Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolioannounces the December 2021 quarterly business operational update for shareholders.
QUARTER HIGHLIGHTS:
Exploration
– Completion of a 1,092 metre reverse circulation drill programme at the Tati Project, Botswana, designed to follow up on Phase I and II results which highlighted kilometre-scale gold, arsenic and nickel geochemical anomalies coincident with various geological structures highlighted by ground geophysical surveys.
– Bonanza grade silver achieved in 10 out of 19 drillholes completed during the Phase I Silver Peak Project, Canada, drill programme, follow up overlimit assays confirmed high-grade copper, antimony and lead results increasing the average silver equivalent grade by 18.8%.
– Rock sampling and prospecting programmes conducted at the company’s Tait Hill, Thibaut Lake and Clearwater uranium properties surrounding the Athabasca Basin, Saskatchewan, Canada, returned high-grade assay results up to 38,600ppm (3.86%) uranium.
– Securing the option agreement for Kavango Resources plc (“Kavango”) to acquire current project partner Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key”), through which exploration for nickel, copper and platinum group elements (“PGE”) at the Molopo Farms Complex Project would see a significant step forward. Having Kavango as the operational partner should streamline the ongoing project progression which is key following the discovery of nickel sulphides during the inaugural 2021 drill programme.
Spin-Out Vehicles
– New Ballarat Gold Corporation (“NBGC”): grant of licence applications in Victoria, Australia, further increase the licence footprint to over 1,500km2; NBGC’s inaugural diamond drilling programme has commenced targeting gold mineralisation across a number of exploration targets.
– Golden Metal Resources Limited (“Golden Metal”): Acquisition of Pilot Mountain Project which hosts a substantial JORC compliant Mineral Resource (tungsten with significant silver, copper & zinc credits) in Nevada, USA, into Golden Metal which is seeking a listing in London. Golden Metal is now moving through the listing process with a full management board, suite of listing advisers and has recently completed a £750,000 pre-IPO financing.
– First Development Resources Limited (“FDR Australia”): Further commercial and technical developments within Power Metal’s FDR Australia subsidiary company with preliminary exploration work delineating a number of exciting magnetic bullseye gold/copper targets at the Wallal Project located within the prolific Paterson Province. Further acquisition into FDR Australia of the Selta Project targeting uranium and rare-earth elements in the Northern Territory, Australia.
Corporate PLC
– Financing conducted in November raising £1,050,000 in a placing conducted at the then mid-market price of 1.75p.
– Operational working capital comprising cash and listed investments at 31/12/2021 amounted to £2.91M and unaudited total assets at 30/11/2021 of £10.1M (before valuation uplift in spin-out vehicles to pre-IPO valuation).
– New team members recruited in the quarter include a Chief Executive Officer for First Development Resources Limited (planned UK listing company) and Power Metal commercial management, accounting and business administration staff. Additional recruitment underway to support the growth of the Company and its various spinouts.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc, commented:
“We have chosen a non-conformist path for Power Metal in order to build a company, and investment proposition, quite unlike any other within the London junior resource space.
We have opted for scale and diversity, assembling a large portfolio, widely spread across multiple jurisdictions and commodities, with a main focus on district scale opportunities.
Our mission, after the first phase of portfolio building, was to create value through proactive exploration and corporate activity. We are doing just that as you will see from the project level detail provided for the most recent quarter below.
We currently sit at an important point in the Power Metal life-cycle, coincidentally, at a time when the world is demanding unprecedented quantities of metals for investment security, new infrastructure builds and to power the ongoing green technological revolution.
Despite the world’s aspirations, the practical reality is that in recent years we have seen metal supply attrition with a lack of large-scale metal discoveries combined with subdued investment in the exploration and project development space.
With such skewed supply/demand fundamentals, sectors can come alive, and we believe 2022 will be an exciting year for the junior mining resource space.
The final quarter of 2021 is captured below with a brief assessment by the Company of each project and company within our portfolio. The work completed during the final quarter of 2021 has set up Power Metal well for the coming year.”
Note: in addition to the material presented below, investors are encouraged to review Power Metal’s corporate presentation which is available on the Company’s website through the following link:
https://www.powermetalresources.com/presentation/
PROJECT OPERATIONS UPDATE
The tables below provide the latest status of each project within the Company’s portfolio and include:
– Exploration project updates from African, North American and Australian interests;
– Corporate development updates for project packages advancing towards spin-out into their own listed vehicles;
– Further updates in respect of the Company’s new project pipeline including Power Capital Investments Ltd, the Company’s wholly-owned project incubator;
– Additional management, compliance and financial information for shareholders.
