LONDON, UK; Kavango Resources plc (LON:KAV) has entered an exclusive, three month option to acquire 85.23% of Kalahari Key Mineral Exploration Proprietary Limited (KKME) in a proposed all share-transaction.
Kavango can exercise the option at its sole discretion.
Kalahari Key Mineral Exploration Proprietary Limited (KKME) is a privately owned company, which currently owns 100% of prospecting licences PL310/2016, PL311/2016 and PL202/2018 in Botswana, collectively known as the “Molopo Farms Project” (MFP).
KKME holds no other interests and is debt free. Power Metal Resources has an effective 40% project in the MFP, which it will convert into equity on a pro-rated basis in KKME should the Proposed Acquisition complete.
Following the proposed acquisition, Kavango Resources would hold an interest of between 50.74% and 51.15% in KKME, Evrima Plc would hold between 9.26% and 8.86% of KKME and Power Metal would own the remaining 40%.
Power Metal and Evrima intend to retain their shares in KKME and will continue as project partners. Kavango would be the operator.
Rather than pay an option fee, Kavango will complete a work programme on the MFP. This will enable the Company to complete technical due diligence, including fieldwork, prior to deciding whether to exercise the Option. As part of the Work Programme, Kavango will perform a review of all geological and geophysical data gathered from previous exploration of the MFP.
Ben Turney, CEO of Kavango Resources, commented: “Our vision is to build a world-class minerals exploration firm in Botswana. Our business model is based on making multiple, large-scale metal discoveries, which we can sell to major international mining firms.
Over the course of this year we’ve recruited senior technical staff, deployed the latest technologies into the field, invested heavily in our local operations and significantly increased exploration activity. The Kavango team has now put in place a strong foundation, upon which we can confidently grow the company.
The next important element in our strategy is to have a pipeline of high-quality projects we can acquire or earn into. In this respect, Molopo Farms could be a perfect fit. The fact that our close strategic partners, Power Metal Resources and Spectral Geophysics, are already heavily involved is potentially a big advantage. We look forward to working with Evrima too.
The terms of the deal are also appealing. An all-share transaction makes sound commercial sense, enabling us to preserve cash resources to use in the field. The structure of the Work Programme Option, means we can immediately start moving the project forward, while also performing detailed due diligence,
I look forward to reporting on our progress.”
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