London-listed Power Metal Resources (AIM:POW) believes its nickel sulphide project in Botswana is “perfectly poised” for its shareholders.
The resource company said that interest ‘continues to be received’ from third parties in the Molopo Farma Complex project (MFC) -- 100% owned by Kalahari Key Mineral Exploration of which POW holds a 18.26% shareholding in.
POW will spend US$500,000 on exploration expenditure, notably target drilling, in 2020, the statement outlined, and following its ‘earn-in’, will hold a 50.96% economic interest in the MFC project.
Progress discussions regarding the MFC project are currently underway at the annual Mining Indaba conference this week in Cape Town, the company noted.
A ground based TDEM survey detailed drilling parameters and drill testing priorities for eight ‘compelling’ drill targets, this morning’s statement highlighted, with holes designed to intersect at depths ranging between 300m and 800m.
Shares in Power Metal Resources were trading 7.67% higher at 0.350p on Wednesday.
“As POW's key strategic objective is to make a large scale metal discovery our interests are aligned and now we find ourselves in an interesting position,” said Paul Johnson, Chief Executive of POW.
Meanwhile, an environmental management plan for proposed drilling at the MFC Project has been finalised by Kalahari’s consultants who favour the project as environmentally “low impact.”
Shares in investment firm, Two Shields Investments, a 17.8% shareholder in Kalahari Key, were trading 2.44% at 0.105p on Wednesday.
“As I have stated before high impact exploration drilling carries a high risk of failure, in that we may not find the mineralised structures we seek,” said Johnson.
He added: “However an economic large scale nickel sulphide deposit discovery would be transformational, highly valuable and particularly sought after.
Therefore, for the MFC project, I believe the risk-reward balance is highly favourable.”
POW elected to 'earn-in' to 40% of the MFC Project on 31 December 2019, and its committed spend will occur during the period to 31 December 2020.
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