African Exploration Projects
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Project |
Latest Position |
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Molopo Farms Complex Project Botswana (Nickel – Copper – Platinum Group Element) POW: Effective Economic Interest circa 53% (which will reduce to 40% if Kavango Resources plc exercise their option) |
The Molopo Farms Complex Project (“MFC Project”) is owned by Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key”) with a 60% interest and Power Metal with a 40% interest. Power Metal earned-in to its 40% interest by spending US$500,000 on exploration work, including the maiden drill programme completed earlier this year. The maiden drill programme provided proof of concept of the geological model and also identified significant nickel sulphides in the drill core with assays up to 1.7% nickel and 0.55g/t platinum 1. This was a very positive outcome for the first drill programme on this district scale exploration project. In order to simplify the project ownership structure and streamline ground operations in Botswana, an option agreement was signed with Kavango Resources plc to acquire Kalahari Key and its 60% interest in the MFC Project. In lieu of an option fee and as part of its due diligence, Kavango is undertaking an agreed exploration work programme on the MFC project, the results of which will be made available to Power Metal in due course. If Kavango exercises its option Power Metal will sell its circa 21% interest in Kalahari Key in exchange for Kavango shares and warrants. Power Metal will retain and intends to maintain its 40% interest in the MFC project for the foreseeable future. Further details in respect of the Kavango option are in the Company’s announcement on 26/11/2021 as linked below: https://www.londonstockexchange.com/news-article/POW/kavango-option-kalahari-key-botswana/15226717 Company View: Proof of the geological model and the identification of nickel sulphides in the inaugural three drill hole programme was an extremely positive initial outcome for the MFC Project. It became evident however, that progress was slower than ideal particularly given the positive results of maiden drilling programme. As a result, action was needed to simplify the project ownership structure in order to accelerate work progression and streamline ongoing operations. The Kavango option agreement was an important step in this regard. We look forward to the results of the option work programme which should provide valuable additional data to help plan the next phase of drilling to follow up on the encouraging results achieved thus far. |
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South Ghanzi Project Botswana (Copper – Silver) POW: 50% |
The South Ghanzi Project is held within Kanye Resources Pty Limited, a joint venture vehicle 50% held by Power Metal and 50% by partners Kavango Resources plc (LON:KAV) who are the operators of the project.
Drill target refinement continues at the South Ghanzi Project, together with initial exploration at the South Ghanzi Extension licences and the Mamuno licences acquired more recently in August 2021 2. Together, the ground footprint in the Kalahari Copper Belt (“KCB Project”) totals 4,257km2.
Approval of the Environmental Management Plan (“EMP”) for South Ghanzi was secured in October 2021 clearing the last key administrative hurdle and enabling drilling to be undertaken subject to the ongoing target refinement.
The joint venture partners continue to consider the planned IPO of Kanye Resources (through a UK listing company, Kanye Resources plc) and an update in this regard will be provided as soon as practicable.
Company View:
Approval of the EMP was a major step forward for the KCB Project. The KCB holds district scale potential and Power Metal is working with Kavango to ensure the initial drill holes are optimally cited to gather the best geological data and maximise the chance of discovery.
The joint venture partners anticipate a material budget will be applied to drilling at the KCB Project and therefore appropriate investment is being made in preparatory measures to optimise the vectoring of drill targets.
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Ditau Camp Project Botswana (Rare Earths – Base Metals) POW: 50% |
The Ditau Camp Project (“Ditau”) is also held within the Kanye Resources joint venture as outlined above. Exploration work targeting Rare Earth Elements (“REE”) and base metals has identified a 2.5km by 2.8km target area at prospect I10 where an Audio-frequency Magnetotellurics (“AMT”) geophysical resistivity anomaly, coincides with a gravity high anomaly. The latest Ditau exploration findings were announced to the market in October 2021 and may be viewed in the link below: Further exploration work is continuing on the ground and the next material step, exploration drilling, is expected to commence in the first quarter of 2022. Company View: The Ditau Camp Project, soon to be the target of exploration drilling, has delivered some extremely positive findings to date, particularly with the large anomaly now identified at prospect I10. The expansion of target commodities from REEs to now include base metals demonstrates the prospectivity Ditau holds and we are very eager for drilling to commence as soon as possible. |
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Tati Project Botswana (Gold – Nickel) POW: 100% |
The Company recently completed a maiden drill programme following up positive initial exploration results including geochemical soil sampling, mapping & prospecting, and ground-based geophysics including high-resolution magnetic and radiometric surveys.
The initial exploration highlighted five target areas across the two licences, which are defined by kilometre-scale geochemical anomalies that are coincident with various geological structures that were highlighted by the ground geophysical surveys.
The Company announced a maiden drill programme at the Tati Project in October 2021 and details may be viewed through the link below:
The maiden drill programme comprised 23 reverse circulation (“RC”) drillholes for a total 1,092m drilled. The RC holes targeted multiple nickel and gold anomalies identified by the Company’s Phase I and Phase II geochemical and geophysical programmes completed earlier in the summer. RC samples were shipped to Johannesburg for sample preparation at Intertek Genalysis (“Intertek”) preparatory facility, and have since been shipped and received in Perth, Australia, at Intertek’s laboratory where they are undergoing analysis. Results from all RC samples are still pending and are expected to be received in early 2022.
Power Metal has incorporated a new Botswana company, Tati Greenstone Resources Pty Ltd (“TGR”), to hold the Tati Project. Documentation for the transfer of the two exploration licences comprising the Tati Project into TGR has been submitted to the Ministry of Mineral Resources, Green Technology and Energy Security (“MMGE”).
