28th May 2020 16:46
(Alliance News) - Katoro Gold PLC and Power Metal Resources PLC on Thursday said the option agreement for Power Metal to increase its interest in the Haneti polymetallic project in Tanzania has been further extended to the end of August.
Shares in Katoro were down 20% at 1.60 pence in London shortly before close. Power Metal's shares were up 1.4% at 0.36p.
Power Metal took at 25% interest in Haneti in may 2019 and had an option to take a further 10% stake through the payment of GP25,000 to Katoro to May 15, 2020. This was ten extended to may 31.
Katoro has since received approves for a possible earn-in, joint venture, or other similar structure for Haneti - largely focused on the project's nickel sulphide potential.
Katoro said it had become "apparent that to crystallise the interest shown into a potential commercial transaction, it is preferable, and possibly a requirement, for Katoro and [Power Metal] to restructure ownership of the project".
As such, the two companies have agreed to keep monitoring development of possible commercial transactions before reaching a final agreement. Thus, Power Metal's option to increase its holding to 35% has been extended to August 31 to give the two companies time for more discussions and for considering "all available options".
Katoro Executive Chair Louis Coetzee said: "Katoro is in a very busy and positive period at present, particularly in respect of our work on the Blyvoor gold tailings project. We have a good open dialogue with [Power Metal] and the extra time afforded by this extension gives both parties an opportunity to give due consideration to the interest of all stakeholders and to reach a suitable agreement in a controlled manner.
"Given the external interest shown in Haneti, both Katoro and [Power Metal] are willing and able to accelerate discussions should this become necessary."
Paul Johnson, chief executive at Power Metal, said: "The Haneti project is a significant opportunity, and it is important to structure ownership in a way that optimises the commercial pathway for the project. I look forward to providing a further update to the market in due course."
By Anna Farley; [email protected]
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