Botswana - Nickel Sulphide Targets Confirmed

RNS Number : 3293O

Power Metal Resources PLC

01 October 2019

 

01 October 2019

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

Botswana - Nickel Sulphide Targets Confirmed

Power Metal Resources plc (LON:POW) the AIM listed African focused metals exploration and development company is pleased to announce that nickel sulphide targets have been confirmed from an interpretation of the ground geophysics undertaken by Kalahari Key Mineral Exploration Pty Ltd ("Kalahari Key" or "KKME") at the Molopo Farms Complex project in Botswana ("MFC" or the "MFC Project").

The MFC Project consists of licenses covering an area of 2,725 square kilometres that are considered prospective for Nickel-Copper-PGMs mineralisation and is 100% owned by Kalahari Key.

Power Metal Resources has an 18.26% shareholding in Kalahari Key and also has a right by 31 December 2019 to elect to earn into a 40% direct project interest in the MFC project by investing US$500,000 in the Project by 31 December 2020 (the "Earn-in"). 

Should the Company elect to Earn In, Power Metal Resources will hold an effective economic interest of 50.96% in the Project.

The Company's Kalahari Key acquisition agreement was announced on 13 May 2019 and readers can review this announcement through the following link:

https://www.powermetalresources.com/n/n104/acquisition-and-earn-in-agreement-botswana-project

Paul Johnson, Executive Director of Power Metal Resources plc commented: "I am delighted that our shareholders have exposure to the Kalahari Key opportunity and, potentially in the near term, to the upside potential that comes with drilling for massive nickel sulphides.

Drilling carries risk and the outcome is always uncertain, but the opportunity is immense, for if the drilling of the MFC Project yields a nickel sulphide discovery, no matter the market conditions, the potential upside for all those interested in the project could be significant.

I have been here before as a director of other companies before the drilling of major targets; when the market doesn't quite gather the potential and my job is to engage the market with the opportunity before us. 

It is far easier to engage post discovery than pre-drilling, but I will over the coming months make it my task to ensure that investors cannot say, should we make a nickel sulphide discovery, that they were not adequately informed of the possibility.

I remain fascinated by the Kalahari Key opportunity and intrigued as to what might lie beneath the drill locations.  I am equally keen to work with the Kalahari Key team to determine and implement the project development pathway.  We look forward to keeping shareholders updated in this regard."

Highlights:

·    The helicopter-borne electro magnetic ("EM") survey over the Molopo Farms Feeder Zone project area, was extremely successful in delineating targets for potential nickel sulphide exploration;

·    The targets identified were followed up with ground EM surveys utilising B field sensors (Supracon Jesse Deep SQUID ("Super Conducting Quantum Interference Device")), with high power transmitters ("HPTX"), which greatly enhance depth penetration and definition and discrimination of target conductors;

·    Several discrete, highly conductive bodies were detected that can be classified as close to super-conductors;

·    The identified conductors can possibly be massive nickel sulphides due to the spatial location, particular geological setting and associated magnetic response;

·    8 drill holes have been designed to intersect the 6 highest priority targets;

·    Kalahari Key will shortly appoint consultants to implement the necessary environmental surveys and to conduct the statutory consultations with landowners and other stakeholders prior to any decision to undertake drilling;

·    Kalahari Key are also liaising with various drilling contractors with regard to the potential drill programme;

·    POW directors are working with Kalahari Key to review the information gathered from the technical geophysics report, implementation of the above steps and to agree a pathway forward;

·    Further updates to shareholders will be provided at the earliest opportunity.

FURTHER INFORMATION - GROUND SQUID TDEM INVESTIGATION OF SELECTED HELICOPTER AIRBORNE TDEM (EXCITETM) ANOMALIES

The information below is extracted from the full technical report prepared by Cas Lotter of Spectral Geophysics in Gaborone International Business Park, Gaborone, Botswana.

The full report will be uploaded to the Kalahari Key website shortly.

Executive Summary

"Eleven conductor targets generated from a combined helicopter borne XCITETM electromagnetic-magnetic survey, were followed up with ground electromagnetics, during the period June to August 2019. The targets are located within the ENE-WSW Jwaneng-Makopong Feeder/Shear Zone through the center of the Molopo Farms Complex (MFCFZ).

All the targets were covered with Time Domain Electromagnetic traverses using a highly sensitive SQUID sensor and ultra-powerful HPTX transmitter. Three orthogonal components of the B field were measured at stations 50m or 100m apart, along 200m spaced lines. All the airborne electromagnetic ("AEM") targets surveyed, except 1, were located on the ground, as well as additional conductors that were beyond the depth penetration capabilities of the AEM system employed. 

