Power Metal Resources plc (LON: POW) the AIM-listed metals exploration and development company is pleased to announce an update with regard to the Strategic Joint Venture (“SJV”) with Kavango Resources plc (“Kavango”)(LON:KAV) covering precious, base and strategic metal opportunities in Botswana.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“The Strategic Joint Venture with Kavango is gathering considerable momentum with proactive exploration underway at the Ghanzi Project in the Kalahari Copper Belt and at the Ditau Project.
Power Metal and Kavango are to accelerate the SJV both from an exploration and corporate perspective, including the plans for a potential listing on a North American or UK stock exchange as soon as practicable.
To fund the proactive exploration programmes and the preparation for a listing of the SJV, Power Metal has accelerated remaining payments under the SJV agreement, meaning all financial commitments thereunder have now been satisfied in full, and earlier than initially planned.
Further information in respect of ongoing exploration findings and the SJV listing plans will be provided in the near future.”
· Power Metal and Kavango announced a new SJV on 21 September 2020, bringing four Botswana prospecting licences held by Kavango into the SJV arrangement.
· The four licences form two distinct projects, namely:
– the Ghanzi Project (two licences covering 1,294.2km2 in the Kalahari Copper Belt (“KCB”) in south west Botswana located directly to the southwest of Sandfire Resources’ T3 and A4 Dome copper-silver discoveries);
– the Ditau Project (two licences covering 1,386km2 and prospective for rare earths and other mineralisation).
· The SJV agreement included a condition that Power Metal will pay the first US$75,000 toward Ditau Project and Ghanzi Project exploration spend within 12 months and a further US$75,000 in the subsequent 12 months (the “Initial Spend”). Power Metal was able, at its sole discretion, to accelerate the Initial Spend of US$150,000 into the first 12 months of the SJV agreement period.
· Power Metal has satisfied the US$75,000 first 12 months Initial Spend and has now elected to accelerate the second year Initial Spend and has therefore paid Kavango a further US$75,000.
· In addition the SJV agreement stipulated Power Metal was to provide a fund of up to £10,000 to cover the costs of the corporate structuring necessary in respect of the SJV. To clear this amount Power Metal has made a payment to Kavango of £10,000.
· All initial SJV agreement related Power Metal amounts due have now been satisfied in full on an accelerated basis. Going forward both Power Metal and Kavango will be required to fund 50% of SJV costs, or be diluted in line with standard industry dilution provisions.
· Exploration work on the two SJV projects continues at pace, with the latest updates provided in the Power Metal market announcements of 23 December 2020 (Ghanzi Project – Kalahari Copper Belt) and 4 January 2021 (Ditau Project).
THE SOUTH GHANZI PROJECT
The SJV South Ghanzi Project covers two prospecting licences in the KCB (PL036/2020 and PL037/2020) covering an area of 1,294 km 2 .
The South Ghanzi Project area includes lengthy geological reduction-oxidation (“redox”) boundaries, close to surface, that represent prospective 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.
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 (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 SJV 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 magnetic geophysical “ring structures” (including at least one possible kimberlite structure).
The “ring structures” are potential associated with alkaline and carbonatite intrusions.
Alkaline rocks are the principal source of 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 geophysical 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 weathered carbonatite in Angola being developed as a neodymium and praseodymium open pit mine by Pensana Metals Limited.
A Live Q&A Session with Power Metal Resources Plc (POW.L) Webinar released 5th Jan 2021
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.
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.
For further information please visit https://www.powermetalresources.com
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 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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