Power Metal Resources soars on plans to acquire controlling interest in Ditau rare earths project
The explorer said that it will fund the acquisition through the issue of around 35.7mln new shares at a price of 0.42p each, a 100% premium to its Tuesday closing price.
In a statement, Power Metal noted that the “highly prospective” Ditau project is targeting the discovery of commercial deposits of rare earth elements (REE).
It said due diligence for the acquisition will begin following the removal of coronavirus-related international travel and work restrictions, or 1 September, with Power Metals to become operator of the project following the purchase.
The company added that it has also invested £38,000 into Kavango through a convertible loan note.
“POW 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 Paul Johnson.
“The POW 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”, he added.
The company’s shares soared 46.9% to 0.31p in mid-morning trading on Wednesday.
–Adds share price–