.”
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