Power Metal Resources (LSE:POW) has started on-site operations at its wholly owned Tati Gold Project in Botswana following receipt of environmental approval and completion of land access agreements.

The project, located within the Tati Greenstone Belt near Francistown, is being advanced under a share option agreement with Tuscan Holding.

Under the arrangement, Tuscan is responsible for funding and managing exploration, evaluation and feasibility activities relating to licence PL049/2022.

Initial drilling targets mineralisation below oxidised zone

The initial programme will use rotary air blast drilling to test mineralisation beneath the oxidised zone and collect representative geological data.

Subsequent drilling is planned down dip and along strike to assess the geometry and lateral extent of the mineralised body.

Data generated from the programme is intended to contribute to a desktop feasibility study assessing the potential for small-scale mining at the Cherished Hope target.

Drone-based environmental and terrain surveys are also planned to provide information for preliminary mine design work.

Tuscan can earn 75% interest in licence

Under the option agreement, Tuscan will fully fund and manage the exploration, evaluation and feasibility work associated with PL049/2022.

Tuscan may earn a 75% interest in the licence if it funds construction of the processing plant and associated mine infrastructure.

If those conditions are met, Power Metal would retain a 25% carried interest through to production.

The arrangement limits Power Metal’s direct funding requirements for the work programme covered by the agreement.

Power Metal retains other Tati licences

Power Metal continues to hold 100% ownership of the remaining licences within its Tati portfolio that are not covered by the Tuscan arrangement.

The company would retain exposure to potential future cash flows and dividends from any production arising from its carried interest in PL049/2022, subject to the project reaching production and the terms of the agreement being fulfilled.

The current programme is intended to provide information for evaluating whether the Cherished Hope target could support a small-scale mining operation.

Power Metal operates project incubation model

Power Metal Resources PLC is a London-listed metals exploration company with projects covering precious, base and strategic metals.

Its portfolio includes projects in North America, Africa, Saudi Arabia, Oman and Australia.

The company’s project model includes internally funded exploration and strategic joint ventures, with assets potentially advanced towards disposal, separate listings or production-related interests.