Haneti Project - Exploration Potential

RNS Number : 1758P

Power Metal Resources PLC

08 October 2019

 

8 October 2019

Power Metal Resources plc ("POW" or the "Company")

Haneti Project - Exploration Potential

Power Metal Resources plc (LON:POW) the AIM listed African focused metals exploration and development company is pleased to draw investors' attention to the announcement issued today by Katoro Gold plc (LON: KAT)("Katoro Gold")("Katoro") outlining the exploration potential of the Haneti Project ("Haneti" or the "Project"), in Tanzania.

Investors wishing to view the Katoro Gold announcement may do so through the following link:

https://polaris.brighterir.com/public/katoro_gold/news/rns/story/rg0z97x/export

POW Interest in Katoro Gold and Haneti Project

Power Metal Resources currently holds 10,000,000 shares which currently represents 5.90% of Katoro Gold's issued share capital.  In addition, POW also currently holds 10,000,000 warrants in Katoro Gold exercisable at 1.25p (2,500,000 warrants expiring on 15 March 2022 and 7,500,000 warrants expiring on 15 May 2022). 

POW also has a 25% interest in Katoro Gold's Haneti nickel project in Tanzania, with a right to increase its interest to 35% by a payment to Katoro Gold of £25,000 in cash by 15 May 2020.

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented "Today's announcement from Katoro clearly outlines the depth and range of opportunity that Haneti offers Katoro Gold and Power Metal Resources. 

The Haneti project, in terms of scale and diversity, is quite unique, and provides the potential for a number of large-scale exploration and development opportunities.

The key focus, naturally, is the advanced nickel sulphide prospective Mihanza Hill, where a drill programmed is planned. However, it would be a mistake to not highlight other opportunities in the licence area, including the greenstone gold prospective ground to the west of the licence package situated just 10km from Shanta Gold's Singida gold project.

I am looking forward to working with Katoro to advance Haneti and to updating the market as we progress towards our principal objective of making a large scale metal discovery."

Extracts from the Katoro announcement are provided below.

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"Highlights:

·    Haneti is a polymetallic system with identified potential for nickel (sulphide and laterite), Platinum Group Metals ('PGMs'), copper, gold, lithium and rare earth elements ("REEs");

·    The principle target zone is an 80 km long ultramafic belt with grades from surface sampling of up to 13.6% nickel and 2.33 g/t combined platinum and palladium

o  Nickel and palladium have experienced significant price strength of late with nickel now trading at circa $17,600/tonne and palladium at $1,637/ounce;

·    Within the 80 km ultramafic belt is the principle target, Mihanza Hill, where 2015 geophysical work identified significant extensions to nickel sulphide prospective target rock formations and geochemical interpretation has identified prospectivity for chonolith type nickel-copper-PGM mineralisation;

o  Mihanza Hill is believed by the Katoro, based on desktop work undertaken, to have the potential to host a similar style of mineralisation to the Sipa Resources Limited (ASX:SRI) Akelikongo nickel project in Uganda;

·    Also, within the Haneti licence area there is identified greenstone gold potential to the west, where there is extensive artisanal gold mining in an area a few kilometres to the east of Shanta Gold's 0.7 million ounce Singida project;

·    Furthermore, the Project has the potential for lithium, tantalum niobium and REE mineralisation demonstrated by host pegmatites in an area where sampling has returned a high-grade sample of 2.6% lithium and strongly anomalous results in niobium and tantalum;

·    Further information in respect of Haneti exploration plans will be provided over the coming weeks with announcements in respect of nickel-copper-PGM, gold and lithium-rare earth exploration plans.

Haneti Project Background

·    Katoro's Haneti project covers an area of approximately 5,000 sq. km located in central Tanzania about 90 km north of the country's administrative capital Dodoma and has excellent road access.

·    The Project is favourably located for various styles of mineralisation due to its geology comprising part of the margin of the Tanzanian Craton (major c. 2.5 billion-year old crustal block) where it has been overthrust by younger rocks as part of a major crustal plate collision zone.

·    The Project has significant mineral discovery potential due to this favourable geological setting and this has been demonstrated by the results of historic exploration carried out over the area by previous operators.

Haneti Project Mineralisation

Principal styles of mineralisation indicated for Haneti are outlined below.

Nickel, Copper and PGMs

Katoro has been undertaking a review and analysis of all historic work completed on the Haneti project and believe that it could host a chonolith type nickel sulphide deposit. 

Prospectivity for nickel, copper and PGMs (e.g. platinum, palladium, rhodium and others)  is associated with a linear NW-SE trending zone of iron and magnesium rich rocks (ultramafics), the Haneti-Itiso Ultramafic Complex (HIUC), which cross-cuts the project and extends over a distance of  80 km.