Company View:
From the original announcement confirming an option for the Tati Project in May 20213, Power Metal have moved through a number of initial exploration steps very rapidly.
We await the results from the recent RC drilling campaign which will provide key information with regard to sub surface geology to complement the information collected at surface from geochemical and geophysical exploration work.
The identification of multiple kilometre-scale gold, arsenic and nickel anomalies so early in the work programme, provides multiple opportunities for a gold or nickel discovery. We are therefore pushing as hard as possible to accelerate project exploration.
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Kisinka Project The Democratic Republic of the Congo (Copper – Cobalt) POW: 70% |
Next stage exploration is drill testing of the 6.8km copper-cobalt geochemical anomaly identified by previous exploration programmes at the Kisinka Project which holds a 25 year production licence. We are continuing to push for an acceptable drill programme including target finalisation and sourcing of appropriate contractors. Company View: The 6.8km copper-cobalt anomaly is an interesting exploration target which we would like to see drill tested. The Kisinka Project has discovery potential, but the pace of commercial and exploration progress in-country has been slower than ideal and this is something we are working to resolve. |
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Haneti Project Tanzania (Polymetallic) POW: 35% |
The Haneti Project is held 35% Power Metal and 65% Katoro Gold plc (LON:KAT).
The next stage of exploration at the Haneti Project is deep diamond core (“DC”) drill testing of targets prospective for nickel sulphide / PGE mineralisation.
The DC drill programme is scheduled to commence in January 2022 and further information will follow in due course.
Company View:
Based on the results achieved to date at the Haneti Project, we are of the belief that the next stage of exploration needs to be deep diamond drilling, and we are very pleased that this work is about to commence.
If the DC drilling is successful in the delineation of the mineralising system we are ultimately seeking the discovery of a nickel sulphide and PGE deposit and the impact on both Katoro and Power Metal could be significant.
Power Metal are therefore eager to see diamond drilling commence in January 2022 and the findings therefrom. |
North American Exploration Projects
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Project |
Latest Position |
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Silver Peak Project British Columbia, Canada (Silver) POW: 30% |
A Phase I diamond drill programme was launched at the Silver Peak Project in August 2021. In total 19 short cored drill holes were completed and assay results from this programme were completed with 10 out of the 19 holes drilled returning bonanza grade silver (>1,000g/t Ag) with significant copper, zinc, lead and antimony credits, and 14 of the 19 holes returning elevated silver mineralisation. This included a highlight Intercept of 0.76m of 8,692.2g/t Ag (279.5 oz/t) from hole DDH21-2.
The initial drill assay results from the Phase I programme were announced by the Company in November 2021 and may be viewed through the following link:
In addition, overlimit assays were conducted highlighting high grade copper, antimony and lead results. The overlimit assays received led to an average increase in grade of 18.8% from silver to silver equivalent for the calculated intervals. The overlimit assay results were announced by the Company in December 2021 and may be viewed through the following link:
Following the completion of the 2021 Phase I drilling programme, and the receipt and release of all associated assay results, the project partners commissioned a NI43-101 compliant technical report 4 to be completed on the Silver Peak Project. The report was commissioned to prepare the Silver Peak Project to potentially act as a qualified project for a possible public listing. Company View: The results from all stages of exploration at Silver Peak have been increasingly exciting for Power Metal and our partners. Repeated bonanza grade silver results are particularly attractive and, in our opinion, have led to a significant increase in the overall project valuation. There are a number of potential options for project commercialisation and we continue to work with our partners to review possible next steps. |
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Alamo Gold Project Arizona, United States of America (Gold) POW: Earn-in to 75% |
Permitting delays were encountered slowing progress at the Alamo Gold Project. Following granting of permits the work programme recommenced and is outlined in the Company’s November announcement found in the link below:
The test pitting programme was completed successfully in early December 2021.
As part of the programme, multiple test pits were excavated to bedrock at Big Boulder Wash (3 pits) and Breccia Hill (3 pits).
A total of 13 rock samples were taken from various trenches at Breccia Hill, as well as three additional rock samples from various localities located near to the trenches. Rocks sampled were described predominantly as volcanic and/or gneissic in nature, with varying degrees of brecciation and hematisation noted in several samples. Two of the prospecting samples were described as strongly oxidised quartz vein samples with carbonate-sulphide veining throughout.
All samples were sent for assay at an accredited ALS laboratory where they will undergo multi-element analysis including gold, utilising a large 50-gram aliquot size intended to reduce any nugget effect present in any of the samples. Significant results will be announced to shareholders as and when received.
Due to the permitting delays experienced on our Alamo Gold Project, Power Metal and the vendor, Frisco Gold Corporation, have agreed to an amendment to the original Mineral Lease and Option Agreement signed between the two companies.
Under the original terms, a US$50,000 pre-production royalty payment (“PPR Payment”) was due by 31 December 2021. Under the amended agreement, the PPR Payment has been deferred until 14 days after the receipt of all analytical results from the 2021 test pitting programme, or 31 March 2022, whichever is earlier.
The amendment will allow Power Metal to review all 2021 exploration data before making a decision on next steps with the project.
