Power Metal Resources (LSE:POW) has reported that drilling is moving forward at its hugely prospective Molopo Farms Complex (MFC) project.

The AIM-listed metals explorer is targeting massive nickel sulphide and PGM mineralisation across the Botswana scheme.

Power Metal confirmed that a drill contract has now been signed with Discovery Drilling Contractors. This is the South African outfit instrumental in aiding the discovery of the nearby T3 copper project now owned by mid-tier Australian explorer Sandfire Resources (ASX:SFR).

Discovery has now started moving equipment onto site and drilling is expected to commence imminently. 

Power Metal’s phase one drilling is planned for 2,505m across four diamond core drill holes with target depths ranging from 525m to 710m. 

Earlier this year, the London explorer said that privately-held JV partner Kalahari Key Mineral Exploration Pty Ltd (“KKME”) had selected eight high-priority targets prospective for nickel, with four of the best selected for drill testing. 

Airborne and ground geophysics surveys have already demonstrated that all four show extension and increasing conductivity at depth, which implies that large nickel mineralisation is present. 

Power Metal has an 18.26% stake in KKME. It will earn-in a 40% direct interest in Molopo Farms by electing to spend US$500,000 (£371,025) on the drill campaign this year. 

All of this spending is already fully funded from a £700,000 December 2019 fundraise at 0.4p, and Power Metal has established a dedicated US dollar account for the earn-in drill costs. 

On completion, Power Metal will own a 50.96% economic interest in the project.

Investors are salivating at the prospect of what could be a set of monster results from Molopo Farms.  Power Metal shares surged to a two-year high of 1.43p in early September 2020. 

The complex as a whole straddles the southern border of Botswana and South Africa, and lies within the same province as Bushveld, which contains the world’s largest reserves of PGMs. 

Exploding mineral wealth discoveries across Botswana have driven hefty economic development in recent years, with the jurisdiction now marked as one of the safest in Africa. 

Chief executive Paul Johnson told the market in an RNS: “Maiden exploration drilling at the Molopo Farms Complex Project is a major event for Power Metal. Not least because our partners are targeting not just a possible large-scale metal opportunity, but a district scale opportunity.”

Nickel prices continue to rise as Covid has hit supplies worldwide, with inventories dwindling across the board. At the same time, demand is increasing for the valuable metal, as it has become a key component in building batteries for electric vehicles. 

Johnson added: “The build up to any exploration drill programme is a monumental affair for any junior exploration company. The Power Metal approach is one of relentless drive in the search for potential new large-scale metal discoveries.” 

“In part this is because we want to be proven right in our decision making,” the chief executive admitted, adding, “however we also seek the share price appreciation that comes with a major metal discovery.”

The Power Metal board owns 14% of company stock. This includes Chairman Andrew Bell of Red Rock Resources, with whom Power Metal have a JV for expansive exploration in the renewed goldrush district of Victoria, Australia. 

Author: Mark Sheridan

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