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Power Metal Resources #POW – Exercise of Ontario Option – McKellar Property

18th February 2021 / Leave a comment

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce that following due diligence work the Company has exercised its option to acquire the McKellar Property (“McKellar”) located on the prospective Schreiber-Hemlo Greenstone Belt in north-western Ontario, Canada. McKellar is one of four gold exploration properties upon which the Company has an exclusive option to acquire a 100% interest (as announced 26 January 2021).

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

“Exercising the option over the McKellar Property strengthens Power Metals’ landholding over a part of Ontario which is currently seeing heightened junior exploration company activity.

Our due diligence data review has shown McKellar complements Power Metal’s existing Dotted East, Olga Lake and Roger Lake Projects, notably adding ground with indications of VMS style mineralisation sited in association in a structurally prospective fold-hinge setting.

We are continuing our due diligence review of the remaining three option properties and will provide a further update in due course.”

MCKELLAR PROPERTY OVERVIEW

– McKellar covers the under explored core of a geologically prospective regional scale anticlinal fold hinge structure. Located upon the Schreiber-Hemlo Greenstone Belt the geology of McKellar consists metavolcanic and metasedimentary rock packages prospective for both gold and volcanogenic massive sulphide (“VMS”) style copper-lead-zinc-silver mineralisation.

– The property includes several strong Versatile Time Domain Electromagnetic (“VTEM”) geophysics anomalies identified by survey work in 2007, these anomalies have either not yet been drill tested or were inconclusively drilled by shallow holes or trenched by previous claim holders.

– The most recent work within the property was undertaken in 2017, this included soil sampling, outcrop sampling and geological mapping. This work identified an hitherto unmapped exhalative rock unit and geochemical alteration prospective for VMS mineralisation with sample assay data indicating anomalous Au, Zn, Mn, Cd and Ba associated with an undrilled VTEM anomaly. This work concluded further fieldwork with follow-up ground induced polarisation (“IP”) geophysics and drill testing could be warranted.

– Historical sampling undertaken by Noranda Exploration Company Ltd in 1989 at the historical Little Pick Silver Mine reported a channel sample of 1.4m @ 13.0% Zn, 7.1% Pb & 678.0 g/t Ag and a trench sample of 1.1m @ 32.3% Zn, 1.1% Pb & 68.4 g/t Ag, with the VMS style mineralisation reportedly being traced over a 600m strike.

– Located approximately 50 km east of the town of Schreiber and 40 km NW of the town of Marathon, Ontario on the Trans-Canada highway. Access within the property is afforded by all-terrain vehicle (“ATV”) trails. A major power line and the Canadian Pacific railway occur within 1 km of the property.

MCKELLAR CLAIM STATUS

– Consists of a total of 58 Mining Claims (“Claims”) (49 Single Cell Mining Claims and 9 Boundary Cell Mining Claims) covering a total area of circa 12.3km².

– Claims are valid through to between 7 June 2021 to 26 April 2022 upon which they can be renewed on an annual basis. For renewal the McKellar Claims will require an aggregate work spend of CAD$23,600 of which CAD$15,200 has already been applied. Therefore, an additional net aggregate work spend of CAD$8,400 (circa £4,838) is required prior to the individual Claim renewal dates.

ACQUISITION TERMS

The vendors of the Option (the “Vendors”) are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021.

In exercising the Option to acquire a 100% interest in the McKellar Property Power Metal will make the following cash and equity consideration to the Vendors.

Property Name

Cash (CAD$)

POW Shares (CAD$)

Note: POW Shares

Total Consideration

(CAD$)

McKellar

50,000

960,000

100,000

The Power Metal shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share (“Acquisition Shares”). The cash costs of the acquisition are funded from Power Metal’s existing Canadian Dollar cash account.

The Vendors retain a 2% net smelter royalty (“NSR”) on McKellar, Power Metal may purchase 1% of the NSR, at any time, by making a cash payment to the Vendors of CAD$500,000.

The Vendors will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities.

EXPLORATION PLAN

– Ongoing exploration spend will be at the discretion of Power Metal as the 100% owner of McKellar.

– Preliminary exploration work is expected to include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.

– The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost-effective basis.

Admission And Total Voting Rights

Application will be made for the 960,000 Acquisition Shares to be admitted to trading on AIM, which is expected to occur on or around 25 February 2021 (“Admission”). The Acquisition 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 1,119,992,730 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.

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:

Power Metal Resources plc
Paul Johnson (Chief Executive Officer)	+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat	+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)
Nick Emerson	+44 (0) 1483 413 500

First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson	+44 (0) 20 7330 1883

Notes to Editors:

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently the subject of drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Power Metal Resources #POW adds McKellar, Enable, Magical & Coco East projects to recently acquired Hemlo North Gold Project in Canada

26th January 2021 / Leave a comment

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce the Company has signed an option agreement to acquire a 100% interest in four separate gold exploration properties located in the prospective Hemlo and Schreiber area of Ontario, Canada.

The four Option Properties are located within 100km west or southwest of the Company’s new Hemlo North Gold Project (consisting the Dotted East, Olga Lake and Roger Lake 100% owned properties), the acquisition of which was announced on 21 January 2021.

A map showing the Option Properties and the Company’s recently acquired Hemlo North Gold Project may be viewed on the Company’s website through the following link:

https://www.powermetalresources.com/p/236/acquisitions-option-properties-ontario

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

“Taken together with our recently acquired Hemlo North Gold Project in the highly prospective Hemlo area of Ontario, Canada, the Option Properties would give Power Metal a significant footprint in the Hemlo/Schreiber district, with ground tenure close to existing mines or other local properties subject to active exploration.