Company View:
Progress has been slow with the Alamo Gold Project largely due to the permitting delays locally onset by the COVID-19 pandemic. With permits now issued, and work completed and underway, we await the findings with interest to determine the next steps for the project.
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Athabasca Uranium Saskatchewan, Canada (Uranium) POW 100% |
The Company began staking in the Athabasca Basin in Saskatchewan, Canada in September 2021 and in November 2021 announced a further batch of staking increasing the footprint of staked ground to 411.96km2 over 7 property packages as outlined in the following announcement:
Work was undertaken to assemble detailed project information and to determine next steps for the newly acquired properties.
Step one was the launch of Phase I surface rock sampling programmes at three properties, Tait Hill, Thibault Lake and Clearwater.
The programme was successfully completed in November 2021 and 20 rock samples were collected for assay testing, with the results sent for rush assay testing.
Assay results were received in December 2021 demonstrating high grade uranium with the highest grade of 38,600ppm or 3.86% uranium oxide (“U308“).
The full exploration update released by the Company may be viewed in the link below:
Company View:
The Company’s move into the uranium exploration space has generated a lot of interest amongst shareholders. This is justifiable, as the staking undertaken in September through to November has created 7 exciting project packages surrounding the Athabasca basin.
Those packages have attracted interest from multiple parties and we continue to review the forward pathway for our uranium business in which Power Metal has significant optionality.
We continue to look for additional uranium opportunities in the Athabasca region and more generally in North America and Africa.
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Authier North Quebec, Canada (Lithium) POW earn-in to 100% |
Inaugural exploration was launched at Authier North in September 2021 with a Phase I programme comprising prospecting, mapping and sampling.
The programme was designed to test for the extensions of a lithium-bearing pegmatite dyke down dip to the north, and along strike to the east from the adjacent Authier Lithium Property.
The Authier Lithium Property is owned by Sayona Mining Limited and is scheduled to go into production in 2023.
A total of 12 rock samples and 193 B-horizon soil samples were collected from three grid areas across the Authier North Project (West, Northeast, and Southeast).
Soil and rock samples were collected and sent for assay at Activation Laboratories Ltd., Ancaster, Ontario. Soil samples were assayed utilising a 35-element analytical package including lithium, and select samples were further tested for rare-earth element enrichment utilising a REE analytical package.
The mean result for lithium-in-soil was 9.8ppm Li, with a standard deviation of 4.0ppm Li. The three highest results returned were 27ppm Li, 29ppm Li, and 36ppm Li representing a ~4, ~4.5 and ~6 standard deviation increase over the mean.
The highest results were all located in the eastern part of the Authier North Project within the Northeast and Southeastern grids.
The Company is considering additional infill soil sampling between the two grids, as well as possible ground-based geophysical surveys over the entire project.
Company View:
The Authier North project is an exciting lithium and REE focused opportunity for Power Metal.
We are pleased to have successfully completed Phase I exploration and are looking forward to receipt of full assay data so we can determine next steps for the project.
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Australian Exploration Projects
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Project |
Latest Position |
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Gawler Project South Australia (Gold, Copper) POW: 100% |
In October 2021 the Company announced it had established a new wholly owned Australian subsidiary Power Metal Resources Australia Pty Ltd (“POW Australia”). Following that, POW Australia submitted licence applications covering an area of 1,994km2 in the Gawler Craton of South Australia.
The applications are targeting Olympic Dam style mineralisation and POW Australia is currently undertaking a review of publicly available historic data in order to further refine geological understanding and prepare detailed exploration plans in readiness for ground operations when licences are granted. The Company’s announcement in respect of the above may be viewed through the following link: https://www.londonstockexchange.com/news-article/POW/new-australia-copper-gold-opportunity/15189456 Company View: The Gawler Project, although early stage and still in the application phase, demonstrates the Company’s ability, with the skills and knowledge of its technical team members, to identify new opportunities and move quickly to secure new ground and begin to build a new project opportunity from the ground-up. |
Disposal/Spin-Out Vehicle Packages*
* Please note other project packages within the Power Metal portfolio are also in earlier stages of spin-out preparations in addition to those listed below.
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Project |
Latest Position |
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New Ballarat Gold Corporation Victoria, Australia (Gold) POW: 49.9% |
Power Metal has a 49.9% interest in New Ballarat Gold Corporation plc (“NBGC”) which is held in a joint venture with 50.1% owner Red Rock Resources plc (LON:RRR). Through its Australian operating subsidiary, Red Rock Australasia Pty Ltd, NBGC has a substantial claim holding within the Victoria Goldfields, Australia. The latest update in respect of NBGC was released by the Company in December 2021 and may be viewed through the following link: Note: subsequent to the above update a further single licence has been granted, EL007505 covering 9km2, further details about which will be provided in future NBGC updates. The update confirms the commencement of an inaugural DC drilling programme at the O’Loughlin’s gold prospect located south of Buninyong. Further details of the planned drill programme were provided in the Company’s update also released in December 2021 which may be viewed through the following link:
Drilling is progressing well with a market update expected in January 2022. NBGC is seeking a listing on the London capital markets and is working with advisors in this regard. Company view: A significant claim footprint secured by joint venture partners has created a valuable land holding within the Victoria Goldfields, one of the most sought after gold exploration regions in the world. To date over 10 exploration licences (of the 16 applications) have now been granted, taking the granted footprint to over 1,500km2, representing a major achievement which has materially increased the value of the joint venture. Whilst the preparations for listing the vehicle in London are in process, the proactive approach to exploration continues, with multiple gold exploration targets now subject to diamond drilling that is progressing well. |
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Golden Metal Resources Nevada, USA Gold – Base Metals POW 83.13% (following issue of shares relating to the £750,000 pre-IPO financing) |
During 2021 Power Metal assembled a strategic package of exploration and development interests in Nevada, USA, under the corporate vehicle Golden Metal Resources Ltd (“Golden Metal”). Golden Metal’s project portfolio includes: – Golconda Summit – An earn-in over an exploration property targeting a major gold discovery, where Golden Metal has a right to earn-in to a 100% interest.
