LSE-listed base and precious metals miner Kavango Resources has strengthened its partnership with battery metals miner Power Metal Resources by entering into a strategic joint venture (JV).
Kavango in April agreed to sell a 51% interest in the Botswana-based Ditau project to Power Metal.
The parties announced on September 21 that they had now agreed a strategic JV that will result in the formation of a new, jointly owned, privately held company that is focussed on large-scale mineral exploration projects in Botswana, with prospecting licences covering 2 680 km2 of highly prospective land.
The vision for the strategic JV is to create a Botswana-focussed minerals exploration company, which will ultimately seek a separate listing on either a Canadian or British stock exchange.
For its part in the JV, Kavango will transfer its two rare earths and copper prospecting licences that cover the Ditau project, as well as two wholly-owned copper prospecting licences, PL036/2020 and PL037/2020, on the Kalahari Copper Belt (KCB) project to the new entity.
As for Power Metal, it will pay £75 000 cash to Kavango, as well as the first $75 000 of exploration expenditure in the JV over two consecutive years – totalling $150 000, with additional exploration costs to be pro-rated thereafter.
Power Metal will also pay up to £10 000 to Kavango to cover the costs of incorporating the JV.
In addition, to establish the JV, Power Metal will issue six-million shares to Kavango at 1.25p apiece; five-million warrants to Kavango, exercisable at 2p apiece with a two-year life and one-for-one replacement warrants, exercisable at 5p apiece over two years.
Further, the JV establishment requires Kavango to initiate, immediately, the next phases of field exploration on the two KCB licences and at Ditau, as well as incorporate the JV to enable a future separate stock exchange listing.
The JV will enable Kavango to inject new liquidity into its wider project portfolio, accelerate its plans for more extensive field exploration of the KCB project and focus its resources on target evaluation, followed by drilling, in the northern section of the Kalahari Suture Zone (KSZ).
The immediate aim for this new company will be to make rapid progress in the field, across its portfolio of large-scale exploration projects. The new company may also seek to acquire additional prospecting licences, building on the good standing its directors have in Botswana.
Kavango will immediately initiate the next phases of field exploration at its KCB prospecting licences and at Ditau.
Kavango CEO Michael Foster says that, over the course of completing the due diligence for the sale of the interest in the Ditau project, it became clear there was a much greater opportunity for both parties.
“Thanks to our extensive experience of working in Botswana, Kavango has been able to secure large-scale exploration projects. Each of these holds a great deal of potential, but our primary focus has always been on the KSZ.”
He adds that, now that Kavango has confirmed the strategic JV with Power Metals, both companies can leverage respective expertise and energy to drive forward their current interests on the KCB.
“We expect this will lead to a significant acceleration of our exploration efforts across both areas and we look forward to reporting our progress.”
Power Metal CEO Paul Johnson comments that the new agreement will add further strategic metal projects into the company's business portfolio.
"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.
"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," he adds.