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Power Metal Resources #POW – Canadian Silver Project – Diamond Drilling Contract Signed
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the signing of the drilling contract for an initial 500m diamond core confirmatory drill programme to test the Victoria Vein at the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
HIGHLIGHTS:
· Drilling contract signed with an experienced Canadian drilling company for an initial 500m diamond core programme.
· Contractor is expected to mobilise within the next few days with a view to commencing drilling next week.
· Initial programme will entail drilling from two pads with planned core intercepts to test the Victoria Vein where POW due diligence sampling returned bonanza silver (Ag) and significant copper (Cu) and lead (Pb) grades from two 0.5m long surface channel samples as announced 22 September 2020 and as follows:
– 0.50m @ 10,718 g/t Ag (345 troy oz/tonne), 2.14 % Cu & 2.99 % Pb, and;
– 0.50m @ 14,937 g/t Ag (480 troy oz/tonne), 3.05 % Cu & 11.95 % Pb).
· Core drilling will employ a NQ size drilling bit, for a 48mm diameter core sample, with a winter capable track mounted rig operated on a double 12 hour shift basis.
· Drilling oversight, core logging and sampling will be conducted by an experienced independent geologist, with half core samples sent to an accredited independent laboratory for analysis.
· Programme is expected to be completed within a two week window prior to the onset of winter conditions. The rig will be supported by a bulldozer on site.
CHIEF EXECUTIVE OFFICER’S STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented
“I am very pleased to report the signing of the drilling contract for an initial diamond core programme at Silver Peak, where the recently announced channel sampling returned exceptionally high silver assays.
The team in-country are now focused on mobilisation and commencement of drilling and we are naturally eager to see the outcome of this programme, given the results we achieved from the sampling programme recently announced.
My thanks go to our partners in Canada who have worked incredibly hard to organise this programme and put us in a position to undertake this work prior to the weather window closing. The expeditious work undertaken has given us an opportunity to assess this unique high-grade silver project through drilling, far earlier than we initially thought possible.”
FURTHER INFORMATION
| Background | On 14 September 2020 the Company announced the exercise of an option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.Prior to option exercise the Company undertook a due diligence exploration programme including sampling at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.The assay results from the due diligence channel sampling were reported on the 22 September 2020 and are set out in Table 1 below:Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak ProjectALS Global Analytical MethodAg-GRA22Ag-CON01Cu-OG46Pb-OG46Sample IDChannel Sample Length (m)Ag (ppm)Ag (ppm)#Cu (%)*Pb (%)*SP20-0010.50>10,00010,7182.142.99SP20-0020.506,010 1.712.87SP20-0030.507,530 1.572.07SP20-0040.605,540 1.38 SP20-0050.707,880 1.943.16SP20-0060.50>10,00014,9373.0511.95SP20-0070.805,330 1.26 SP20-0080.551,595 1.78 SP20-0090.454,110 – SP20-0100.651,755 1.71 SP20-011N/A Grab sample660 – * Cu and Pb results rounded to two decimal places. # Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01. |
| Project Overview | The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada. |
| Earlier Due Diligence Exploration Programme | The due diligence work programme previously conducted by Power Metal included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (“pXRF”) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The due diligence work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from Power Metal’s 12 month Project exploration spend commitment of C$250,000. |
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.
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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 – Canadian Silver Project – Bonanza Silver Grades from Due Diligence Sampling
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the assays results from the due diligence sampling programme at the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
HIGHLIGHTS:
· Ten channel sample and one grab sample assay results received from ALS Canada laboratories for the recently completed due diligence sampling on the Victoria Vein at the Silver Peak Project (programme completion reported on 9 September 2020). Sampling was conducted by a contract geologist and was documented for Power Metal by photographs and video.
· The purpose of the sampling was to validate historic reports of vein grade and the results received have satisfied Power Metal that historic data appears representative.
· Bonanza silver (Ag) and significant copper (Cu) and lead (Pb) grades returned from two 0.5m long channel samples taken across the Victoria Vein;
Ø SP-20-001: 0.50m @ 10,718 g/t Ag, 2.14 % Cu & 2.99 % Pb; and
Ø SP-20-006: 0.50m @ 14,937 g/t Ag, 3.05 % Cu & 11.95 % Pb
· Other standout channel sample assay results include:
Ø SP20-005: 0.70m @ 7,880 g/t Ag, 1.64 % Cu & 3.16 % Pb; and
Ø SP20-003: 0.50m @ 7,530 g/t Ag, 1.57 % Cu & 2.07 % Pb.
· Average silver grade across all 11 samples >6,000g/t silver. Full results summary set out in Table 1 below.