Exploration to date has focussed on the Ni-Cu-PGM mineral potential of the Project with two well defined drill targets ready for testing, one at a location where a surface sample returned grades of 13.6% nickel, 0.4 ppm platinum and 1.9 ppm palladium from an iron rich shallow pit sample. Geophysical and geochemical processing and interpretation of exploration data by independent consultants at this location have shown compelling evidence that the rocks underlying this area are fertile for potential Ni-Cu-PGM accumulations.

The Haneti project was the subject of an independent geochemical interpretation in 2014, which identified the Mihanza Hill area as a prime drill target for Ni-Cu-PGM mineralisation.  The findings from the geochemical interpretation report and the in-house review thereon was sent to Perth based geophysical consultants, Western Geophysics, for integration with recently acquired airborne geophysical data (see below) to better understand the geology of Haneti and to generate new target areas particularly for Ni-Cu-PGM style mineralisation.

In 2012/13, the Geological Survey of Tanzania ('GST') conducted a regional high resolution airborne geophysical survey which included an area of approximately 12,000 sq. km. covering the Haneti project and surrounding area. An independent geophysical interpretation of the data by Australian consultants Western Geophysics in 2015 provided improved resolution of the HIUC's 80 km central zone and also identified extension to the HIUC comprising mafic-ultramafic zones with strike lengths of 10-20 km (northwest zone) and 30 km (southwest zone). This interpretation extended the footprint of the known nickel sulphide prospective rocks on the project and within adjacent areas.

At the primary target, Mihanza Hill, a high magnetic anomaly was modelled by Western Geophysics using a 3D inversion modelling technique to better understand how the magnetic signature varied with depth.  The results indicate that there is a considerable 'root' to the Mihanza Hill ultramafic outcrop, which points to a large volume of rock that could have positive implications for the differentiation of nickel sulphide rich magmas and provides a large volume of nickel prospective target rock at this location. 

Follow up soil sampling has since been undertaken in the central part of the HIUC, the results of which were announced by Katoro on 20 May 2019.  This extended the strike length of previously identified high priority areas and the findings have been utilised to inform planning for a proposed drill programme.  Furthermore, it also identified a new, previously unidentified exploration target. 

Following further review of the accumulated work undertaken, the next step is to implement a drill programme for nickel sulphide at two of the Project's key targets: Mihanza Hill and Mwaka Hill.  Planning for this drill programme, the commencement of which would be subject to securing additional funding, is underway.

Gold

Greenstone gold potential has been demonstrated in the western part of the Project, where there is on-going extensive artisanal gold mining in an area proximal to Shanta Mining's circa 0.7 million-ounce Singida Project (located approximately 10 kilometres to the west of the Project).

Greenstone hosted gold mineralisation is host to many of the World's largest gold mines and more locally is found at Tanzania's major gold mines such as Bulyanhulu and Geita located north of Haneti in the Lake Victoria Greenstone Belt.

The next phase of work will be to identify priority target sub- areas for detailed exploration within the large gold prospective area on the Project through initial geophysical interpretation studies.

Nickel Laterite

Nickel mineralisation is found from the weathered products of the HIUC in the form of oxide mineralisation known as nickel laterites on the central hill outcrops of the HIUC where there is active artisanal mining for the semi-precious nickel mineral, chrysoprase. The Project's potential to host economic quantities of nickel as nickel laterites has not been fully evaluated from exploration to date. The potential of Tanzania to host nickel laterites is already clearly demonstrated by the Dutwa project in northern Tanzania which contains an estimated 107 million tonnes at 0.9% nickel.

Further work to evaluate the nickel laterite potential would comprise drilling across the known laterite areas on the Project to characterise the depth, composition, grade and tonnage present.

Lithium, Tantalum, Niobium & REEs

Lithium, tantalum, niobium and REE mineralisation can associated with the final stages of granite intrusions solidifying as linear bodies of rocks known as pegmatites.

The potential for this style of mineralisation demonstrated by the identification of host pegmatites in the region where a surface sample at one location returned a geochemical analysis result of 2.6% lithium and strongly anomalous results in niobium and tantalum. The grades from this sample are at potentially economic values contingent on sufficient ore tonnages of similar grades being discoverable.

The next phase of work here would be to identify the extent of the prospective pegmatite rocks on the project and their potential through mapping, trenching/sampling and ultimately drilling."

End of Extract

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc
Paul Johnson (Chief Executive Officer)	[phone]
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat	[phone]

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                                    [phone]

Notes to Editors:

Power Metal Resources plc (LON:POW) is an AIM listed African focused metals exploration and development company exploring for the key metals used in power generation, transmission, storage and utilisation. The Board and team of advisors, who have proven expertise in exploration, mining and project generation, have identified an opportunity to utilise the Company's position to become a leader in the London market for investors to gain exposure to the power metal commodity suite, particularly cobalt, lithium, copper and nickel. 

 

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