Power Metal Resources (LSE:POW) inched up to 0.54p on Tuesday after updating investors on the strong ground operation progress being made at the Molopo Farms Complex (MFC) project in Botswana.

The business said that Kalahari Key, owner of the nickel, copper, and platinum group metals project, has largely completed ground geophysics work to identify priority drill targets for the next stage of exploration. The work follows a high-resolution EM and magnetic survey completed in May last year that identified 17 conductor targets within the project’s feeder/shear zone.

Kalahari Key expects to complete its ground geophysics work by early August, with results interpretation expected to commence shortly thereafter. A full update will be provided to the market detailing the outcome of the ground geophysics and the priority drill targets upon completion.

Power Metal’s exposure and interest in MFC comes through its 18.26pc position in Kalahari Key. The business also has the right by 31 December this year to earn-in to a 40pc direct interest in the project by committing to spending $500,000 on its development by 31 December 2020. If it chooses to exercise this option, then it will hold a 50.96pc effective economic interest in MFC.

Paul Johnson, executive director of Power Metal, said he was ‘impressed’ by the pace at which Kalahari Key is advancing exploration at MFC, adding:

‘This important groundwork is designed to initially follow up 11 areas within the 17 conductor targets identified from the helicopter Electromagnetic ("EM") Survey and narrow down to a number of high-profile drill targets. In this region mineral deposits are under sand cover with no surface expression so the application of high-resolution geophysics is vital in identifying the most attractive drill locations.

‘I am hugely excited by the opportunity the MFC project presents for our shareholders, both through the POW 18.26% shareholding in Kalahari Key and the potential for the Company to earn in to a 40% direct project interest. Consequently, we await with some excitement the outcome of the ground geophysics programme and the important results interpretation.’

MFC consists of three exploration licences spanning 2,725km2 in southern Botswana. Kalahari Key’s primary target is nickel and platinum mineralisation in the geophysically-delineated, major shear/feeder zone through the centre of the MFC. The business will also seek to identify massive or disseminated nickel sulphide deposits at the base of, or within the ultramafic zone of the MFC moving forward. To read our recent report on Power Metals’ deal with Kalahari Key and the opportunities offered by the MFC project, please click here.

Tuesday’s news comes just a day after Katoro Gold (LSE:KAT) confirmed third-party interest and expanded exploration plans for two of its gold projects in northern Tanzania. The £1.92m business said that it had received expressions of interest around a purchase of - or joint venture agreement on - its Imweru and Lubando gold projects in the Lake Victoria Goldfields.  Although no suitable agreement has yet been made, Katoro said the interest shows a ‘clear appreciation of the inherent value’ of the projects, which have a combined JORC-compliant gold resource of 754,980oz.

With gold prices rising and a recent review confirming exploration upside potential at both Imweru and Lubando, Katoro said the best way to create near-term value would be to build the projects’ resource inventory. Indeed, it is targeting an initial target of 1MMozs of gold across both sites, an increase of nearly a third on existing resources.

Power Metal owns a 5.95pc stake in Katoro as well as a 25pc direct interest in the firm’s Haneti Nickel project. Based in Central Tanzania, Haneti is a nickel sulphide project made up of near-contiguous tenements covering around 5,000km 2 of land. Much of the project lies on top of a highly-prospective belt of rocks called the Haneti-Itsio Ultramafic Complex (HIUC), which is made up of metamorphosed ultrabasic rocks like dunite and peridotite called serpentinites.

Author: Daniel Flynn

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