– Garfield/Stonewall – Two 100% owned exploration properties targeting gold-silver-copper mineralisation.
– Pilot Mountain – 100% interest in an advanced exploration and development property with a substantial JORC compliant Mineral Resource for tungsten (with significant copper, silver and zinc credits). The latest Golden Metal project exploration update was released in November 2021 and may be viewed through the link below: Golden Metal is seeking a listing on the London capital markets (targeting April 2022) and has recruited its listing board, appointed all advisors and recently raised £750,000 in pre-IPO funding further details of which may be seen in the Company’s December announcement linked below: The Golden Metal website is now live and can be viewed through the following link: https://www.goldenmetalresources.com The Golden Metal corporate presentation may be accessed directly through the following link:
https://www.goldenmetalresources.com/golden-metal-resources-presentation/ Company View: The pre-IPO financing for Golden Metal was conducted at a pre-money valuation of £3.25million. The intention is to secure an IPO listing at a premium to the pre-IPO valuation and launch Golden Metal with immediate high-impact exploration programmes planned across the portfolio. Power Metal considers the Golden Metal package to be a highly attractive listing vehicle, offering UK-based investors access to North American exploration focused on the world’s top mining jurisdiction 5of Nevada, USA. The Golden Metal package includes the Pilot Mountain Project, which hosts a significant JORC compliant Mineral Resource which we believe will underpin a strong valuation for Golden Metal going forward. Golden Metal is a unique opportunity and the Company is looking forward to the planned listing and proactive exploration updates thereafter. |
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First Development Resources Western Australia (Gold – Copper – Rare Earth Elements – Uranium) POW: 96.15% (diluting down to 83.33% should all 3 Selta Project licences be granted).
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Power Metal acquired a 100% interest in First Development Resources Pty Ltd (“FDR Australia”) via its wholly owned subsidiary First Development Resources Limited (“FDR UK”). The announcement in respect of this acquisition was released in October 2021 and may be viewed through the following link: FDR Australia has a 100% interest in three exploration projects in the Paterson Province of Western Australia (comprising five granted exploration licences in total and covering a ground footprint of 751km2). The three projects include the Wallal Project, Braeside West Project and Ripon Hills Project. At the flagship Wallal Project, ongoing exploration work includes 2D seismic geophysics reprocessing and a passive seismic survey which is intended to help refine drill targeting within the Wallal Main licence area. Drill targets comprise magnetic bullseye targets of similar geological nature to that drill tested by Greatland Gold plc leading to the discovery of the Havieron deposit also within the Paterson Province. In November 2021 Power Metal announced that FDR UK had acquired URE Metals Pty Ltd (“URE”) an Australian private company and holder of the Selta Project, comprising 3 exploration licences in the Northern Territory, Australia. The announcement may be viewed through the following link: The acquisition of URE was almost entirely payable in FDR UK shares diluting Power Metal’s holding in FDR UK to 96.15% initially, and ultimately to 83.33% should all 3 Selta Project licences be granted. The pre-transaction value of Power Metal’s interest in FDR UK was £2,500,000 and FDR UK is seeking a listing on the London capital markets. Preparatory steps are being taken for the listing, which is targeting Q2 2022, including the recruitment of a suitable board, senior management team and suite of advisors to assist with the listing process. Specifically in respect of the board Tristan Pottas has been appointed as Chief Executive Officer of FDR UK and Craig Moulton as Non-executive Director. Company view: It is apparent from shareholder communications with Power Metal that FDR UK will be of great interest going forward. The combination of the Wallal Project’s exciting magnetic bullseye targets together with the uranium/REEs exploration opportunity at the Selta Project in the Northern Territory, is drawing significant shareholder attention. The Power Metal team are working hard to implement the preparatory measures needed to secure the listing of FDR UK and are looking forward to providing further updates in due course. |
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First Class Metals Schreiber-Hemlo, Ontario, Canada (Gold – Base Metals) POW c.36%
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Power Metal announced the 100% disposal of its Schreiber-Hemlo interests to First Class Metals (“First Class”) on 7 September 2021 for a consideration of £1million. With the shares received on the disposal, and following a subscription by Power Metal of £28,764 at £3/share in the pre-IPO raise, Power Metal currently has an interest of 36.3% in First Class (after reflecting the circa £400,000 pre-IPO raise undertaken by First Class). First Class is seeking a listing on the London capital markets and is working on this currently targeting a listing for Q1 2022. Power Metal is working with First Class to support their listing plans and looks forward to reporting further progress in this regard. On listing Power Metal will be a significant shareholder in First Class. Company View: The First Class Metals business offers investors through London, access to a Ontario, Canada, focused exploration vehicle with extensive exposure to highly prospective and strategically positioned projects. With the integration of the Power Metal Schreiber-Hemlo projects, the First Class Metals portfolio is potentially market leading and we believe will draw considerable interest on listing. The team at First Class Metals are doing a very effective job and we continue to work with them where required. |