· Channel samples were cut across the width of the vein, perpendicular to the vein strike, using a petrol driven water cooled disk cutter, sample sites were selected where vein material was deemed to be representative of silver mineralisation;
Ø Channel Samples SP-20-001 to 007 were taken as a series of parallel channel samples taken across the Victoria Vein over a circa 4m strike length; and
Ø Channel samples SP-20-008 – 010 were taken as a series of parallel samples across the Victoria Vein at a point circa 16m along strike from samples 1-7. Grab sample SP-20-011 was taken at an intermediary point along the vein.
CHIEF EXECUTIVE OFFICER’S STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“We are very pleased to report the assay results from Power Metal’s recent due diligence sampling programme have confirmed the very high silver values historically reported on the Victoria vein, one of two main veins located at the Silver Peak Project in British Columbia, Canada.
Bonanza grades of silver with significant copper and lead have been confirmed by channel samples, assayed by ALS Global and these exciting results reinforce and confirm the historical reported assays and underpin Power Metal’s decision to progress with the project earn-in.
With preparations currently being made on site to further upgrade access for equipment, we look forward to providing details of the follow-on programme plans at Silver Peak shortly.”
ASSAY RESULTS
A summary of certificated assay results with analytical method, for the eleven samples submitted to ALS Canada Ltd are set out in Table 1 below:
Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak Project
| ALS Global Analytical Method | Ag-GRA22 | Ag-CON01 | Cu-OG46 | Pb-OG46 | |
| Sample ID | Channel Sample Length (m) | Ag (ppm)^ | Ag (ppm)#^ | Cu (%)* | Pb (%)* |
| SP20-001 | 0.50 | >10,000 | 10,718 | 2.14 | 2.99 |
| SP20-002 | 0.50 | 6,010 | 1.71 | 2.87 | |
| SP20-003 | 0.50 | 7,530 | 1.57 | 2.07 | |
| SP20-004 | 0.60 | 5,540 | 1.38 | ||
| SP20-005 | 0.70 | 7,880 | 1.94 | 3.16 | |
| SP20-006 | 0.50 | >10,000 | 14,937 | 3.05 | 11.95 |
| SP20-007 | 0.80 | 5,330 | 1.26 | ||
| SP20-008 | 0.55 | 1,595 | 1.78 | ||
| SP20-009 | 0.45 | 4,110 | – | ||
| SP20-010 | 0.65 | 1,755 | 1.71 | ||
| SP20-011 | N/A Grab sample | 660 | – |
* Cu and Pb results rounded to two decimal places.
# Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01.
^ ppm is parts per million, and equivalent to g/t
FURTHER INFORMATION
| Background | On 14 September 2020 the Company announced the exercise of the option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.As part of this due diligence process the Company undertook an exploration programme at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.The assay results from this sampling work are outlined in the current release. |
| Project Overview | The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada. |
| Due Diligence Exploration Programme | The work programme included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (pXRF) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from the C$250,000 12-month project exploration spend as Power Metal has exercised the Option. |
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.
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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 – Canadian Silver Project – Option Exercised
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the Company has exercised its option (the “Option”) to earn-in to the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
HIGHLIGHTS:
· Review of Project data, including a recently conducted due diligence exploration programme, has provided positive outcomes enabling Power Metal to exercise the Option within the 30-day Option period;
· Exercise of the Option enables Power Metal to earn-in to a 30% interest in the Project on terms outlined below and including an additional CAD$225,000 committed by POW on ground exploration;
· Power Metal are now working with the Project vendors to continue a technical review focused on launching next stage exploration work including a Project drilling programme;
· The Project earn-in, when complete, will provide Power Metal with an interest in a high-grade silver exploration property in Canada, including a former working silver mine;
· Further updates to the market are anticipated in the near term in respect of the ongoing technical review and further exploration programme.
CHIEF EXECUTIVE OFFICER’S STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented “The decision to exercise this Option, on schedule, provides Power Metal with its first, potentially high impact, silver exploration project interest.
The cash component costs of earn-in exploration and Option exercise payments are fully covered by recent warrant exercises that have brought additional cash into Power Metal, meaning the exercise of warrants and the money generated has been applied to the expansion of our business. This is a theme we intend to continue with warrant monies enabling growth in the Power Metal business model.
The Silver Peak project is a material addition to the Power Metal portfolio, bringing a strategic silver project into our business, and one that offers much potential upside from positive future exploration work.
Power Metal, alongside the vendors, intend to push ahead expeditiously with exploration on the ground.
I would like to thank the vendors and the ground operational team for their work and commitment and it is a pleasure to work with proactive and supportive partners. We have achieved much in just a month and look forward to continuing progress as we gather more Project knowledge through imminent planned exploration.”
