Power Metal Resources plc has signed a 75% share option over its 100% owned licence, containing the Cherished Hope gold mine, on the Tati Greenstone Belt, Botswana.
MINING
The agreement is between its local subsidiary Tati Greenstone Resources Pty Ltd (TGR) and Tuscan Holding Pty Ltd which is held by Medici Mining Investment LLC registered in Delaware, USA.
If Tuscan exercises the option, Power Metal will retain a 25% interest, free carried to production in prospecting licence 049/2022, acquired in 2022.
Power Metal intends that TGR will become a “material dividend paying entity from net cash flow generated from gold production”.
Power Metal retains the right to a 100% interest in its other TGR prospecting licences apart from PL049/2022.
Under the option terms, Tuscan has 730 days for prospecting, exploration and evaluation of PL049/2022.
It will also pay the costs including those for any drilling to establish a mineral resource for a feasibility study, and draft the study.
In order to exercise the option for 75% of TGR’s shares, Tuscan will also finance construction of and complete a processing plant and associated mine infrastructure to produce gold.
Power Metal retains 100% of its two remaining Tati licences PL126/2019 and PL127/2019.
The company added that TGR would be self-financed from its own cash flow from gold mining.
Chief executive Sean Wade said: “Tati is a very important project for us and it is great to be able to take it forward with a partner which is able to make such a substantial financial investment, giving Power shareholders a significant share of the upside without the additional cost.
“This further validates our successful business model and we look forward eagerly to the progress that we are confident this agreement will create.”