New Opportunities
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Project |
Latest Position |
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Power Metal Resources plc |
Power Metal as a business has an acquisitive mindset. However, the near-term focus will remain on the exploration of existing interests and the crystallisation of value through the potential listing of spin-out vehicles as previously announced. New acquisitions are likely to be restricted to additional projects to add into the FDR UK business in preparation for its planned IPO, new uranium opportunities and potentially additional gold/copper opportunities in North America or Australia. Should Power Metal encounter exceptional new opportunities outside the above areas it will consider further acquisitions but only on the right commercial terms. It should be noted that many of the Company’s previous acquisitions have used Power Metal equity as a large portion of consideration. With the share price trading at a circa 55% discount to the high in January 2021, the Company is reluctant to utilise equity for acquisitions at this time and it makes commercial sense to limit any equity based acquisition approach at current share price levels. |
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Power Capital Investments Limited Global Resource Project Incubator (Multi-Commodity) POW: 100%
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Power Capital Investments (“Power Capital”) continues to work on a number of initiatives targeting individual or smaller corporate owned opportunities. Limited information will be provided in respect of the above Power Capital projects to preserve commercial sensitivity, notably where work is needed to secure exploration licences or to protect commercial partners. At present none of the Power Capital projects are considered material in the context of the Power Metal business overall. Should they become so, further disclosures may be necessary. NOTE: A maximum investment level of £100,000 per opportunity has been established and a minimum 50% Power Capital holding interest in any opportunity following Power Capital’s investment. |
Management and Financial
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Project |
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Board
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The Board currently comprises: Scott Richardson Brown – Interim Non-executive Chairman Paul Johnson – Chief Executive Officer Ed Shaw – Non-executive Director Power Metal is seeking to appoint new board members and expects to make additional announcements in this regard in the current quarter. |
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Management and Team
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The Company operates a hub and spoke operational management style coordinating and controlling global business operations from its UK operational head office based in Farnborough, UK. In 2021 with the growth of our business portfolio, and the success of exploration and commercial ventures, we have built the Head Office team with additional team members covering: – exploration management, – commercial management, – financial and administrative support, and: – marketing & communications We are seeking to optimise resources, and our Head Office team will be deployed to support Power Metal central activities and also to support spin-out vehicles, managerially and administratively, sharing the Power Metal team operational costs with spin-out vehicles. Power Metal is actively seeking to bring new team members in to support the growth in business activities and has launched a “Join-Us” page on the Company’s website with further details. This may be viewed through the following link: |
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Financial Position
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Power Metal Financial Assets The core of the Company’s assets, as with many other exploration companies, is a portfolio of capitalised project acquisition and exploration costs for ongoing projects or loans to subsidiary companies in respect of project expenditure (“Project Assets”). As at 30/11/2021 the Project Asset value was £3,354,847 in the Company’s internal unaudited management accounts. The Company’s assets also include the planned spin out/disposal project vehicles (“Pre-IPO Assets”) which includes: – First Class Metals (Hemlo-Schreiber projects sold to FCM Sept 21) – Golden Metal Resources (Nevada exploration/development) – First Development Resources (Australia exploration) – New Ballarat Gold Corporation (Australia exploration). Each spin-out/disposal, on successful listing is expected to add material value to the Company’s balance sheet. As at 30/11/2021 the Pre-IPO Asset value was £3,709,777 in the Company’s internal unaudited management accounts. This value does not include the valuation uplift from acquisition cost to pre-IPO value. Power Metal also holds listed investments including shares and warrants of currently listed junior resource companies (“Listed Assets”). The Listed Assets are readily tradable and provide the Company with a source of cash if needed. As at 30/11/2021 the Listed Asset value was £1,079,128 in the Company’s internal unaudited management accounts. In addition to the above the Company maintains material cash balances which includes GBP, USD, CAD, AUD and Pula currencies (“Cash Assets”). As at 30/11/2021 the Cash Asset value was £1,962,561 in the Company’s internal unaudited management accounts (including the November 2021 financing, which was received in full in December 2021). Overall, as at 30/11/2021 including all categories listed above the total unaudited assets of the Company amounted to £10,106,313. Note: this asset figure does not include the uplift in value of Golden Metal Resources or First Development Resources to reflect the current pre-IPO valuations of both vehicles, with both vehicles included at acquisition cost only. Working Capital The Company considers Working Capital to be the money available to deploy on payment of