FURTHER INFORMATION
Option Agreement and Due Diligence Exploration Programme
| Background | On 17 August 2020 the Company announced it had entered into an option agreement (the “Option Agreement”) in respect of the Project.The Option Agreement provided Power Metal the Option of a 30-day exclusivity period for due diligence in respect of the Project providing Power Metal, on Option exercise, with a right to earn-in to a 30% interest in the Project.As part of this due diligence process the Company undertook an exploration programme at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential. |
| Project Overview | The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada. |
| Due Diligence Exploration Programme | The work programme included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (pXRF) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from the C$250,000 12-month project exploration spend as Power Metal has exercised the Option. |
| Option Exercise | Power Metal has now exercised the Option and can earn-in to a 30% Project interest. The transaction costs relating to Option exercise and the earn-in to the Project interests are outlined below. |
| Next Steps | Continue ongoing technical review and plan, prepare and launch an exploration drilling programme at the project, subject to the receipt of relevant approvals and permits. |
THE TRANSACTION TERMS
The Vendor
The Project is currently 100% owned by private vendors Michael Nugent and Jo Shearer (the “Vendors”).
Right to Earn-in
Power Metal will now make a payment of £129,683 to the Vendors comprising CAD$30,000 (£17,183) cash and £112,500 through the issue of 9,000,000 new Ordinary Shares (the “Option Exercise Shares”) at a price of 1.25p per Option Exercise Share.
In addition, the Vendors will be granted 9,000,000 warrants to subscribe for new Ordinary Shares in the Company at a price of 1.75p with a three-year life to expiry.
Power Metal must then spend CAD$250,000 (£143,193) on Project exploration, within 12 months (the “Exploration Spend”) and of this amount CAD$25,000 has already been expended on the due diligence exploration programme, leaving CAD$225,000 (£128,874) outstanding.
Acquisition of Project Interest
Subject to meeting the Exploration Spend and the receipt of satisfactory findings from exploration work, and by 31 August 2021, Power Metal may elect to acquire a 30% interest in the Project by making a final payment of CAD$200,000 (£114,554 and the “Final Payment”) with Power Metal having a choice to pay this in cash, or in Company shares, as follows.
Final Payment payable in cash:
– Power Metal can make a final cash payment of CAD$200,000.
– Should Power Metal make the Final Payment as cash, warrants will also be issued to the Vendors in such volume as equates to CAD$100,000 divided by the 7-trading day volume weighted average price of (“VWAP”) of Power Metal shares immediately preceding the day of announcing the acquisition of the Project interest and at a price that equates to a 30% premium to the 7-day VWAP and with a three year life to expiry.
Note: by way of example if the Acquisition of Project Interest Final Payment is paid as cash.
If the CAD/GBP translation rate on the acquisition date is 0.57277 then CAD$100,000 equals c.£57,277. If at that time the 7-day VWAP of Power Metal is 3.0p, then £57,277 divided by 3.0p would equate to 1,909,233 warrants to be issued, and the warrant exercise price would be 3.9p.
Final Payment payable in shares:
– By payment of CAD$200,000 (£114,554) through the issue of Power Metal shares at a price based on the 7-trading day VWAP preceding the date of announcing the acquisition of the Project interest (“Final Payment Shares”).
– Should Power Metal elect to make the Final Payment in Power Metal shares then the Vendors will be granted warrants to subscribe for new Ordinary Shares in such volume as equates to 50% of the Final Payment Shares and at an exercise price equating to a 30% premium of the issue price of the Final Payment Shares and with a three year life to expiry.
Note: by way of example if the Acquisition of Project Interest Final Payment is paid as shares.
If the CAD/GBP translation rate on the acquisition date is 0.57277 then CAD$200,000 equals £114,554. If at that time the 7-day VWAP of Power Metal is 3.0p, then £114,554 divided by 3.0p would equate to 3,818,467 new Ordinary Shares being issued to the Vendors.
In addition, 50% of the new Ordinary Shares would equate to 1,909,233 warrants to be issued, and the warrant exercise price would be 3.9p.
After the Acquisition of Project Interest
After completion of the Final Payment the ownership structure will be the Project Vendors 70% and Power Metal 30%. Both parties must contribute to exploration costs thereafter, in line with their ownership percentage, or dilute in accordance with standard industry dilution provisions.
The Vendors will retain a 2% Net Smelter Royalty over the total Project.
Summary of Transaction Costs
For ease of reference the Option exercise and earn-in costs are summarised below:
| When payable | Benefit Earnt | Vendor | Exploration | Overall | % | ||||
| Payments | Spend | Total | of | ||||||
| £ | £ | £ | Total | ||||||
| Option Exercise | Right to Earn-in | 129,683 | 129,683 | 33.5 | |||||
| Within 12 months | Right to Earn-in | 143,193 | 143,193 | 37.0 | |||||
| On acquisition of Interest | 30% Project Interest | 114,554 | 114,554 | 29.5 | |||||
| Overall Total (1) | 244,237 | 143,193 | 387,430 | 100% | |||||
(1) Excluding warrants issued in respect of the transaction, further details of which are provided above.
