Power Metal Resources Plc (LON:POW) told investors that it has now converted its loan notes in Kavango Resources PLC (LON:KAV).
The company converted its entire £38,000 loan note holding into 4.75mln shares priced at 0.8p each. It realises a 2.46% shareholding in Kavango.
The move follows a deal agreed in April that will see Power Metal Resources acquire a controlling 51% stake in Kavango’s Ditau rare earths project in Botswana.
READ: Power Metal soars deal to acquire Ditau control
"The share price of Kavango has moved up a little since the April 2020 transaction which is positive, however, we remain of the view that the market has yet to fully appreciate the size and potential of their projects in Botswana, which is a superb jurisdiction for resource exploration juniors. We will continue to watch the wider Kavango story unfold whilst working on Ditau Camp project due diligence," Paul Johnson, Power Metal's chief executive said in a statement.
Under the terms of the prior loan note agreement, Power Metal Resources will be issued with warrants for a further 4.75mln Kavango shares with an exercise price of 1p.
The company noted that its technical team, meanwhile, continues to work with Kavango in relation to the acquisition of the stake in the Ditau Camp project.