corporate operational, notably exploration expenditure. It comprises cash held and listed investments only and at 30/11/2021 as outlined above amounted to £3,041,689. As Working Capital management is vital, we monitor this on a weekly basis and as at 31/12/2021 this amounted to £2,907,686. This is a robust amount of cash and listed investments as the Company enters 2022. Future Financing Sources The Company has multiple sources of additional financing. As demonstrated in November 2021, traditional equity financing can be undertaken to raise additional sums where considered necessary. Furthermore, the Company has issued warrant instruments during financings and project acquisition transactions, some of which are currently in-the-money, but most are at higher prices to the current mid market share price. In addition, the Company has issued options to management, staff, advisors and consultants, as part of team incentivisation. Table 1 below provides a full breakdown of all warrants and options outstanding as at 31/12/2021. The warrants and options above, if exercised in full, will bring £8,406,213 additional cash into the Company, largely at exercise prices considerably higher than the current market share price (or £9,406,213 if Thor Mining plc exercise their 4p warrants within 12 months and exercise replacement warrants at an exercise price of 8p). In addition to the above, the Company will benefit from the planned listing of four pre-IPO vehicles as outlined above which will, if successful and in line with expected valuations on listing, add considerably to overall Power Metal asset value. Subject to any applied lock-in on listing, the shares held on IPO will form part of listed asset investments and provide an additional pool of working capital to the Company. It is anticipated that further value generative events may occur including additional spin-outs into new listed vehicles and outright disposal of certain business interests. The level of such corporate activity is dependent on demand for new vehicles, predominantly in the London capital markets, and also the level of M&A activity in the junior resource sector. In the latter regard the Power Metal board, from acquisitive interest already demonstrated across the Company’s portfolio, expect a heightened level of corporate activity in 2022. |
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Audit and Compliance
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Power Metal continues to work with One Advisory, its financial and compliance service partner, to liaise with auditors PKF, and the financial results for the year ended 30 September 2021 are expected to be published in February 2022. Power Metal continues to bolster its Environmental, Social and Governance initiatives and expects to publish further information in this regard in the coming quarter covering the various measures implemented. In 2020 the Company undertook a Finance, Administration and Compliance Protocols and Procedures Review to further improve its underlying Governance. This review is being updated currently to ensure all areas are fully updated with business developments. As part of this the Company has now completed detailed business process mapping across all key corporate activities. In addition, Power Metal has recruited a new Commercial Manager onto the team to prepare business organisational structure charts, detailed business process flows, a live corporate and licence database and a full business information managed database. These measures are considered necessary as the Company expands in size, scale and breadth of corporate and exploration activities. |
Table 1: Power Metal Resources plc – Share Warrants and Options Outstanding at 31/12/2021
|
Financial Instrument Type |
Note |
Number |
Exercise Price |
Expiry Month |
POW Receives on Exercise |
|
Dec-19 Financing Warrants – POW Director Held |
|
11,250,000 |
0.7p |
Mar-22 |
£78,750 |
|
Jul-20 Financing Warrants – POW Director Held |
|
27,500,000 |
0.75p |
Jul-22 |
£206,250 |
|
Jul-20 Financing Warrants – General Holders |
|
70,706,079 |
0.75p |
Jul-22 |
£530,296 |
|
Nov-21 Financing Warrants – General Holders |
|
66,000,000 |
3.5p |
Dec-23 |
£2,310,000 |
|
TOTAL FINANCING WARRANTS |
|
175,456,079 |
|
|
£3,125,296 |
|
Alamo Gold Project Acquisition |
|
15,500,000 |
1p |
Jul-23 |
£155,000 |
|
Kavango – Strategic JV Earn-in Super Warrants |
|
5,000,000 |
5p |
Jul-23 |
£250,000 |
|
Silver Peak Acquisition (Signing) |
|
9,000,000 |
1.75p |
Sep-23 |
£157,500 |
|
Silver Peak Acquisition (Earn-in Complete) |
|
2,569,641 |
2.89p |
Mar-24 |
£74,263 |
|
Garfield/Stonewall Acquisition |
|
2,250,000 |
3.75p |
Jun-23 |
£84,375 |
|
First Development Resources Acquisition |
|
13,333,333 |
4.5p |
Oct-24 |
£600,000 |
|
First Development Resources Acquisition |
|
10,000,000 |
5p |
Oct-24 |
£500,000 |
|
Pilot Mountain Acquisition |
(i) |
12,500,000 |
4p |
Oct-24 |
£500,000 |
|
TOTAL TRANSACTION WARRANTS |
|
70,152,974 |
|
|
£2,321,138 |
|
Advisor/Consultant Options |
|
15,000,000 |
2p |
Jul-23 |
£300,000 |
|
POW Team (Non-Board Options) |
(iv) |
25,000,000 |
3.25p |
Jul-24 |
£812,500 |
|
POW Director Options |
|
1,000,000 |
5p |
Jul-23 |
£50,000 |
|
|
27,227,858 |
1p |
Feb-22 |
£272,279 |
|
|
|
15,000,000 |
1p |
Feb-23 |
£150,000 |
|
|
|
20,000,000 |
2p |
Jul-23 |
£400,000 |
|
|
(ii)(iv) |
10,000,000 |
3.25p |
Jun-24 |
£325,000 |
|
|
(iii)(iv) |
20,000,000 |
3.25p |
Aug-24 |
£650,000 |
|
|
TOTAL BOARD, STAFF, CONSULTANT & ADVISOR OPTIONS |
(v) |
133,227,858 |
|
|
£2,959,779 |
|
TOTAL ALL WARRANTS AND OPTIONS |
|
378,836,911 |
|
|
£8,406,213 |
|
Notes: (i) If exercised within 12 months replacement warrants issued at an 8p exercise price (ii) Subject to Shareholder Approval at General Meeting (iii) Subject to completion of six month’s service (iv) Exercise subject to POW trading at a volume weighted average price of 5p for ten trading days (v) A further 97,500 options remain outstanding from October 2012, at an exercise price of £6.00 each, expiring in October 2022 |
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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.