Nine targets were surveyed over Block 1 and two over Block 2 of the original AEM survey area. The responses of three of the targets over Block 1 and one of the targets over Block 2 were found to be dominated by IP effects, ie. the recorded responses cannot be due to massive sulphides. No or limited quantitative interpretation was done on these data sets.

Seven of the selected targets in Block 1 and two in Block 2, were quantitively analysed using plate models and/or 3D compact body inversion. The analysis confirmed the presence of at least six discrete, highly conductive bodies at depth - five in Block 1 and one in Block 2.

Eight exploration boreholes were designed, and relevant parameters calculated to intersect the highly conductive targets at depths ranging between 300m and 800m.

Conclusions and Recommendations

The NRGTM XCITETM helicopter-borne EM survey over the Molopo Farms Feeder Zone project area, was extremely successful in delineating targets for potential nickel sulphide exploration.

These targets were followed up with ground EM surveys utilising B field sensors (Supracon Jesse Deep SQUID), with high power transmitters (HPTX), which greatly enhance depth penetration and definition and discrimination of target conductors. 

Several discreet, highly conductive bodies were detected that can be classified as close to super-conductors. The identified conductors can possibly be massive nickel sulphides due to the spatial location, particular geological setting and associated magnetic response.

Borehole parameters are provided to intersect the highest priority targets and recommendations are made for further investigation of targets where warranted."

BACKGROUND TO KALAHARI KEY AND THE MFC PROJECT

Kalahari Key, registered in Botswana, is a mineral exploration and geological consultancy company that was established by Roger Key, Andy Moore, Simon Bate and Rick Bonner in November 2014.

In November 2016 the company acquired two mineral exploration licences (PL310/2016 and PL311/2016) from the Botswana Government.  The licences cover the eastern and central parts of a shear/feeder zone through the centre of the Bushveld-related Molopo Farms Complex in southern Botswana.  A third licence (PL202/2018) was acquired in early 2018 immediately to the south of PL311/2016.

The target mineralization is Ni-PGM in the shear/ feeder zone.  Re-processing and re-interpretation of existing high-resolution airborne magnetic data and regional gravity data was initially used to identify target areas.  Selected core from previous exploration programmes has also been examined to better understand the geology of the Complex.  

Towards the end of 2018, NRG^TM was contracted to complete a high-resolution helicopter airborne magnetic and Electro Magnetic survey over the feeder/shear zone using their Xcite ^TM methodology.  The preliminary analysis of the new geophysical data identified 17 conductor targets within the feeder/shear zone.

In mid-2019 a ground geophysics programme was undertaken. The system employed was the High-Power Electro-Magnetic ("HPEM") transmitter capable of transmitting up to 200A together with the ultra-sensitive Supracon Jesse-Deep SQUID ("superconducting quantum interference device ") sensor hooked up to the industry standard EMIT Smartem24 receiver.

Transmitter loops of approximately 1km by 1km were laid out using 35mm2 aluminium wire and lines (100 or 200m spacing) were surveyed at either 50m or 100m reading interval, depending on depth to target.  In total 11 loops were undertaken around 14 individual targets from the original helicopter EM Survey.

The data generated from the ground geophysics programme was reviewed in South Africa in August 2019 and 6 priority drill targets have been identified from which it is expected that 4 key targets will be the focus of a Phase 1 drilling programme.  A detailed technical report covering the ground geophysics programme and the priority drill targets is under preparation. 

In addition, measures are being undertaken to implement the necessary environmental survey work prior to drilling, and liaison with drilling contractors to ensure, subject to environmental approvals, that the appropriate drilling contractors are in place.

PROJECT LEVEL 40% EARN-IN TO THE MFC PROJECT

Not later than 31 December 2019 POW may elect, at its sole discretion, to earn-in to 40% of the MFC Project by entering into and then fulfilling a commitment to spend US$500,000 ("Committed Spend") during the period to 31 December 2020.

Upon POW entering into the Earn-in (or earlier with the agreement of all parties) an MFC Project operational committee (the "Committee") will be established comprising members Roger Key (Kalahari Key Director), Andrew Bell (POW Director) and Andrew Moore (Kalahari Key Director).  The Committee will determine the allocation of the Committed Spend and management of operational activities.  Upon completion of the Earn-in expenditure requirement POW will hold 40% of the MFC Project

The Committed Spend will be applied primarily to the completion of drilling of four targets at the MFC Project.

Also, upon POW entering into the Earn-in (or earlier if agreed by all parties) Paul Johnson (POW Director) will join the Board of Kalahari Key.

Neither the Committee members nor the existing or new directors of Kalahari Key will be remunerated for their services.

Also, upon the Company entering into the Earn-in, a Joint Venture Agreement will be established between the parties which will determine strategy, operational management and corporate structuring.  This will include the usual fund or dilute provisions unless an alternate structure is agreed by the parties.

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/ 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 nickel, copper and cobalt. 

 

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