LONDON (ShareCast) - (Sharecast News) - Metals exploration and development company Power Metal Resources announced the conditional acquisition of a 51% interest in the "highly prospective" Ditau Project in Botswana on Wednesday.
The AIM-traded firm said that, subject to due diligence, it would acquire 51% of the Ditau Project from Kavango Resources for ?0.15m, payable through the issue of 35,714,286 new ordinary shares at a price of 0.42p each.

It said the acquisition's due diligence period would be 30 days, starting from the removal of Covid-19 coronavirus-related international travel and work restrictions, or 1 September, whichever is earlier.

The company described the "highly prospective" Ditau Project as targeting the discovery of commercial deposits of rare earth elements.

It said 10 geophysical 'ring structures' had been identified at Ditau, including one seven-by-five kilometre magnetic anomaly, which were "potentially related" to carbonatite magmatism, being the primary source of niobium and rare earth elements.

On completion, Power Metals would become the operator of Ditau, and would confirm a new project work programme.

In addition, it said it had invested ?38,000 in Kavango via a convertible loan note, with a term to 31 March 2021.

The note is convertible into new ordinary shares in Kavango at a price of 0.8p each, with each conversion share coming with an attached warrant to subscribe for an additional new Kavango share at a price of 1p each, with a three-year life to expiry, and a further early conversion warrant at 2.5p.

"Power Metal Resources is building a portfolio of potentially exciting opportunities, with the conditional acquisition of the Ditau Project offering a great deal of promise," said chief executive officer Paul Johnson.

"The Power Metal team has a strong connection with research leaders in the area of carbonatite geology, and we believe that know-how, when applied to the extensive information gathered by Kavango to date, will make a significant difference.

"Not only can we help augment the forward direction for the Ditau Project, but also open up new commercial avenues for a more rapid project advancement."

At 1444 BST, shares in Power Metal Resources were up 19.05% at 0.25p.

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