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Power Metal Resources #POW – Australian Copper-Gold Acquisition – Update
Presentation Released Highlighting Geological Potential of Acquisition Projects and Specifically Havieron Comparable Bullseye Magnetic Targets Within the Wallal Project
Power Metal Resources plc (LON:POW), the AIM listed metals exploration and development company has prepared an information presentation covering the Australian Copper-Gold projects in the Paterson Region ( “Paterson”) of Western Australia.
This information presentation may be viewed through the following link:
https://www.powermetalresources.com/presentation/first-development-resources-pdf/
The Paterson projects are held by First Development Resources Pty Ltd (FDR Australia) and include Wallal Project (three licence applications being Wallal-E45/5816, Wallal West 1-E45/5853 and Wallal West 2 – E45/5853), Braeside West Project (one licence application) and the Ripon Hills Project (one granted licence).
On 28 April 2021 Power Metal announced a conditional acquisition of FDR Australia and this may be viewed through the following link:
PRESENTATION HIGHLIGHTS:
Regional Background
· Paterson widely regarded as one of the most prospective provinces in Australia for the discovery of world class gold-copper deposits.
· Paterson is home to several world class mines and recent discoveries including the following which host JORC compliant resources: Winu (Rio Tinto – 503Mt at 0.45% CuEq1), Havieron (Greatland Gold – 4.2Moz AuEq1), Telfer (Newcrest Mining – 31Moz Au).
Wallal Project
§ Wallal Project (the “Wallal”) transacted by Highway 1 and is located less than 200km from Port Hedland, Australia and shares an extended border with Rio Tinto Exploration licence footprint.
Magnetic Targets Identified at Wallal
· Major Au-Cu deposits within the Paterson Province, including Winu (Rio Tinto) and Havieron (Newcrest Mining-Greatland Gold JV) were evaluated in comparison to the Wallal Eastern Magnetic Anomaly.
· Open-file publicly available airborne magnetic dataset (TMIRTP2 5km High-Pass) identified two highly prospective bullseye3 magnetic targets within Wallal.
· The Western Anomaly is over 5.5km in diameter; and the Eastern Anomaly is 2.5km in diameter and is located at the transect of two northwest-southeast trending magnetic linear anomalies (comprising possible major structures).
· Greatland Gold’s Havieron deposit is coincident with a magnetic bullseye anomaly which was detected by an airborne magnetic survey flown over the region.
· The Havieron and Wallal anomalies have similar amplitude: approximately 80nT (nanoTesla) for Havieron and 100nT for the Wallal Eastern Anomaly. The Wallal Eastern Anomaly is slightly larger than the anomaly over the Havieron deposit.
· Direct comparisons between Wallal and Havieron (geophysical)/Winu (geological), bode well for prospectivity of the Eastern Magnetic Anomaly bullseye.
· Additional geophysical inversions are ongoing and various geophysical datasets are being acquired in order to better determine orientation and depth of these compelling geophysical targets prior to drilling.
BACKGROUND TO FDR AUSTRALIA AND PLANNED CORPORATE ACTIVITY
FDR Australia is a private Australian company with 100% ownership (or the right to acquire 100% ownership) in five exploration licence interests in the Paterson Province, East Pilbara, Western Australia. The projects include Wallal (three licence applications), Braeside West (one licence application) and Ripon Hills (one granted licence).
Power Metal announced the conditional acquisition of FDR Australia on 28 April 2021 and is working with its Australian partners to finalise matters precedent on the acquisition including the grant of the Wallal licence application.
Good progress is being made with all matters including finalisation of Heritage Agreements locally which are necessary prior to formal grant, including the key initial licence at Wallal where it is anticipated first drill targets will be established.
On completion of the acquisition FDR Australia will be acquired outright by a newly formed private UK company First Development Resources Limited (“FDR UK”) in which Power Metal will have a 75% interest.
Following completion of the acquisition above, the intention is to arrange an initial public offering (“IPO”) of FDR UK in the London capital markets targeting Autumn 2021 and the Company is taking preparatory steps to enable that proposed listing.
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: CuEq or AuEq: Copper Equivalent grade (CuEq), Gold Equivalent grade (AuEq): Equivalent grades are often employed where a deposit is comprised of several different metals which have the potential to each contribute economic value to the deposit. The equivalent value of the individual minor metals is converted via a formula to a single major metal, usually the major metal which is the most economically dominant in the deposits. The formula used can vary but often employs metal prices and metal recoveries. ASX-listed companies are able to report metal equivalent grades provided they are accompanied by: all individual metal assays; commodity price assumptions; assumed recoveries; the formula; and confirmation that there is good potential for all metals to be recovered.
