Power Metal Resources (POW) – Acquisition of Gold-Copper Projects Nevada USA

Signed Agreement to acquire a 100% Interest in the Garfield Gold-Copper and the Stonewall Gold Exploration Properties Located in Nevada, USA

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce the execution of an agreement (the “Agreement”) to acquire two exploration properties in Nevada USA.

The projects include the Garfield Gold-Copper Project and the Stonewall Gold Project (together the “Acquisition Properties” or the “Properties”), acquired outright from London quoted Sunrise Resources plc (LON:SRES).

The Properties will be acquired by a Nevada limited liability new company which will be the wholly owned local Nevada operating company for Golden Metal Resources Limited (“Golden Metal”), Power Metal’s 100% owned UK private subsidiary.

Paul Johnson, Chief Executive Officer of Power Metal Resources, commented:

“The Acquisition Properties provide Power Metal with further exposure to precious and base metals exploration in Nevada USA and complement the recently acquired option over the Golconda Summit Gold Property, also in Nevada and announced on 1 June 2021.

Through this transaction Golden Metal, the wholly owned Power Metal subsidiary, now has a trio of gold – silver – copper exploration projects, targeting major metal discoveries in Nevada USA.

We expect to launch ground exploration in Nevada shortly, initially targeting near surface significant gold mineralisation at the Golconda Summit gold property and thereafter initial work programmes on the two properties acquired with today’s announcement. Further updates to the market in this regard are expected in the near term.”

VENDOR AND PROPERTY INFORMATION

The Vendor of the Properties is London AIM quoted Sunrise Resources plc (LON:SRES) and its two Nevada based wholly owned subsidiaries SR Minerals Inc and Westgold Inc.

The Acquistion Properties consist of two portfolios of United States Department of the Interior Bureau of Land Management (“BLM”) Mining Claims held 100% and in good standing by SR Minerals Inc. for the Garfield Gold-Copper Project (“Garfield”); and by Westgold Inc. for the Stonewall Gold Project (“Stonewall”).

Garfield

The Garfield Project is located approximately 10km east of the town of Hawthorne in Mineral County, Nevada. Garfield is in the prolific Walker Lane mineral belt which hosts several world class gold-silver epithermal (Comstock Lode, Tonopah), copper-gold porphyry (Anaconda), and iron-oxide-copper-gold deposits (Pumpkin Hollow).

Garfield was staked to cover a small area of gossanous material occurring at surface and discovered by Sunrise Resources in 2015. Initial sampling over the gossan returned rock results up to 6% Cu, 3.5g/t Au, and 124g/t Ag. A single 26m trench was oriented over part of the gossan in 2016 and returned an interval of 22m of 0.33% copper, including a 2m sub-interval grading 2.18% copper (16m-18m), and a separate 2m sub-interval grading 1.2g/t Au. The trench ended in mineralisation and remains open along strike. No additional follow up work has been completed on the Project.

The Company plans on executing a Phase 1 work programme that will include a property wide systematic soil geochemical survey designed to test continuity of skarn and porphyry-style mineralisation and elevated copper between the various historic grab sampling localities. The soil survey will be followed by a programme of trenching  which should provide a cost effective means of evaluating any copper, gold and silver anomalies identified by the soil survey.

In addition the 2016 trench will be re-opened and extended to provide coverage of the mineralisation which currently remains open along strike. 

Stonewall

Stonewall is located approximately 15km south of the historic mining town of Goldfield in Nye County, Nevada. Stonewall is also in the prolific Walker Lake mineral belt, and less than 60km southwest of the famous silver deposits of Tonopah which produced over 138 million ounces of silver from 1900-1921.¹

Stonewall is centred on an approximately 1.2km long (open along strike) milky-white quartz vein with prevalent low-sulphidation epithermal boiling textures, which varies in thickness between 15-20m along its outcropping extent.

Rock sampling by previous operators returned anomalous gold-silver values (up to 1.17g/t Au and 161g/t Ag) with elevated mercury, which is characteristic of the shallow parts of a low-sulphidation epithermal system.

Minimal shallow historic drilling tested a limited strike length along the vein and returned downhole epithermal vein intersections up to 12m in width with stockwork zones up to 70m wide with elevated gold and silver results. Drilling was completed along parts of the vein easily accessible for a road, with the zones displaying the strongest epithermal textures remaining untested.

Placer Dome Inc. (now Barrick Gold Corp.), who optioned the Stonewall property in 2003, completed fluid inclusion analysis on surface samples which determined formation temperatures of 170°C, consistent with the upper parts of the epithermal System.

Considering the widths of the quartz vein and surrounding stockwork/alteration zones (up to 70m), the mapped strike-length extent (currently 1.2km; but remains open under cover) and the well developed boiling textures found at surface, the Company is of the belief that the Stonewall vein may represent the upper parts of a sizeable buried low-sulphidation epithermal system.

The Company plans on executing a diamond driling programme at Stonewall which will not only test the eastern extent, where boiling textures at surface are best developed, but also the broader system at depth where it is postulated the Au-Ag boiling zone of the system would be found.

TRANSACTION TERMS

The principal terms to acquire a 100% interest in the Properties are as follows:

–      Power Metal will pay initial consideration of £20,000 cash and £61,875 payable through the issue to the Vendors of 2.25 million new ordinary shares of 0.1p each in Power Metal at a price of 2.75p per share (“new Ordinary Shares”)(“Consideration Shares”).

–      In addition, Power Metal will issue to Sunrise Resources plc 2.25 million warrants with an exercise price of 3.75p per new Ordinary Share and life to expiry of 2 years from the date of issue (“Warrants”).  Should the volume weighted average price (“VWAP”) of Power Metal shares meet or exceed 10 (ten) pence for 5 trading days Power Metal may serve notice on Sunrise Resources plc providing 14 calendar days to exercise and pay for the Warrants or the  Warrants will be cancelled.

–      The Vendors will retain a 2% Net Smelter Return (“NSR”) Royalty over the Properties.  1% of each Project NSR royalty may be repurchased by Golden Metal for US$1,000,000 at any time.

–      The Properties will be acquired by a Nevada limited liability newly formed company and the local operating company wholly owned by Golden Metal, Power Metal’s 100% owned UK private subsidiary.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 2,250,000 Consideration Shares to be admitted to trading on AIM which is expected to occur on or around 24 June 2021 (“Admission”). The Consideration Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

Following Admission, the Company’s issued share capital will comprise 1,149,017,211 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

COMPETENT PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.

References:

¹Tonopah History – Tonopah, Nevada (tonopahnevada.com)

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

For further information please visit https://www.powermetalresources.com/ or contact: