"After a period of considerable support from Power Metal Resources, we are now in a position to regain complete ownership of our crucial prospecting licences in the Kalahari Copper Belt and at Ditau. On completion of the transaction, Kavango will become one of the largest landholders for copper exploration in Botswana," Kavango's CEO Ben Turney said.
The terms of the proposed agreement sees Kavango issuing 60 million shares to Power Metal at 3p each, valued at £1.8 million (US$2.16 million).
It's also to include 30 million warrants at 4.25p and 30 million warrants at 5.5p. And the issue of 15 million variable price warrants with a minimum price of 3p and actual price at a 15% discount to the volume weighted average share price for six months.
Should all variable price warrants be exercised within the six months, Power Metal is to receive 15 million replacement warrants on the same terms and with a 12-month life.
Power Metal is also to receive a 1% Net Smelter Return royalty across all Kanye licence areas as they currently stand.
"The crystallization of value from various Power Metal interests is a process we expect to continue. In doing so, we increase the financial strength of the company which will allow us to build a valuable and diverse portfolio of financial assets focused on the natural resource sector," Power Metal CEO Paul Johnson said.
Turney noted that Kavango now has near-complete control of 16,000km2 of "highly prospective" ground in Botswana.
Kavango's share price last closed at 1.78p. Power Metal's share price was 0.88p.
