Power Metal Resources plc has made a further investment in Kalahari Key Mineral Exploration (Pty) Ltd in their nickel sulphide and platinum-group metal (PGM) mineralisation project in Botswana.
Kalahari Key holds 100% of the Molopo Farms Complex (MFC) project and Power Metal earns into a 40% interest by funding $500,000 exploration expenditure in 2020. Power Metal also has a 18.26% share in Kalahari Key.
The junior metals miner said that Kalahari Key had undertaken a rights issue to raise money from existing shareholders.
Power Metal has given notice to Kalahari Key that it would take up its rights to maintain, as a minimum, its 18.26% holding in Kalahari Key.
The rights issue was undertaken at $55 per ordinary share in Kalahari Key and Power Metal has subscribed for 1,771 Kalahari Key shares for a cash cost of $97,405.
The cost of this participation is fully funded from existing Power Metal cash resources.
Power Metal added that assuming a Power Metal holding in Kalahari Key post rights issue of 18.26%, upon completion of the earn-in, it would have an effective economic interest of 50.96% in the MFC project.
KEY PROJECT
Chief executive Paul Johnson said that the company was increasingly excited by the MFC project and its potential for a transformational discovery.
“It was clear that Power Metal should participate in the modest financing undertaken through the rights issue by Kalahari Key and the amount expended of US$97,405 (circa £75,250) is comfortably afforded from existing Power Metal working capital of approximately £1,700,000 (comprising cash and listed investments only).
“This investment in one of our key projects, alongside other initiatives announced recently, are possible because of the strong financial position of Power Metal, aided recently by the incoming cash from the exercise of warrants.
“As warrant exercise monies are received by Power Metal they bolster underlying working capital, but notably enable us to innovate and do more. This is a pattern of business growth and advancement we intend to continue.”