2: TMIRTP : Total magnetic intensity (TMI) reduced to pole (RTP) relates to the magnetic geophysics data processing methods employed for interpretation of the raw survey data.
3: Bullseye: A bullseye magnetic target is a distinct high-intensity anomaly comprising concentric circular bands of high gradient magnetic intensity surrounding a central point. The analogy is with a dartboard bullseye which presents a distinct central target.
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 and development company seeking large scale metal discoveries
The Company has a global portfolio of project interests including precious, base and strategic metal exploration in North America, Africa and Australia. Project interests range from early stage greenfield exploration to later stage exploration prospects subject to 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 – 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 for shareholders.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc, commented:
“In the tables below you will see the Power Metal project portfolio, the key value drivers in our business and, the latest position regarding each project interest. The Company portfolio is focused on Africa, Australia and North America; all considered to be great exploration, development and mining destinations.
Whilst each project has individual qualities, many are targeting the discovery of large metal deposits with follow-on district scale potential. The key drivers for our project acquisitions have been positioning and timing, taking strategic footholds before regional popularity strikes.
As we have seen recently with our interests in the Kalahari Copper Belt Botswana, the Victoria Goldfields Australia and the Hemlo-Schreiber Greenstone Belt Canada, early positioning places the Power Metal business in an incredibly strong position.
We have in the last year undertaken extensive exploration with some notable results including significant nickel sulphide intersections from drilling at Molopo Farms Complex Botswana and bonanza grade silver (up to 14,937 g/t silver) from channel sampling at Silver Peak Canada.
We have extensive exploration planned in 2021 including drilling across much of our portfolio. It is worth noting that many of our projects now sit on the cusp of potential discoveries. An exciting time for any junior resources company.
Alongside exploration our corporate work continues at pace focused on the spin-out and IPO activities for certain project interests.
In summation we are, in my view, bursting at the seams with discovery potential and crystallisable value and the balance of 2021 is the proving ground for this opinion.”
Note: in addition to the material presented below, investors are guided to the Power Metal corporate presentation which is available on the Company’s website through the following link:
https://www.powermetalresources.com/presentation/
KEY VALUE DRIVERS
Table 1 below briefly summarises the key value drivers across the Company’s portfolio. Further detailed project information including supporting information behind the value drivers is provided in Tables 2, 3 and 4 later in the announcement.
Table 1 – Key Value Drivers by Project
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Project |
Key Value Drivers |
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AFRICA |
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Molopo Farms Complex (Nickel – Copper – PGE) |
– Update following completion of technical work and review of initial drill programme data including testwork being carried out on holes K1-6, K1-14 and K1-11a sulphide mineralisation zones – Next steps exploration to understand the potential scale of the mineralisation identified |
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South Ghanzi (Copper – Silver) |
– Planned exploration drilling at South Ghanzi targeting copper-silver discoveries subject to approval of the Environmental Management Plan – Updates regarding IPO of holding JV company Kanye Resources plc |
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Ditau Camp (Rare Earths) |
– Release of exploration findings – Subject to exploration results, drilling of carbonatite and rare earth deposit targets |
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Tati Project (Gold – Nickel) |
– Results from due diligence exploration programme including infill geochemical surveys targeting newly identified significant gold and nickel anomalies |
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Kisinka (Copper – Cobalt) |
– Exploration drilling at Kisinka targeting a copper-cobalt discovery |
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Haneti Project (Polymetallic) |
– Exploration drilling at Haneti targeting a nickel sulphide discovery |
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AUSTRALIA |
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Paterson Province (Gold – Copper) |
– Release of exploration findings including technical comparisons of Wallal targets with regional discoveries including the Winu and Havieron deposits – Updates regarding IPO of UK holding company |
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Victoria Goldfields (Gold) |
– Exploration programme initial results – Updates regarding IPO of core interests |
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NORTH AMERICA |
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Hemlo-Schreiber (Gold – Nickel) |
– Exploration updates |
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Silver Peak (Silver) |
– Completion of Silver Peak drill programme (commenced Q4 2020 but halted due to poor weather) – Updates regarding IPO of Silver Peak on a recognised stock exchange |
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Golconda Summit (Gold) |
– Launch of ground exploration targeting near surface high grade gold mineralisation to validate historic work following receipt of permits |
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Garfield/Stonewall (Gold – Copper – Silver) |
– Launch of exploration programmes |
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Alamo (Gold) |
– Launch of next stage exploration following receipt of permits |
PROJECT OPERATIONAL UPDATE
Tables 2, 3 and 4 below summarise the latest status of each project within the Company’s portfolio.