NEXT STEPS
Continue review of Project technical information, leading into an exploration drill programme at the Project.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.
ADMISSION AND TOTAL VOTING RIGHTS
Application will be made for the 9,000,000 Option Exercise Shares to be admitted to trading on AIM which is expected to occur on or around 21 September 2020 (“Admission”). Following Admission of the Option Exercise Shares, POW’s ordinary issued share capital will comprise 810,066,542 ordinary shares of 0.1 pence each.
This number will represent the total voting rights in the Company, and following Admission, 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. The new shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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 – Canadian Silver Project – Exploration Update
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce an update in respect of the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
HIGHLIGHTS:
– Due diligence silver focused exploration programme announced on 25 August 2020 has been safely and successfully completed
– A total of 11 channel samples were taken from the Victoria vein faces exposed in the cliffs and open stopes located vertically above the Victoria adit. Samples have been submitted to the accredited laboratory, ALS Global in Vancouver, for expedited assay testing, with results to follow;
– Power Metal technical team are reviewing the exploration work undertaken and the initial findings, subject to augmentation of findings with assay data;
– A photograph and video gallery has been established on the Power Metal website where images of the Project during the exploration programme have been uploaded with further images to follow. The gallery may be accessed through the following link:
https://www.powermetalresources.com/p/220/gallery
– Further update to the market will follow with due diligence findings and option exercise decision in the near term in line with the 30-day option period.
CHIEF EXECUTIVE OFFICER’S STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented
“We are pleased to report the completion of the sampling work on the Victoria vein, one of two main veins located at the Silver Peak Project in British Columbia, Canada.
The exploration work focussed on representative sampling of vein exposures located in the cliffs and workings situated vertically above the Victoria adit of the Eureka-Victoria Silver Mine. The work was conducted by contract geologist and technicians in challenging conditions and was documented by photographs, video and drone footage. A selection of these images and videos are being made available on the Power Metal website.”
FURTHER INFORMATION
Sampling Process
The samples which were cut across the width of the vein, perpendicular to the vein strike, using a petrol driven water cooled disk cutter, were taken from vein material deemed to be representative of the silver mineralisation at the location.
Sampling exercise on exposed vein faces was conducted safely by contractors using ladders and rope access techniques in the steeply dipping terrain. Sampling work was photographed and videoed for the purposes of work verification given the current travel restrictions;
Option Agreement and Due Diligence Exploration Programme
| Background | On 17 August 2020 the Company announced an option agreement (the “Option Agreement”) in respect of the Project.The Option Agreement provides Power Metal an option (the “Option”) of a 30-day exclusivity period for due diligence in respect of the Project. Should Power Metal decide to exercise the Option it will secure a right to earn-in to a 30% interest in the Project.As part of this due diligence process the Company has undertaken an exploration programme at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential. |
| Project Overview | The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada. |
| Due Diligence Exploration Programme | The work programme included various elements but is centred on channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (pXRF) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The work programme cost totalled C$25,000 (£14,512) and should Power Metal exercise the Option, the amount expended will be deducted from the C$250,000 12-month project exploration spend. |
| Targeted Outcome | Gather additional positive field exploration data and evidence to support due diligence review of the Project. |
Detailed Project Information
The Silver Peak Project consists of a portfolio of mineral claims covering an area of approximately 46.02 km2, over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.
The Project is located on Silver Peak Mountain which is 6 km south of the paved TransCanada Highway and the town of Hope. A good quality gravel municipal road along Silver Creek, passes by the entrance to the project mine access road. A logging/mining road which was upgraded in 2011, then extends upwards to the workings.
Originally discovered in the late 1860s the Silver Peak mines reportedly exploited near-surface oxide material ranging 500 to 658 oz/ton silver, via underground adits on two main veins varying in width from 1.5 to 6 m. Mining continued intermittently on a small scale under various ownership until 1981.
The property was subject to minor surface and underground sampling and mapping programmes between 2009 and 2011, confirming the tenor and extent of high grade silver mineralisation in the Eocene age conglomerate hosted siderite-tetrahedrite veins, with grab sample assays up to 22,600 g/t Ag(1).
Underground sampling in 2011 along the strike of the Victoria Vein returned a grade of 8,889 g/t Ag, with a grab sample from the Victoria Vein face assayed at 15,517 g/t Ag, 4.3% Pb, 2.94% Cu and 2,756ppm Bi. Bench scale metallurgical testwork in 2011 returned silver leach recoveries of up to 80% using a 0.4% Ag (4,000g/t) feed sample.([1])
Exploration Potential
Whilst the Project can demonstrate a long history of high grade silver production, the resource potential of the Eureka and the Victoria vein systems, which each range over 625m long, has never been formally assessed or drill tested at depth or along strike.
