Power Metal Resources’ (LSE:POW) busy week continued on Thursday with the news that it had purchased an option to acquire a majority stake in a DRC-based copper-cobalt project.
The business has paid $5,000 for a 60-day exclusivity period over licence PR 13479, during which it will carry out legal and technical due diligence and prepare JV documentation. It will also complete a termite mound sampling programme to test cobalt mineralisation at a greater depth than the 27-30cm soil sampling depth.
If Power Metal decides to exercise its option, it will pay $50,000 to the licence’s current owner SCOMIS – a local Congolese firm – in exchange for a 70pc stake. The organisation would then pay a further $250,000 to SCOMIS once drilling begins.
PR 13470 covers around 3.5km2 in the Lualaba district of the DRC and is based some 5km north of the producing Tondo cobalt and copper mine owned by a Lerexcom. According to Power Metal, PR 13470 sits in the same geology as Tondo in a known cobalt-prospective area that is attracting increased exploration attention.
What’s more, early-stage soil sampling has already shown the presence of anomalous cobalt at 500-750 parts per million on the licence. One early sample was even found to contain more than 4pc of the metal by an x-ray fluorescence spectrometer. The area has also been found to contain dispersed sections or fragments of R2 mineralisation, a part of the Roan sequence that hosts much of Congo’s cobalt. Some of these sections are visible locally as elevated ridges.
Power Metal’s executive director Paul Johnson described the option as ‘very exciting’, adding that the company’s goal at the licence is to prove up a shallow, open-pittable, and high-grade resource.
‘This license is in a highly prospective area for copper-cobalt, near an existing mine, and is primarily a cobalt target. We are fortunate to have secured this option at an early stage when the presence of anomalous cobalt has already been proven. However, the shallow depth at which soil sampling has been carried out means the results derive from material where the mineralisation may have been reduced by weathering,’ added Johnson.
‘If we test deeper in the regolith, we may get results of higher tenor that show more of the potential of the License. Initially we propose to do this by termite mound sampling across the license. That may be followed by a small number of pit excavations to take us down to the bedrock, which we expect to encounter at about a depth of 10m.’
Thursday’s release came just a day after Power Metal revealed substantial ground operation progress 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 after that. 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 firm also has the right by 31 December this year to earn-in to a 40pc direct investment 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.
Meanwhile, on Monday, the business welcomed the news that Katoro Gold (LSE:KAT), in which it owns a 5.95pc stake, had received third-party interest in two of its gold projects in northern Tanzania.
Katoro said 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.
Power Metal also owns a 25pc direct interest in Katoro’s Haneti Nickel project, which can be increased to 35pc through a £25,000 cash payment. 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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