Evrima Plc – Update on Investee Company | #firefox | #chrome | #microsoftedge | #hacking | #aihp

26 May 2022

Evrima plc

AQSE: EVA

(“Evrima” or “the Company”)

Evrima elect to retain interest in Kalahari Key following Power Metal Resources conditional acquisition

The Company is pleased to provide an update on its investee company Kalahari Key Minerals Exploration Pty Limited (“Kalahari Key”). Following the conditional offer made to certain shareholders of Kalahari Key by Power Metal Resources PLC (“Power Metal”) (AIM: POW), the Company has elected to maintain its interest in Kalahari Key as a minority shareholder and conditional on the Power Metal acquisition closing, will be required to maintain their investment interest on a fund or dilute basis, the formula for which has been pre-determined and conditionally agreed to with Power Metal.

On 18 May 2022 Power Metal announced a conditional acquisition of certain of the Kalahari Key shareholders which if approved would result in 87.71% ownership of Kalahari Key.

The acquisition is conditional on a number of items, including but not limited to Power Metal receiving all in-country compliance and regulatory approvals to affect the change of ownership at Kalahari Key, post-acquisition.

Key terms of the acquisition include:

• Power Metal has signed a conditional agreement to acquire an additional 58.7% interest in the share capital of Kalahari Key.

• Power Metal to acquire a further 15,002 Kalahari Key shares for £807,348 payable through the issue of 46,134,171 new ordinary shares of 0.1 pence each in the Company (“Ordinary Shares”) shares at a price of 1.75p per new Ordinary Share.

• Following completion and a restructuring of the MFC Project interest Power Metal will hold 87.71% of Kalahari Key which will wholly own the Molopo Farms Complex Project on completion (an increase of approx. 35% from the current circa 53% MFC Project effective economic interest held by Power Metal).

• Power Metal will become operator of Kalahari Key with immediate effect and will look to accelerate exploration, including a next stage drill programme.

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Evrima will provide more information regarding the funding mechanism conditional on the closing of the Power Metal acquisition. The Company anticipates entering discussions with Power Metal to consider future exploration and development campaigns.

Subject to completion of the acquisition, which has the support of Kalahari Key shareholders, the Company will hold the following interest in, Kalahari Key on a pre-determined, fund or dilute formula.

Burns Singh Tennent-Bhohi, Chief Executive Officer commented,

“Evrima were one of the early investors in Kalahari Key in 2018. To date the Molopo Farms Complex has managed to attract capital investment to further its geological potential and at the forefront of this has been AIM-quoted, Power Metal. I am pleased to report on the development that would see Power Metal become the largest shareholder and operator at Kalahari Key conditional on the acquisition closing. Power Metal continues to prove its ability to acquire exciting projects concurrent with rapidly seeking to capitalise exploration campaigns.

The Board’s decision to retain its investment interest is one for which great consideration has been given. The Company are entirely cognisant of the varying risks associated with effectively passing on the opportunity to exchange an asset with a funding liability and dilutive risk for a liquid asset with a marketable value that can generate working capital for the Company, potential capital returns on consideration price and capital that can be used for re-investment purposes.

The original model that the founders were most excited by surrounded the potential to discover a feeder-styled deposit. The presence of that model has yet to be determined and if were to be would carry considerable value to the Company’s equity interest in Kalahari Key. The key analysis that drove the Board’s decision was centred around the perceived value at point of concluding the sale versus the internal analysis and optionality that the Company maintain in augmenting value in our equity position in Kalahari Key.

In 2020 we acquired, 17.2% of Kalahari Key from two of its founding shareholders as they sought optionality in the financial instrument, they held that provided them exposure to Kalahari Key, they chose Evrima. The two founders not only remain shareholders of Evrima but are Directors of Evrima investee, Eastport Ventures Inc. (Botswana), one a geologist and one a geophysicist with a combined >80 years’ experience in the sector.

I look forward to providing further updates in the near term as the Company continue to assess opportunities that have the ability to create value for our shareholders.”

The directors of Evrima accept responsibility for this announcement.

This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).

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Enquiries :

Company:
Burns Singh Tennent-Bhohi (CEO & Director): burns@evrimaplc.com

Simon Grant-Rennick (Executive Chairman): simon@evrimaplc.com

Novum Securities Limited (AQSE Corporate Adviser):

David Coffman / Lucy Bowden: + 44 (0) 20 7399 9400

Peterhouse Capital Limited (Corporate Stockbroker):

Lucy Williams: +44 (0) 20 7469 0930
Duncan Vasey: +44 (0) 20 7220 9797 (Direct)

About Kalahari Key

Kalahari Key is a private mineral exploration company registered in Botswana, engaged in the development of its Nickel-Copper-Platinum Group Metals (Ni-Cu-PGM) project called the Molopo Farms Complex (“MFC”). The Company is currently interested in 14.88% of the issued share capital of Kalahari Key.

In September 2020, the company already a minority shareholder of Kalahari Key (2.4% investment interest) engaged in commercial discussions with two of the four founders of Kalahari Key. The result of the discussions led to the company entering an option agreement with two of the four founders (“the grantors” or “the selling parties”) entitling Evrima plc a period to acquire a further 17.2% of Kalahari Key [please refer to press release here].

In November 2020, the company formally exercised their option to acquire a further 17.2% of Kalahari Key at a cost of £138,000 with the consideration satisfied through the issue of 2,300,000 new ordinary shares allotted at the price of £0.06 (six pence) per share (“Consideration Shares”). In addition to the Consideration Shares, the selling parties were awarded, 2,300,000 warrants over one further new ordinary share each in the capital of the Company at an exercise price of £0.12 (twelve pence) per share and a life to expiry of three years, 4^thDecember 2023 [please refer to press release here].

Evrima plc – Kalahari Key Share Purchases to Date

The Kalahari Key opportunity developed from a recognition that no historical exploration targeting “feeder” styles of Ni-Cu-PGE mineralisation had been completed within the Molopo Farms ultramafic complex. The founder’s group of four seasoned metals explorers identified a number of prospecting licences over a prospective geological feature often associated with feeder-style deposits.

In 2019, Kalahari Key entered a financing and earn-in agreement with AIM-quoted Power Metal Resources plc (AIM: POW). In 2019, Power Metal Resources owned 18.26% of KKME and elected to exercise an option granting it the right to earn a 40% direct project interest in the MFC by completing qualifying expenditures totalling US$500,000 by the end of 2020.

Power Metal satisfied the terms of its earn-in with Kalahari Key during 2020 with the maiden drill campaign being the central use of funds injected concurrent to the earn-in agreement.

In April 2021, Kalahari Key produced the following results from the campaign including;

Angled diamond drill hole KKME 1-6, downhole, significant Ni intersections include:

• 4.8m @ 0.2% Ni from 292.7m

• 4.1m @ 0.49% Ni from 309m, including 1.6m @ 0.72% Ni from 309.6m

• 16.7m @ 0.16% Ni from 501.8m

• 10.9m @ 0.13% Ni from 518.2m

• 3.4m @ 0.28% Ni from 594.4m

As drill core was selectively sent for sample analysis the reported mineralised intervals are considered to be open.