Table 2 – African Projects – Latest Position
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Project |
Latest Position |
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Molopo Farms Complex Project Botswana (Nickel – Platinum Group Elements (PGEs)) POW: Effective Economic Interest 50.8% |
Power Metal participated in the Molopo Farms Complex (MFC) Project as it provided exposure to a new nickel sulphide – Platinum Group Elements (“PGE”) project in south-west Botswana. The layered ultramafic-mafic intrusion constituting the Molopo Farms Complex holds the potential for a significant nickel discovery, and the ground held within the project licences is interpreted as the feeder zone. Exploration diamond drilling commenced in Q4 2020 and to date the Company has announced significant nickel sulphide intersections from the second hole drilled, K1-6 . To encounter intervals with the highest nickel grades found to date in the MFC so early in the initial 3 hole drill programme was an outstanding result reflecting the significant investment in preparatory research and exploration prior to drilling. Much ongoing technical work is being undertaken and further results will follow from testwork being carried out on holes K1-6, K1-14 and K1-11a with market updates expected in the near term. Following completion of the first drilling phase technical work the next stage of exploration is to build an understanding of the potential scale of the mineralisation identified and work towards defining a Mineral Resource. This next stage is perhaps the most exciting phase of the project exploration. It is now confirmed that the nickel sulphides sought are present, so now we must seek to delineate an economic deposit through further drilling, which is likely to be preceded by a soil geochemistry programme focussed on the area between K1-14 and K1-6. Clearly if successful, the value of this project may well be transformational for all parties with an ownership interest, including Power Metal. Power Metal holds its 50.8% effective economic interest through a direct 40% project stake and through an 18% interest in the orginal project holding company Kalahari Key Mineral Exploration (Pty) Limited, a private Botswana Company (“Kalahari Key”). As announced 6 May 2021 Kalahari Key is to be restructured to reflect the 40% Power Metal project interest and the Company is actively engaged on commercial work streams in respect of this restructuring. |
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South Ghanzi Project Botswana (Copper – Silver) POW: 50% |
The South Ghanzi Project covering a footprint of some 1,294 km2 provides Power Metal with exposure to potential copper – silver discoveries within the prolific Kalahari Copper Belt (“KCB”) alongside joint venture (“JV”) partner Kavango Resources plc (LON:KAV). Power Metal’s CEO Paul Johnson was CEO of Metal Tiger Plc in 2016 when they and ASX listed JV partner MOD Resources made the T3 Deposit discovery nearby in the KCB. The South Ghanzi Project is following a similar exploration methodology to the T3 discovery. Exploration work at South Ghanzi includes airborne electromagnetic (“AEM”) surveys that have identified eight anomalies representing targets for further ground based exploration. Follow up soil sampling work has so far has been focused on two targets, Acacia and Morula, with both targets showing significant zinc and copper in soils which closely follow the structures identified through the AEM work. Both targets present significant scale soil anomaly targets, Acacia measuring 4 km by 4 km and Morula about 2 km wide by 12 km long (open at both ends). They will both be subject to exploration drilling following approval of the project Environmental Management Plan (“EMP”). In addition on 29 March 2021 Power Metal and JV partners announced two conditional agreements to acquire a 100% interest in eight prospecting licences to significantly expand the KCB land footprint and work continues to finalise these transactions.
The South Ghanzi Project interest is held through JV vehicle Kanye Resources Pty Limited in Botswana, which is held outright by Kanye Resources plc, a UK public company. Currently the licences in respect of South Ghanzi are being transferred into Kanye Resources Pty Limited.
The JV partners are working on an initial public offering (“IPO”) of Kanye Resources plc in the UK capital markets.
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Ditau Camp Project Botswana (Rare Earths) POW: 50% |
The Ditau Camp Project (“Ditau”) is a rare earths exploration project with licences covering a footprint of 1,386 km2 and held in JV with Kavango Resources plc, as with the South Ghanzi Project. Ditau provides Power Metal with exposure to a potentially large scale rare earths opportunity in a secure operating jurisdiction just at the time that secure and stable sources of rare earths are in demand globally. Exploration work continues at Ditau with soil sampling and ground magnetic surveys investigating ten potential carbonatite targets. Further market updates covering the results of exploration findings are expected in the near term.
