Power Metal Resources PLC supports new holding company for the Molopo Farms

PLC () said a new company is to be created to advance the Molopo Farms Complex (MFC) in Botswana.

As previously announced, the AIM-listed metals exploration and development company has a 40% direct interest in the MFC project, which is targeting prospective magmatic intrusion-hosted massive nickel sulphide and platinum-group element (PGE) mineralisation. The other 60% of the project is owned by Kalahari Key Mineral Exploration.

Power Metal said it intends to retain ownership of its 40% interest in the MFC project at present and to reflect the new ownership structure several steps are planned.

1. Kalahari Key will remain a single project holding company and continue to manage the MFC project, and a new local board will be established including at least one director from Power Metal.
2. The share capital of Kalahari Key will be restructured to reflect a new ownership structure for the MFC project with 60% of Kalahari Key shares held by existing Kalahari Key shareholders and 40% of shares held by Power Metal.
3. The above 60% Kalahari Key shareholding will be held through a newly formed UK publicly listed company (PLC) in which existing Kalahari Key shareholders (including Power Metal) will have the same percentage ownership interest as currently held in Kalahari Key.

The plan is for this new PLC to be listed on a recognised stock exchange in London this year, where it will be “a proactive resource exploration vehicle”.

Power Metal said the new company’s operations will principally include the advancement of the MFC project and the acquisition of additional opportunities, with a focus on Botswana.

Currently, Power Metal holds 18% of Kalahari Key and therefore with its 40% direct project interest has an overall effective economic interest in the MFC project of 50.8%.

Following the restructuring and upon settlement of the Kalahari Key rights issue in which Power Metal has participated the company will hold 21.7% of the new PLC, meaning its overall effective economic interest in the MFC project will increase to 53.02%.

“The decision to create a new UK PLC to hold the remaining 60% interest in the MFC project is an important step. We believe the planned UK listing will enable fuller recognition of the MFC project’s value, particularly given the notable exploration success already achieved and the level of interest being shown in the project,” said Paul Johnson, the chief executive of Power Metal.

“For Power Metal we are pleased to support the listing of the new vehicle, which will enable our holding in Kalahari Key to have demonstrable value, further building our working capital with additional listed equity.

“In the interim, we continue to push on with technical work at the MFC project and further updates are anticipated in the near term,” he added.

Shares in Power Metal were 2.9% higher at 2.45p in early deals.