Kibo Mining PLC (LON:KIBO) has shuffled its Haneti nickel project in Tanzania between subsidiaries to create a clear distinction between its mining and power operations.
Katoro Gold PLC (LON:KIBO), majority owned by Kibo, will acquire Haneti for £200,000 in shares.
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Kibo will also retain a net royalty of 2% over anything produced from the nickel property.
Louis Coetzee, Kibo's chief executive said, Kibo is now focused on becoming a major power player in Africa and Haneti would fit better within Katoro going forward.
“We are becoming a preferred development partner for strategic power projects in the region.
“Going forward, our full focus will be on developing our initial three energy projects."
Fundraising
Katoro will raise £325,000 through a placing at 1.3p to provide additional funding.
Kibo is to put up £75,000 of that and following the sale and placing will own 55.53% of Katoro.
Coetzee, who is Katoro's executive chairman, said: "Haneti is a highly prospective high-grade nickel sulphide asset and is a great addition to Katoro's portfolio.
Historic work has already yielded exceptional high grades of up to 13.59% nickel as well as discoveries of gold, cobalt and platinum and some significant lithium anomalies.
Demand for nickel from the electric vehicle sector is electric vehicle sector is currently approximately 36,000 tonnes and forecast to surge to 350,000-500,000 tonnes by 2025., he added.
Katoro has two gold projects in development - Imweru and Lubando - located in Lake Victoria Goldfields region of northern Tanzania.
Following the placing it will have cash of £705,000.