Following completion of the current work programmes the JV partners expect to undertake shallow drilling to test for the presence of carbonatites and potential rare earth elements. The Ditau interest is held through the same JV holding company structure as the South Ghanzi Project above. |
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Tati Project Botswana (Gold – Nickel) POW: Option to Aquire 100% |
Power Metal announced on 6 May 2021 a 60 business day option (the “Tati Option”) to acquire a 100% interest in two gold-nickel focused exploration properties in the Tati Greenstone Belt area of eastern Botswana, subject to due diligence (the “Tati Project”). The properties comprise two prospecting licences covering 124 km2. A historical data compilation on the properties, completed as part of the due diligence process, has led to the identification of several kilometre-scale nickel, arsenic and gold in-soil anomalies on both properties.
As a result, immediate ground based exploration is being undertaken to include infill geochemical survey grids, as well as mapping and prospecting over these newly delineated geochemical anomalies.
Further market updates will be provided in respect of this due diligence exploration programme in the near term.
Should Power Metal exercise the Tati Option, it will hold the interest in the Tati Project through the newly formed, 100% owned Botswana private subsidiary, Power Metal Resources Botswana Pty Limited. Upon the Tati Option exercise the plan would be to undertake exploration drilling at the project.
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Kisinka Project The DRC (Copper – Cobalt) POW: 70% |
Exploration work undertaken since 2019 has delineated a 6.8 km copper-cobalt soil anomaly through the heart of the single licence representing the Kisinka Project. It was previously planned to follow-up the recently completed ground magnetics survey with in an induced polarisation geophysics survey, however following a review of the data sets it is considered that progressing work straight to drill testing is warranted. This drill programme is being planned at present and a further update will be provided in due course. The Kisinka Project has secured a 25 year Permis d’Exploitation (or Production Licence) which will significantly enhance the value and flexibility of the project should drilling lead to a discovery. |
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Haneti Project Tanzania (Polymetallic) POW: 35% |
A Rotary Air Blast (“RAB”) 1,965m drill programme was successfully completed at the Haneti Project in early 2021 and the results announced on 7 April 2021. The project is held with JV partner Katoro Gold Plc (LON:KAT). The next step at the Haneti Project is deep diamond drilling in order to assess the potential for economic nickel sulphide mineralisation.
Power Metal is eager to undertake this diamond drill programme and is working with its JV partner to secure commencement of this at the earliest opportunity.
Further work is ongoing with regard to other opportunities at Haneti, which as a polymetallic opportunity also has prospectivity for gold, lithium and rare earths.
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Table 3 – Australian Projects Latest Position
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Project |
Latest Position |
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Paterson Province Western Australia (Gold – Copper) POW: 75%
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First Development Resources Pty Limited (“FDR Australia”) is a private Australian company with 100% ownership (or the right to acquire 100% ownership) in five exploration licence interests (1 granted licence Ripon Hills and 4 licence applications namely Wallal, Wallal West 1, Wallal West 2 and Braeside West) in the Paterson Province, East Pilbara, Western Australia. Power Metal announced the conditional acquisition of FDR Australia on 28 April 2021 and is working with its Australian partners to finalise matters precedent on the acquisition including the grant of the Wallal licence application. Good progress is being made with all matters including finalisation of Heritage Agreements locally which are necessary prior to formal grant. FDR Australia will be acquired outright by a newly formed private UK company First Development Resources Limited (“FDR UK”) in which Power Metal will have a 75% interest. Following completion of the acquisition above, the intention is to IPO FDR UK in the London capital markets and we are taking preparatory steps to enable that proposed listing. Alongside the corporate work underway the Power Metal team have also been undertaking a detailed review of exploration data to date, planning principally for drilling of key gold-copper targets. The Paterson Province is well known for two recent and significant gold-copper discoveries, namely the Winu discovery by Rio Tinto and the Havieron discovery by Greatland Gold plc (LON:GGP). A desktop review has identified numerous geological analogues between the Wallal Project (comprising three licence applications) held by FDR Australia and both the Winu and Havieron discoveries. Notably, the magnetic properties of the Havieron discovery were evaluated in comparison to the Wallal Eastern magnetic anomaly which was identified during the recent desktop analysis. The magnetic amplitude and size of this anomaly was determined to be comparable (Havieron; diameter – 1 km, amplitude – 80nT, Wallal; diameter – 1.5 km, amplitude – 100nT). Additionally, the geological position of the Winu discovery was determined to be similar to that of Wallal, which includes a position along the western margin of a major shelf (Winu – Anketell Platform, Wallal – Wallal Platform). The Company is reviewing findings in conjunction with its partners in Australia and expects to release a market update in this regard in the near term. |
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Victoria Goldfields Victoria, Australia (Gold) POW: 49.9% |