Reference Notes:
1 Power Metals company announcement , 24 September 2021: ( source: https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/x4919kw )
2 Power Metals company announcement , 2 August 2021: ( source: https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/rg745jr )
3 Power Metals company announcement , 6 May 2021: ( source: https://polaris.brighterir.com/public/power_metal_resources/news/rns/story/rnp73px )
4 NI43-101: Canadian National Instrument 43-101: Standards of Disclosure for Mineral Projects ( for background reference see: https://www.osc.ca/en/securities-law/instruments-rules-policies/4/43-101/mining-disclosure-essentials-ni-43-101-reporting-fundamentals-industry-best-practices-and-useful )
5 The top jurisdiction in the world for investment based on the Investment Attractiveness Index is Nevada based on the Fraser Institute Annual Survey of Mining Companies, 2020 (see: https://www.fraserinstitute.org/studies/annual-survey-of-mining-companies-2020 )
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:
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Power Metal Resources plc |
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Paul Johnson (Chief Executive Officer) |
+44 (0) 7766 465 617 |
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SP Angel Corporate Finance (Nomad and Joint Broker) |
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Ewan Leggat/Charlie Bouverat |
+44 (0) 20 3470 0470 |
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SI Capital Limited (Joint Broker) |
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Nick Emerson |
+44 (0) 1483 413 500 |
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First Equity Limited (Joint Broker) |
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David Cockbill/Jason Robertson |
+44 (0) 20 7330 1883 |
NOTES TO EDITORS
Power Metal Resources plc (LON:POW) is an AIM listed metals exploration company which finances and manages global resource projects and is seeking large scale metal discoveries.
The Company has a principal focus on opportunities offering district scale potential across a global portfolio including precious, base and strategic metal exploration in North America, Africa and Australia.
Project interests range from early-stage greenfield exploration to later-stage prospects currently subject to drill programmes.
Power Metal will develop projects internally or through strategic joint ventures until a project becomes ready for disposal through outright sale or separate listing on a recognised stock exchange thereby crystallising the value generated from our internal exploration and development work.
Value generated through disposals will be deployed internally to drive the Company’s growth or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.
Power Metal Exploration Programmes Underway/Results Awaited
Power Metal has exploration programmes completed or underway, with results awaited, as outlined below:
|
Project |
Location |
POW % |
Work Completed or Underway |
Results Awaited |
|
|
|
|
|
|
|
Alamo Gold Project |
USA |
Earn-in to 75% |
Excavation of multiple test pits and mapping & sampling. |
Field and assay results from on-site work programme. |
|
Authier North Lithium |
Canada |
Earn-in to 100% |
Soil & rock sampling completed |
Laboratory assay results of samples collected |
|
Ditau Project |
Botswana |
50% |
Preparatory exploration work underway on target I10 leading to planned accelerated drilling targeting rare-earth elements and base metals
|
Field programme findings and defined drill targets for near term drilling. |
|
Kalahari Copper Belt |
Botswana |
50% |
Exploration programme underway across the South Ghanzi Project and further exploration at the more recently acquired South Ghanzi Extension and Mamuno licence areas |
Field programme findings and defined drill targets for near term drilling |
|
Molopo Farms |
Botswana |
53%1 |
Kavango Option to acquire an interest in local project holding company. Option fee payable through defined work programme |
Results from various work activities underway as part of the Kavango Option |
|
Tati Gold/Nickel |
Botswana |
100% |
Reverse circulation drill programme completed |
Laboratory assay results awaited |
|
Victoria Goldfields |
Australia |
49.9% |
Ongoing exploration across 848km2 of granted exploration licences
|
Results from field programme including drill programme underway |
|
Wallal Gold/Copper Project |
Australia |
83.33%2 |
Passive seismic and 2D seismic processing work programme completed |
Results awaited |
1 should Kavango exercise their option to acquire Kalahari Key, Power Metal interest would reduce to 40% of the Molopo Farms Complex project
2 assuming all licences held by URE Metals Pty Limited are granted as outlined in the Company’s announcement of 19.11.21 resulting in the issue of First Development Resources Ltd shares to URE vendors