We have moved quickly to secure these interests but given the assessment work involved across four individual properties, we have also secured a 30-day option period to enable due diligence work to be undertaken carefully on the Option Properties (the “Option Period”).

Shareholders will see with our recent actions that we are building a significant portfolio of precious metal interests in North America and that is something we intend to continue should the right opportunities continue to remain available to the Company.”

THE OPTION PROPERTIES:

McKellar

McKellar consists of a total of 58 Mining Claims (“Claims”) (consisting of 49 Single Cell Mining Claims and 9 Boundary Cell Mining Claims) covering a total area of circa 12.3km². The Claims are valid through to between 7 June 2021 to 26 April 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the McKellar Claims will require an aggregate work spend of CAD$23,600 of which CAD$15,200 has already been applied. Therefore, an additional net aggregate work spend of CAD$8,400 (circa £4,838) is required prior to the individual Claim renewal dates.

Underlain by prospective metavolcanic and metasedimentary rock packages, the regional magnetic geophysics shows a possible fold hinge structural setting. The underexplored property is considered prospective for both volcanogenic massive sulphide (“VMS”) copper-lead-zinc mineralisation and orogenic gold deposits. Historical sampling undertaken by Noranda Exploration in 1989 at the historical (1875) Little Pick Silver Mine reported a channel sample of 1.4m @ 13.0% Zn, 7.1% Pb & 678.0 g/t Ag and a trench sample of 1.1m @ 32.3% Zn, 1.1% Pb & 68.4 g/t Ag, with the VMS style mineralisation reportedly being traced over a 600m strike.

Enable

Enable consists of a total of 41 Single Cell Mining Claims covering a total area of circa 8.7km². The Claims are valid through to 25 July 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Enable Claims will require an aggregate work spend of CAD$16,400 (circa £9,446) prior to the Claims renewal date.

The underexplored Enable property is underlain by gold prospective, greenstone belt, metavolcanic geology and is located on and in proximity to the Terrace Bay batholith contact, which is associated with over 30 known gold occurrences in the wider area.

Magical

Magical consists of a total of 14 Single Cell Mining Claims covering a total area of circa 3km². The Claims are valid through to 27 July 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Magical Claims will require an aggregate work spend of CAD$5,600 (circa £3,226) prior to the Claims renewal date.

The regional geophysics data shows a possible target related to the intersection of a granitoid intrusion with a regional scale magnetic geophysics lineation. The property is largely unexplored apart from the easternmost Claim cell where, in 1995, Hemlo Gold Mines Inc drilled an induced polarisation (“IP”) geophysics anomaly. Diamond drill hole V95-2 reportedly intersected a 7m zone of silicification containing sericite and sulphides and 12.6m of feldspar porphyry with disseminated pyrite.

Coco East

Coco East consists of a total of 30 Single Cell Mining Claims covering a total area of circa 6.4km². The Claims are valid through to 20 August 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Coco East Claims will require an aggregate work spend of CAD$12,000 (circa £6,912) prior to the Claims renewal date.

The Coco East property is considered prospective for both mesothermal lode gold and VMS deposits.

It is located on the eastern end of the 4km long Big Duck Lake porphyry intrusion which is associated with 20 gold or gold and base metal occurrences. Almost all of the known gold showings occur along the contact of, or within 1 km of, the outer margin of the main porphyry body.

Coco East is located 8km due east of the Superior Lake Resources Ltd. (ASX:SUP) Superior Lake Zinc Project which contains a VMS style high-grade zinc deposit with a JORC Resource of 2.35 Mt @ 17.7% Zn, 0.9% Cu, 0.38 g/t Au & 34 g/t Ag and a Probable Ore Reserve of 1.96Mt @ 13.9% Zn, 0.6%Cu, 0.2g/t Au & 26.2g/t Ag¹.

THE OPTION:

The vendors of the Option (the “Vendors”) are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021. Power Metal has secured a 30-day Option to undertake due diligence on the Option Properties.

The non-refundable Option Fee payable to the Vendors is CAD$10,000 payable in cash covering all the Option Properties.

OPTION EXERCISE:

Prior to the Option expiry Power Metal may elect to acquire one or more of the Option Properties.

For the acquisition of a 100% interest in the each of the Option Properties the following cash and equity consideration is payable:

Property Name	Cash (CAD$)	POW Shares (CAD$)	Note: POW Shares	Total Consideration (CAD$)
McKellar	50,000	50,000	960,000	100,000
Enable	30,000	30,000	576,000	60,000
Magical	20,000	20,000	384,000	40,000
Coco East	30,000	30,000	576,000	60,000

Total (if all properties acquired)	130,000	130,000	2,496,000	260,000

Upon Option Exercise the POW shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share (“Acquisition Shares”).

The cash costs of the acquisition will be funded from Power Metal’s existing Canadian Dollar cash account.

The Vendors will retain a 2% net smelter royalty (“NSR”) in respect of each of the Option Properties. Power Metal may purchase 1% of each NSR for each Option Property, at any time, by making a cash payment to the Vendors of CAD$500,000 per Property.

The Vendors, will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities.

The Exploration Plan:

– Ongoing exploration spend would be at the discretion of Power Metal as the 100% owner of the Option Projects.

– Preliminary exploration work planned for the Option Properties will include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.

– The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost effective basis.

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:

Source 1: Superior Lake Resources Limited https://superiorlake.com.au/pick-lake-winston-lake-zinc-project/#:~:text=The%20Project%20is%20a%20high,ASX%20announcement%2028%20August%202019

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.