A systematic phased exploration programme is envisaged to test the resource potential of the Eureka and Victoria vein systems at depth and along strike.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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 – Business Operational Update
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to provide a Business Operational Update (the “Update”) to shareholders, outlining the current status of operations across the Company’s six existing projects and two projects under due diligence.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“Power Metal is an operationally diversified business with precious metal interests in North America and base metal interests in Africa. The Company has multiple live exploration programmes running and significant corporate activity underway.
The summary below outlines where we are across each project, and the anticipated next steps or developments which, where material, will be notified to shareholders through regulatory news announcements.
Power Metal is at a key stage in its development and aided by our strong underlying financial position, we are pushing ahead proactively across the business, seeking to secure a large-scale metal discovery.”
KEY HIGHLIGHTS
· Two significant drill programmes impending, in Botswana and Tanzania, targeting large-scale nickel sulphide targets and with current levels of local regulation allowing the Company to plan to commence drilling in 2020
· Significant advancement made in the Australia JV, with 2,188 km2 of ground under application in the Victoria Goldfields over 12 distinct project areas and a draft of the NI 43-101 technical report under review;
· Due diligence ground exploration programme underway at the Silver Peak project in Canada, where channel sampling for silver is the key focus and where exploration results are expected shortly and within the 30-day option period announced 17 August 2020;
· Reconnaissance survey completed successfully at the Alamo gold project in Arizona, USA reviewing the key areas where the bulk of gold nuggets were found in alluvium on the property. The findings have been received in a project report and are being reviewed currently. A market update will follow including next stage exploration plans;
· Power Metal remains in a strong financial position with working capital comprising cash and listed investments of circa £1.6 million;
· Further specific updates will be provided for each project as material developments occur.
OPERATIONAL UPDATE
Power Metal provides the following overview of its six main projects and two projects under due diligence.
Note: all exploration and corporate work is subject to COVID-19 restrictions which may impact work programmes and timescales. Power Metal and its partners are focused on the safety of operational teams and the conduct of programmes in line with local requirements in relation to COVID-19, and all applicable operational regulatory requirements.
| PROJECT | CURRENT OPERATIONAL STATUS |
| Australia JV – Victoria Goldfields(Gold)(POW holds a 49.9% interest in Australian JV Company Red Rock Australasia Pty Limited “RRAL”) | Twelve licence applications have been submitted by RRAL covering 2,188 km2 in the Victoria Goldfields with three licenses having completed the mandatory 14 day public advertising period. The JV team is working with Earth Resources Victoria to secure early grant of the advertised licenses to enable exploration to commence.Ten detailed historic exploration and target assessment reports now received from local consulting geologists (four reports have been released to the market and six are under review, and will be announced shortly).The NI 43-101 Technical Report covering seven key licenses is in final drafting stage and is expected to be received in final form in the coming week. The findings of this report will be released shortly after receipt and following internal review. Receipt of the Technical Report will also allow the potential listing of some or all of the JV interests to be progressed to the next stage.In addition, liaison with various external parties is underway with a view to further potential corporate transactions, including external joint ventures, in respect of certain license applications. |
| Botswana – Ditau Camp Project(RARE EARTHS)(Under Due Diligence)(Subject to due diligence POW may acquire a 51% project interest) | Power Metal remains in due diligence and related discussions with Kavango Resources plc (LON:KAV), the current 100% project owner, with a view to crystallising a transaction in respect of the Ditau Camp project.For clarity the due diligence period in respect of the Ditau Camp Project ends on 30 September 2020. |
| Botswana – Molopo Farms Complex Project(Nickel Copper PGMs)(POW holds 18.26% of project holding company Kalahari Key and additionally may earn in up to a 40% project interest) | Kalahari Key Mineral Exploration Pty Limited (“Kalahari Key”), the JV partner and current 100% project owner is making considerable progress in respect of planning for drill commencement at the Molopo Farms Complex Project (“MFC Project”).Drilling proposals have now been received from multiple contractors and a review is underway at present leading to contractor selection and thereafter, subject to rig availability, to confirmation of drill rig mobilisation at the earliest opportunity.The drill programme will be focused on high profile nickel sulphide targets within the Chipo area of the MFC project. |
| Cameroon – Cobalt Blue Project(Cobalt – Nickel)(POW holds a 100% project interest) | Power Metal is continuing to review the exploration and corporate options in respect of the Cameroon project interests and will provide a further update as material developments occur. |
| Canada – Silver Peak Project(Silver)(Under Due Diligence)(POW may earn in to a 30% project interest) | As part of the due diligence process Power Metal is funding an initial exploration programme at the Silver Peak project including channel sampling to help determine silver prospectivity.Initial results are expected from this programme in the next week and Power Metal will update the market upon completion of an internal technical review of findings. |
