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Botswana Metals Has Cash Flow Potential With Joint Venture Partner

Botswana Metals (ASX:BML) strategically located tenements have the potential for cash flow in less than a year, as joint venture partner and local nickel mining and smelting company BCL Limited (BCL) is running out of ore.

The longevity of the BCL mine is dependent on additional ore outside of its existing nickel resources being made available.

Botswana Metals is in a prime position to potentially provide this ore to the BCL mine and smelter.

BCL is wholly-owned by the Botswanan government, commencing operations in 1959, and is now one of the largest private sector employers within the country.

There are three Prospecting Licenses (PLs) under the joint venture agreement that cover 180 square kilometres of Botswana Metals 1000 square kilometre exploration portfolio.

The joint venture area covers three known mineralisation zones.

Botswana Metals strategic location

The opportunity for Botswana Metals arises from its Maibele North project, which is located just 55 kilometres from BCL's smelter, and therefore ore is located within a relatively inexpensive trucking distance.

Maibele North hosts nickel and copper, and newsflow is set to ramp-up with independent consultants MSA of South Africa set to provide a JORC 2012 resources estimate in early April 2015.

MSA will then work on a Scoping Study for Maibele North, and to follow Botswana Metals will then target having a mining license in place by the end of the year.

With Maibele North hosting the same geology and mineralisation as BCL is currently mining, and the companies working together as joint venture partners, Botswana Metals has a potential pathway to monetising its projects.

Maibele North could be just the beginning, with BCL ramping up exploration of recently identified targets, which could add further ore deposits in the near to medium term.

Joint venture details

BCL under the joint venture agreement can spend an initial A$4 million on a drilling program to earn 40% of Maibele North (PL 110/94), Mokoswane (PL 111/94) and Takane (PL 54/98).

BCL has the option to continue to fund the projects to the completion of a Bankable Feasibility Study to earn a 70% interest.

At that point BCL will have the off-take rights at commercial prices, to any ore mined.

It is planned to truck ore to the BCL smelter operations at Selebi Phikwe for processing, which is situated 55 kilometres to the southwest of our projects.

Botswana Metals will retain a 30% interest after the BFS is completed, at which time the management of the projects will be transferred to BCL.

Priority targets identified by BCL

At Takane, Botswana Metals in 2010 and 2011 conducted a VTEM, with BCL now having completed a soil sampling program, which identified nickel and copper anomalies on a hand-held XRF.

BCL were encouraged with the results of the recent mapping and soil program.

As a result BCL approved funding for 50 line kilometres of ground Time Domain Electro-Magnetic (TDEM) survey and 100 line kilometres of ground magnetics over four nickel and copper VTEM targets.

The geophysical results will be analysed to determine and select potential drill targets in this virtually unexplored region.

If drilling is successful in finding mineralisation, then this area will be declared a new exploration province located in the eastern part of Botswana extending from the well-known Limpopo belt in Zimbabwe where many discoveries have been made.

Analysis

Botswana Metals joint venture with BCL Limited could be company making, and with BCL needing ore, the agreement between the two companies de-risks Botswana Metals.

The longevity of the BCL mine is dependent on additional ore outside of its existing nickel resources being made available, andBotswana Metals has the potential to fill this gap from nearby resources.

The first resource which could get monetised within a year is Maibele North project, which is located just 55 kilometres from BCL's smelter.

Maibele North hosts nickel and copper, and news flow is set to ramp-up with independent consultants MSA of South Africa set to provide a JORC 2012 resources estimate in early April 2015.

MSA will then work on a Scoping Study for Maibele North, and to follow Botswana Metals will then target having a mining license in place by the end of the year.

Botswana Metals currently has a light capitalisation of $9 million.

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