Battery metal exploration and development company African Battery Metals (ABM) has entered a share acquisition and earn-in agreement with Kalahari Key Mineral Exploration for nickel and platinum group metals (PGMs) in Botswana.
Under the terms of the agreement, ABM has acquired an 18.26% stake in Kalahari Key, an exploration company in Botswana with a 100% interest in the Molopo Farms Complex (MFC) project in south-west Botswana, for a total consideration of $194,810.
By 31 December 2019, ABM is also expected to opt for an earn-in to a 40% direct project interest in the MFC Project by spending $500,000 by 31 December 2020 on ground exploration, primarily for the completion of drilling of four targets at the MFC Project.
After completion of the earn-in expenditure requirement, ABM will hold an interest of 50.96% in the MFC Project through its 18.26% shareholding in Kalahari Key and a 40% direct interest in the MFC Project.
It will also have representation on the MFC Project operating committee and the board of Kalahari Key.
The MFC Project consists of three exploration licences, covering 2,725km² for nickel, PGM and copper ores.
A recently conducted helicopter-borne electromagnetic and magnetic survey by Kalahari Key using Xcite System from New Resolution Geophysics has identified 17 zones for ground exploration follow-up.
Kalahari Key had acquired two mineral exploration licences (PL310/2016 and PL311/2016) from the Botswana government in November 2016 covering parts of the Bushveld-related Molopo Farms Complex in southern Botswana, and a third licence (PL202/2018) in 2018 to the south of PL311/2016.
For the initial 18.26% interest in Kalahari Key, ABM has acquired 3,157 new ordinary shares in Kalahari Key at $55 per share for cash consideration of $173,635. Under the agreement, at least 75% of the new working capital should be invested in ground operations at the MFC Project.
ABM has also acquired 385 existing ordinary shares in Kalahari Key from Value Generation for $55 per share for cash consideration of $21,175. It has acquired 3,542 shares for a total acquisition cost of $194,810, which will be met from existing cash resources and hold an 18.26% stake in Kalahari Key.
African Battery Metals will also have the right to maintain its percentage holding in future Kalahari Key deals.
After ABM enters into the earn-in, a joint venture agreement will be signed, which will determine strategy, operational management and corporate structuring.