| The DRC – Kisinka Project(Copper – Cobalt)(POW holds a 70% project interest) | The Company is awaiting the receipt of assay results from the pitting and mapping programme conducted earlier this year. The results will help inform next stages of exploration on the ground at the 6.8km copper anomaly discovered within the Kisinka Project.The results so far justify the magnetic ground survey and electromagnetic (“EM”) survey the Company is currently planning in order to increase understanding of structure in the target area defined by the exploration to date.The license renewal was recently underway but the decision has been taken instead to convert the license to a Permis d’Exploitation (production license) with a 25 year life. 50% of the less prospective ground is being surrendered, leaving the Company with 41 carrés miniers (each 84.95 ha), |
| Tanzania – Haneti Project(Nickel – PGMs – Gold – Lithium)(POW holds a 35% project interest) | Power Metal is working with Katoro Gold plc (LON:KAT or Katoro) the JV partner in respect of the Haneti Project in Tanzania.Katoro are in the final stages of planning for drill commencement. Specifically, Katoro are seeking to confirm rig availability and confirmation of a drill mobilisation date.Power Metal and Katoro hope to confirm the launch of the drill programme to the market in the near term. |
| USA Arizona – Alamo Gold Project(Gold)(POW may earn in up to a 75% project interest) | A Reconnaissance Survey (“Survey”) has been completed successfully at the project in Arizona which was focused on a review of the key areas where the bulk of gold nuggets were found in alluvium on the property.The Survey report from the work undertaken has been received and is being reviewed.Power Metal are also working with its local partners to design the next stage exploration programme at the project based on the Survey report findings.Upon completion of our review of the Survey report and confirmation of the next stage exploration programme Power Metal will update the market in full. |
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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 – Canadian Silver Project – Exploration Commences
Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce an update in respect of the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
HIGHLIGHTS:
| Background | On 17 August 2020 the Company announced an option agreement (the “Option Agreement”) in respect of the Project.The Option Agreement provides Power Metal an option (the “Option”) of a 30-day exclusivity period for due diligence in respect of the Project. Should Power Metal decide to exercise the Option it will secure a right to earn-in to a 30% interest in the Project.As part of this due diligence process the Company today announces an exploration programme to commence shortly at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential. |
| Project Overview | The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada. |
| Due Diligence Exploration Programme | The work programme includes various elements but is centred on channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work will also include enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (pXRF) will be utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The work programme cost totals C$25,000 (£14,512) and should Power Metal exercise the Option, the amount expended will be deducted from the C$250,000 12-month project exploration spend. |
| Targeted Outcome | Gather additional positive field exploration data and evidence to support due diligence review of the Project. |
CHIEF EXECUTIVE OFFICER’S STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented
“We advised shareholders that accelerated due diligence would be undertaken at the Silver Peak Project and ordinarily we would have undertaken a site visit as we did with the Alamo gold project in Arizona. Given global travel restrictions, we are utilising a local team to undertake a short exploration programme gathering further information expeditiously, which we can add to the desk-based work we are undertaking.”
THE PROJECT
The Silver Peak Project consists of a portfolio of mineral claims covering an area of approximately 46.02 km2, over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.
The Project is located on Silver Peak Mountain which is 6 km south of the paved TransCanada Highway and the town of Hope. A good quality gravel municipal road along Silver Creek, passes by the entrance to the project mine access road. A logging/mining road which was upgraded in 2011, then extends upwards to the workings.
Originally discovered in the late 1860s the Silver Peak mines reportedly exploited near-surface oxide material ranging 500 to 658 oz/ton silver, via underground adits on two main veins varying in width from 1.5 to 6 m. Mining continued intermittently on a small scale under various ownership until 1981.
The property was subject to minor surface and underground sampling and mapping programmes between 2009 and 2011, confirming the tenor and extent of high grade silver mineralisation in the Eocene age conglomerate hosted siderite-tetrahedrite veins, with grab sample assays up to 22,600 g/t Ag(1).
Underground sampling in 2011 along the strike of the Victoria Vein returned a grade of 8,889 g/t Ag, with a grab sample from the Victoria Vein face assayed at 15,517 g/t Ag, 4.3% Pb, 2.94% Cu and 2,756ppm Bi. Bench scale metallurgical testwork in 2011 returned silver leach recoveries of up to 80% using a 0.4% Ag (4,000g/t) feed sample.([1])
Exploration Potential
Whilst the Project can demonstrate a long history of high grade silver production, the resource potential of the Eureka and the Victoria vein systems, which each range over 625m long, has never been formally assessed or drill tested at depth or along strike.
A systematic phased exploration programme is envisaged to test the resource potential of the Eureka and Victoria vein systems at depth and along strike.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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 – Option agreement for Canadian Silver Project, complements the Company’s Alamo Gold Project in Arizona, USA.
