Evrima Plc Update on Investee Company

 
TIDMEVA 
 
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. 
 
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. 
 
 Shareholder   Shares held Pre-Conditional    As a % of       Following 
                 Power Metal Transaction    Kalahari Key  Acquisition as a % 
                                                           of Kalahari Key 
 
    Evrima plc         3,802 Shares            14.88%           8.93% 
 
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). 
 
                                   - Ends - 
 
Enquiries : 
 
Company: 
Burns Singh Tennent-Bhohi (CEO & Director): [e-mail] 
 
Simon Grant-Rennick (Executive Chairman): [e-mail] 
 
Novum Securities Limited (AQSE Corporate Adviser): 
 
David Coffman / Lucy Bowden: + 44 (0) 20 7399 9400 
 
Peterhouse Capital Limited (Corporate Stockbroker): 
 
 
Lucy Williams: [phone] 
Duncan Vasey: [phone] (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, 4th December 2023 [please refer to press release here]. 
 
               Evrima plc - Kalahari Key Share Purchases to Date 
 
                             Consideration              Equity 
                   Shares     Paid (Cash/     Cash   Consideration 
                 Purchased      Equity)      (USD)    (AQSE: EVA) 
 
July 2018           288     Cash            $14,976 
                            Subscription 
 
April 2019          182     Cash            $10,010 
                            Subscription 
 
November 2020      3,332    Equity Swap     $0         2,300,000 
 
Total              3,802 
 
Total Cash Cost                             $24,986 
 
Total Equity                                           £138,000 
Cost 
 
Equity                                                 2,300,000 
Consideration 
 
Consideration as                                         5.83% 
% of Share 
Capital 
 
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. 
 
  * Assay results confirm Ni grades for pentlandite-bearing university 
    mineralogical samples: 
      + IMK-05139 (0.44m pyroxenite sample from 310m down-hole depth) assayed 
        at 6,999ppm Ni (0.70% Ni) from a primary magmatic, pentlandite-bearing, 
        assemblage. 
      + IMK-05149 (0.58m pyroxenite sample from 295m down-hole depth) assayed 
        at 6,606ppm Ni (0.66% Ni) 

      + IMK-05153 (0.54m pyroxenite sample from 297m down-hole depth) assayed 
        at 2,244ppm Ni (0.22% Ni) 
      + Both IMK-05149 and IMK-05153 contained primary pentlandite within 
        predominant secondary nickel sulphides, arsenides and alloys. 
 
 
 
END 
 
 

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May 26, 2022 02:00 ET (06:00 GMT)