London-listed Power Metal Resources has signed a three-month option agreement with fellow-listed Kavango Resources, whereby Kavango may acquire 51.15% of the issued share capital of Kalahari Key Mineral Exploration, based in Botswana.
Kalahari Key has a 60% effective interest in the Molopo Farms Complex project, which is prospective for nickel, copper and platinum-group metals.
Power Metal will retain a 40% shareholding in Kalahari Key, which it earned through exploration investment.
Following the ownership restructure, Kalahari Key will be 51.15% owned by Kavango, 40% by Power Metal and 8.85% by London-listed Evrima.
Power Metal CEO Paul Johnson says the company has long intended to streamline the ownership of Kalahari Key, particularly to ensure a heightened level of operational efficiency on the ground in Botswana.
Power Metal has an existing working relationship with Kavango in the Kanye Resources joint venture, which covers a number of projects in Botswana.
The company believes the Molopo project poses considerable opportunity, based on evidence already secured, such as assay samples of up to 1.7% nickel sulphides.
In return for the option and rather than paying a fee, Kavango will complete a work programme involving a moving loop survey, soil geochemical analysis, three-dimensional modelling and reinterpretation of gravity data, all over various targets of the projects area.
“The next important element in our strategy is to have a pipeline of high-quality projects we can acquire or earn into. In this respect, Molopo Farms could be a perfect fit. The fact that our close strategic partners, Power Metal and Spectral Geophysics, are already heavily involved is potentially a big advantage.
“The terms of the deal are also appealing. An all-share transaction makes sound commercial sense, enabling us to preserve cash resources to use in the field. The structure of the work programme option, means we can immediately start moving the project forward, while also performing detailed due diligence,” Kavango CEO Ben Turney comments.