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 (the “Option Agreement”) in respect of the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
HIGHLIGHTS:
|
Project Overview |
The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada. Originally discovered in the late 1800s the Silver Peak mines reportedly exploited near-surface oxide material ranging 500 to 658 oz/ton silver. The underground mining via adits of the two main veins, varying in width from 1.5 to 6 m, continued on a small scale under various ownership until 1981. Underground sampling in 2011 along the strike of the Victoria Vein is reported as returning a grade of 8,889 g/t Silver with a grab sample from the Victoria Vein face assayed at 15,517 g/t Ag, 4.3% Pb, 2.94% Cu and 2,756ppm Bi.(1) Significantly both the Eureka and the Victoria vein systems which can be traced at surface for over 625 metres each, have yet to be drill tested below adit level, with mineralisation open at depth, and resource potential largely untested along strike. |
|
Transaction Basis |
The Option Agreement provides Power Metal an option (the “Option”) of a 30-day exclusivity period for due diligence in respect of the Project. Should Power Metal decide to exercise the Option it will secure a right to earn-in to a 30% interest in the Project. |
|
Strategic Purpose |
If the Option is exercised the transaction expands Power Metal operations into North American silver exploration focused around the first Crown-granted mineral property in British Columbia and a former high-grade working silver mine. |
|
Option Cost |
Acquisition of a 30-day Option for £26,819 with £12,500 payable through the issue of 1,000,000 Power Metal shares at a price of 1.25p (new ordinary shares of 0.1 pence each or “Ordinary Shares”) and £14,319 payable in cash. Further detailed transaction terms outlined below. |
|
Exploration Objective |
Investigate the potential of the project for silver mineralisation within known vein system, p ostulated extensions to the known system and to identify new zones of mineralisation. |
|
Next Steps |
Undertake accelerated due diligence and if due diligence is successful exercise the Option and implement an early exploration programme. |
CHIEF EXECUTIVE OFFICER’S STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented “The Option over the Silver Peak Project provides Power Metal and its shareholders with exposure to a silver project with previous history of production in a safe jurisdiction and with a number of well-defined exploration objectives.
“We enter this opportunity at a time when silver has been experiencing a significant increase in price and when the underlying value of silver projects is, in our view, going to follow.
“We also consider that this silver project complements the Company’s Alamo Gold Project interest in Arizona, USA, the agreement for which was signed and announced to the market recently and where exploration work is now underway.
“Taking both projects together, we are now beginning to build a robust North American precious metal focused portfolio, with strong exploration potential and backed by operational and advisory teams who are at the heart of mining and exploration in North America.”
THE PROJECT
The Silver Peak Project consists of a portfolio of mineral claims covering an area of approximately 46.02 km2, over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.
The Project is located on Silver Peak Mountain which is 6 km south of the paved TransCanada Highway and the town of Hope. A good quality gravel municipal road along Silver Creek, passes by the entrance to the project mine access road. A logging/mining road which was upgraded in 2011, then extends upwards to the workings.
Originally discovered in the late 1860s the Silver Peak mines reportedly exploited near-surface oxide material ranging 500 to 658 oz/ton silver, via underground adits on two main veins varying in width from 1.5 to 6 m. Mining continued intermittently on a small scale under various ownership until 1981.
The property was subject to minor surface and underground sampling and mapping programmes between 2009 and 2011, confirming the tenor and extent of high grade silver mineralisation in the Eocene age conglomerate hosted siderite-tetrahedrite veins, with grab sample assays up to 22,600 g/t Ag(1).
Underground sampling in 2011 along the strike of the Victoria Vein returned a grade of 8,889 g/t Ag, with a grab sample from the Victoria Vein face assayed at 15,517 g/t Ag, 4.3% Pb, 2.94% Cu and 2,756ppm Bi. Bench scale metallurgical testwork in 2011 returned silver leach recoveries of up to 80% using a 0.4% Ag (4,000g/t) feed sample(1).
(1) Data as reported in the National Instrument 43-101 Technical Summary Report on the Eureka-Victoria Mine Property 10.3.13
Exploration Potential
Whilst the Project can demonstrate a long history of high grade silver production, the resource potential of the Eureka and the Victoria vein systems, which each range over 625m long, has never been formally assessed or drill tested at depth or along strike.
A systematic phased exploration programme is envisaged to test the resource potential of the Eureka and Victoria vein systems at depth and along strike.
THE TRANSACTION TERMS
The Vendor
The Project is currently 100% owned by private vendors Michael Nugent and Jo Shearer (the “Vendors”).
Option
Power Metal has secured a 30-day Option period to undertake due diligence in respect of the Project.
The Option fee payable is a total of £26,819 payable as CAD$25,000 (circa £14,319) cash and £12,500 through the issue of 1,000,000 new Ordinary Shares in the Company at a price of 1.25 pence each (the “Option Shares”).