This opportunity is held in JV with Red Rock Resources plc (LON:RRR) and represents one of the largest land footprints at the heart of the high profile Victoria Goldfields in Australia. The footprint totals some 2,334 km2 comprising an original sixteen licence applications from which, to date, seven licences covering 848 km2 have now been granted. Having licences granted enables ground exploration work to be launched and we now have an active programme of exploration underway including soil sampling and mapping across the granted licence areas. Historical data demonstrates the presence of gold mineralisation across all the licence areas, with evidence of historical mine workings across the properties. Programme planning which is being led by the exploration team, all of whom are residents of Victoria, is utilising the extensive regional and historical exploration datasets and mining records available, combined with local knowledge and land holder relationships. The holding company for the JV is Red Rock Australasia Pty Limited (“RRAL”) and RRAL is working on the IPO process for certain core interests of RRAL on the Canadian capital markets. This listing recognises the attractiveness of the Victoria Goldfields area amongst Canadian investors and institutions, with numerous listed companies on the Canadian Securities Exchange (“CSE”) and Toronto Stock Exchange (“TSX”) having achieved success on the markets with business models focused on exploration in the Victoria Goldfields. To facilitiate this listing process RRAL have previously completed a National Instrument 43-101 technical report on eight of the licence areas (four now granted licences and four licence applications) and this report will form a key part of the listing documentation. RRAL is working with advisors to complete the work streams necessary for the listing and will be providing further market updates in the near term in connection with this workflow. Based on the valuation of listed peers who have a focus on the Victoria Goldfields, Power Metal believe the Victoria Goldfields JV to hold considerable value for the Company and our partners Red Rock Resources plc. Note: in addition to the Victoria Goldfields interests described above RRAL has also submitted three licence applications in the Pilbara/Paterson region of Western Australia. Two applications (260 km2) are competing and therefore subject to ballot and one has RRAL as sole applicant (70 km2). The strategic plans for the three Western Australia licences are under review at present however it is likely that RRAL will seek to house these licences under a new vehicle in due course to allow the core interests of RRAL to move into the Canadian IPO process with focus on the Victoria Goldfields. |
Table 4 – North American Projects Latest Position
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Project |
Latest Position |
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Hemlo-Schreiber Project Ontario, Canada (Gold – Nickel) POW: 100% |
In Q1 2021 Power Metal moved quickly to secure a 100% interest in seven properties in the heart of the Hemlo-Schreiber Greenstone Belt in Ontario, Canada. All properties are held by Power Metal Resources Canada Inc. (“Power Metal Canada”) a newly formed wholly owned subsidiary of Power Metal. The seven properties have been allocated into five projects including Hemlo North, McKeller, Coco-East, Enable and Magical. Hemlo North is a package of three properties (Dotted East, Roger Lake and Olga Lake). London listed Panther Metals (LON:PALM) are planning to drill gold targets just to the west of Hemlo North and just to the East, Palladium One Mining (TSX:PDM) has recently announced excellent data from drilling, including significant nickel sulphide intersections. The accelerated building of the Hemlo-Schreiber Project has been validated by the level of interest shown in the area in 2021 with a number of companies securing ground in the area. The Hemlo-Schreiber Project has attracted interest already with third party approaches with regard to certain of the projects in the Hemlo – Schreiber portfolio held by Power Metal Canada. This further demonstrates the building interest in the region. Alongside any corporate discussions Power Metal Canada are planning to implement first stage exploration programmes for the five projects in the summer/early autumn period of 2021 and a further market update will be provided on this when appropriate. |
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Silver Peak Project British Columbia, Canada (Silver) POW: 30% |
In September 2020 Power Metal exercised an option allowing it to earn-in to a 30% holding in the Silver Peak Project. The Company considered Silver Peak, incorporating a former high grade working silver mine, would be a valuable addition to the Power Metal portfolio. Exploration findings ratified that decision with assay results of up to 14,937 g/t silver from channel sampling from historically mined veins and up to 5,270 g/t silver from drill samples. On 15 March 2021 the Company announced it was to accelerate the earn-in and has now made all related payments and holds a 30% interest in the project. Power Metal and partners are working towards the planned IPO of the Silver Peak Project on a recognised stock exchange and work is underway in this regard. The Company is also working with our partners to complete the drill programme commenced in Q4 2020 but paused due to weather conditions in the project area. Further corporate and exploration updates are expected in respect of Silver Peak in the near future. |
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Golconda Summit Project Nevada, USA (Gold) POW: Earn-in to 100% |
On 1 June 2021 Power Metal announced the signing of an Assignment and Assumption agreement where the Company acquired an option enabling it to earn-in to a 100% interest in the Golconda Summit gold property (“Golconda”) in Nevada, USA. Golconda is located approximately 15km east of to the town of Winnemucca, at the confluence of the prolific Battle Mountain-Eureka Trend and Getchell Trends and within Nevada’s Great Basin metallogenic province which is one of only six global gold belts hosting gold endowments of +200 Moz.
