Kavango Resources PLC (LSE:KAV, OTC:KVGOF) is looking to strengthen its position in the copper belt in Botswana through two separate deals.
The junior has taken out an option to acquire 85.2% of Kalahari Key Mineral Exploration (KKME), which owns the Molopo Farms Project (MFP).
Power Metal Resources PLC (AIM:POW) has an effective 40% project in the MFP, which it will convert into equity on a pro-rated basis in KKME should the proposed acquisition be completed.
On the deal's conclusion, Kavango would hold an interest of between 50.74% and 51.15% in KKME, Evrima Plc (currently a shareholder in KKME) would hold between 9.26% and 8.86% of KKME and Power Metal would own the remaining 40%.
Kavango will also undertake a work programme on MFP to start immediately to determine whether or not to exercise its option and will issue shares to KKME's vendors worth £1.375mln plus matching warrants if it decides to go ahead.
Ben Turney, Kavango's chief executive, said: "Our vision is to build a world-class minerals exploration firm in Botswana. Our business model is based on making multiple, large-scale metal discoveries, which we can sell to major international mining firms.
"The next important element in our strategy is to have a pipeline of high-quality projects we can acquire or earn into. In this respect, Molopo Farms could be a perfect fit. The fact that our close strategic partners, Power Metal Resources and Spectral Geophysics, are already heavily involved is potentially a big advantage. We look forward to working with Evrima too.
"The terms of the deal are also appealing. An all-share transaction makes sound commercial sense, enabling us to preserve cash resources to use in the field. The structure of the Work Programme Option, means we can immediately start moving the project forward, while also performing detailed due diligence,"
Separately, Kavango said it will also speed up its acquisition of a 90% stake in the LVR Joint Venture in the Kalahari Copper Belt (KCB), also in Botswana.
The venture covers 1,091sq km of prospective ground and currently Kavango has a pre-agreed spending programme in place to take its holding up to 90%.
Recent exploration however has increased its confidence in the project, Kavango said, and it has now signed an MoU to take its stake to 90% immediately through the issue of 2mln shares to its JV partner at a price of 5.5p
Kavango will also issue 2mln warrants to its partner, exercisable at 8.5p.
Turney said: "The LVR JV is perhaps our "forgotten" project. However, this does not reflect the exploration potential of the two prospecting licences held within it. PL082 is particularly encouraging, with what appears to be a conductor target, analogous with the Banana Zone deposit on the other side of Ghanzi Ridge.
“To simplify the JV arrangement and accelerate our direct 90% direct interest in the joint venture, we made an offer to LVR GeoExplorers.”