The CAD$25,000 cash payment includes approximately CAD$6,670 to cover the cost of additional claims to increase the Project footprint which have now been secured and are included in the Project description above.
Right to Earn-in
Power Metal may within the 30-day Option period, exercise its right to earn-in to a project interest and upon exercise will make a further payment of £129,683 to the Vendors comprising CAD$30,000 (£17,183) cash and £112,500, through the issue of 9,000,000 new Ordinary Shares (the “Option Exercise Shares”) at a price of 1.25p per Option Exercise Share.
In addition, on exercise the Vendors will be granted 9,000,000 warrants to subscribe for new Ordinary Shares in the Company at a price of 1.75p with a three-year life to expiry.
Power Metal must then spend CAD$250,000 (£143,193) on Project exploration, within 12 months of the Option exercise date (the “Exploration Spend”).
Acquisition of Project Interest
Subject to meeting the Exploration Spend and the receipt of satisfactory findings from exploration work, and by 31 August 2021, Power Metal may elect to acquire a 30% interest in the Project by making a final payment of CAD$200,000 (£114,554 and the “Final Payment”) with Power Metal having a choice to pay this in cash, or in Company shares, as follows:
Final Payment payable in cash:
– Power Metal can make a final cash payment of CAD$200,000.
– Should Power Metal make the Final Payment as cash, warrants will also be issued to the Vendors in such volume as equates to CAD$100,000 divided by the 7-trading day VWAP of Power Metal immediately preceding the day of announcing the acquisition of the Project interest and at a price that equates to a 30% premium to the 7-day VWAP and with a three year life to expiry.
Note: by way of example if the Acquisition of Project Interest Final Payment is paid as cash.
If the CAD/GBP translation rate on the acquisition date is 0.57277 then CAD$100,000 equals £57,277. If at that time the 7-day VWAP of Power Metal is 3.0p, then £57,277 divided by 3.0p would equate to 1,909,233 warrants to be issued, and the warrant exercise price would be 3.9p.
Final Payment payable in shares:
– By payment of CAD$200,000 (£114,554) through the issue of Power Metal shares at a price based on the 7-trading day VWAP preceding the date of announcing the acquisition of the Project interest (“Final Payment Shares”).
– Should Power Metal elect to make the Final Payment in Power Metal shares then the Vendors will be granted warrants to subscribe for new Ordinary Shares in such volume as equates to 50% of the Final Payment Shares and at an exercise price equating to a 30% premium of the issue price of the Final Payment Shares.
Note: by way of example if the Acquisition of Project Interest Final Payment is paid as shares.
If the CAD/GBP translation rate on the acquisition date is 0.57277 then CAD$200,000 equals £114,554. If at that time the 7-day VWAP of Power Metal is 3.0p, then £114,554 divided by 3.0p would equate to 3,818,467 new Ordinary Shares being issued to the Vendors.
In addition, 50% of the new Ordinary Shares would equate to 1,909,233 warrants to be issued, and the warrant exercise price would be 3.9p.
After the Acquisition of Project Interest
After completion of the Final Payment the ownership structure will be the Project Vendors 70% and Power Metal 30%. Both parties must contribute to exploration costs thereafter, in line with their ownership percentage, or dilute in accordance with standard industry dilution provisions.
The Vendors will retain a 2% Net Smelter Royalty over the total Project.
Summary of Transaction Costs
For ease of reference the overall transaction costs are summarised below:
|
When payable |
Benefit Earnt |
Vendor |
Exploration |
Annual |
% |
||||
|
Payments |
Spend |
Total |
of |
||||||
|
£ |
£ |
£ |
Total |
||||||
|
Signing Option Agreement |
30-day Option |
26,819 |
26,819 |
6.5 |
|||||
|
Option Exercise |
Right to Earn-in |
129,683 |
129,683 |
31.3 |
|||||
|
Within 12 months |
Right to Earn-in |
143,193 |
143,193 |
34.5 |
|||||
|
On acquisition of Interest |
30% Project Interest |
114,554 |
114,554 |
27.7 |
|||||
|
Overall Total |
271,056 |
143,193 |
414,249 |
100% |
|||||
NEXT STEPS
Power Metal will now undertake accelerated due diligence and i f due diligence is successful it is the Company’s intention to exercise the Option securing the right to earn-in to a project interest and then implement an early exploration programme.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.
ADMISSION AND TOTAL VOTING RIGHTS
Application will be made for the 1,000,000 Option Shares to be admitted to trading on AIM which is expected to occur on or around 24 August 2020 (“Admission”). Following Admission of the Option Shares, POW’s ordinary issued share capital will comprise 772,216,542 ordinary shares of 0.1 pence each.
This number will represent the total voting rights in the Company, and following Admission, 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. The new shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.
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.
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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.
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.