Previous exploration work on the Golconda property encountered significant gold mineralisation including trench assay results of 7.6m @ 24.0g/t gold and 15.2m @ 8.6g/t gold, as well as shallow drilling results of 10.7m @ 3.9g/t gold. Reflecting all the above, the low cost of entry and modest ongoing costs Power Metal considered the acquisition of the Golconda interest was an important transaction for the Company, providing exposure to a highly prolific gold producing region in Nevada. Subject to the receipt of appropriate permits, ground exploration will commence shortly with a principle focus on the validation of the historic exploration findings and demonstration of high grade, near surface gold mineralisation. The Golconda property agreement is held by Golden Metal Resources Limited (“Golden Metal UK”), a UK private company and 100% owned subsidiary of Power Metal which will be the ultimate holding company for all Power Metal Nevada interests. |
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Garfield/Stonewall Projects Nevada, USA (Gold – Copper – Silver) POW: 100% |
The Company announced on 17 June 2021 the acquisition of a 100% interest in the Garfield and Stonewall Projects in Nevada USA. These are prospective for gold, copper and silver. The projects were acquired by Golden Metal Resources llc (“Golden Metal Nevada”) a newly formed 100% owned subsidiary of Golden Metal UK. Golden Metal Nevada will be the local operating company of Golden Metal UK. The Garfield and Stonewall Projects are located in the prolific Walker Lane mineral belt which hosts several world class gold-silver epithermal (Comstock Lode, Tonopah), copper-gold porphyry (Anaconda), and iron-oxide-copper-gold deposits (Pumpkin Hollow).
Taken with the Golconda Summit gold project above, Power Metal through its Golden Metal subsidiaries now has a trio of projects within its Nevada focused business model.
Exploration work is planned for the projects following completion of the work planned at Golconda. This includes soil chemical sampling, trenching and drilling.
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Alamo Project Arizona, USA (Gold) POW: Earn-in to 75% |
Power Metal signed an agreement in July 2020 to earn-in to a maximum 75% interest in the Alamo Project in Nevada USA where the project was considered prospective for gold following the discovery of native gold nuggests near surface in multiple locations across the property. Reflecting additional information acquired through the ground exploration work undertaken over the last year, additional claims have been added to increase the property size and to ensure coverage of prospective areas. A further planned exploration programme has been developed and will commence subject to the receipt of relevant permits. This programme is expected to include trenching on one area of the Alamo Project, with associated sampling, assaying and mapping and the drilling of a number of short percussion holes to test for gold and silver mineralisation. For this work to be completed a Notice Level Plan of Operations permit is required prior to commencement.
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ADDITIONAL OPPORTUNITIES
Power Metal has access to an extensive pipeline of new opportunities.
However, given the strength, depth and diversity of the Company’s existing portfolio Power Metal will only acquire further interests if there is a significant strategic reason to do so. That strategic reason could be the inherent substantial value of a new project or where an acquisition would fit well with other currently held interests, particularly if that would add value to a corporate spin-out package.
In this regard and at present, Power Metal is currently in discussions with third parties in respect of a lithium exploration project in Canada and potential new gold exploration opportunities in and around Nevada USA. Unless and until any formal transaction is agreed and announced there can be no certainty that any additional interests will be acquired.
Alongside the main Company acquisitions, it is noted that Power Metal has set up Power Capital Investments Limited (“Power Capital”) a new 100% owned resource project incubator subsidiary (announced 4 May 2021). This was formed to provide a means to continue engagement with smaller but potentially valuable resource opportunities.
A maximum investment level of £100,000 per opportunity has been set and a minimum 50% Power Capital holding interest in any opportunitiy following Power Capital’s investment.
A further update specifically in respect of Power Capital’s operations will be provided in due course.
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:
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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 and development company seeking a large scale metal discovery.
The Company has a global portfolio of project interests including precious and base 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.
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 – Interim Results for 6 months ended 31 March 2021
Power Metal Resources plc the AIM listed metals exploration and development company is pleased to announce its unaudited interim results for the six months ended 31 March 2021.
Statement by Paul Johnson, Chief Executive Officer:
“In the six months ended 31 March 2021 we have pushed the Power Metal business to explore extensively across its project portfolio with, in our view, some excellent and very fortunate findings. We are seeking large scale metal discoveries with the emphasis on plural as we believe our portfolio is capable of delivering a number of discoveries.
Junior resource exploration is a high-risk endeavour, so investors in Power Metal rightly expect the potential for outsized returns that come with discoveries and to achieve them requires proactivity and investment in exploration.
Since October 2020 we have invested in exploration work in every single project we hold an interest in including three separate drill programmes across interests in Botswana, Canada and Tanzania. There are more planned drill campaigns in the coming months.
Notable exploration successes announced to date include the identification of extensive anomalies from the Kalahari Copper Belt, Botswana (held in JV with Kavango Resources plc), significant nickel drill intersections from Molopo Farms Complex Project, Botswana, and bonanza grade silver from the Silver Peak Project, Canada. These are by no means the only successes and as noted above we have been very fortunate with early exploration success across our portfolio.
Notwithstanding the exploration progress being made, and our search for large scale metal discoveries, we are also running a commercial enterprise that has to balance the books and generate working capital to fund its operations.
We recognise the value of the London capital markets providing access to additional finance and that is one of the principal reasons junior resource companies list. That said we are also looking to build our working capital organically through targeted growth in our investment portfolio and the spin-out of certain projects into their own listed vehicles.
Financial strength for a junior exploration company is important and as at 21 May 2021 Power Metal had working capital of circa £2.57 million, representing cash and listed company investments. This robust working capital figure was notwithstanding the material expenditure on exploration and corporate development in the half year ended 31 March 2021.
We seek size and scale in our business through metal discoveries in district scale exploration and innovative corporate activity. To do this we have recognised the need to build our operational team and now have an in-house Exploration Manager, Investor Relations Manager and Corporate Spin-Out Management. The expanded team is intensively engaged on delivering growth in our business through our project portfolio.
I would like to thank the board and Power Metal team for their determined dedication to our business objectives. The support we receive from our advisor network continues to be first rate and needs to be as Power Metal is a proactive company.
As always, and never to be left unsaid, I thank our shareholders for their support and commitment to the Power Metal business and its ambitions. It is easy to be ordinary, yet we have no such desire, and with the support of our shareholders we aim to make Power Metal a stand-out performer demonstrating how an ambitious, determined junior resource company can deliver.”
Power Metal Interests at today’s date:
|
Country |
POW % |
Project |
Resources Targeted |
|
Australia |
49.9% |
Victoria Goldfields |
Gold |
|
Australia |
75%(1) |
Paterson Province |
Copper – Gold |
|
Botswana |
50.8%(2) |
Molopo Farms Complex |
Nickel – Copper – Platinum Group Metals (PGMs) |
|
Botswana |
50% |
Kalahari Copper Belt |
Copper – Silver |
|
Botswana |
50% |
Ditau Camp |
Rare Earth Elements |
|
Canada |
30% |
Silver Peak |
Silver |
|
Canada |
100% |
Schreiber-Hemlo Projects |
Gold – Nickel |
|
The DRC |
70% |
Kisinka |
Copper – Cobalt |
|
Tanzania |
35% |
Haneti |
Nickel – Copper – PGMs – Gold – Lithium |
|
USA |
Earn-in up to 75% |
Alamo Gold |
Gold |
(1) Conditional agreement to acquire First Development Resources (Pty) Ltd.
(2) 50.8% reflects effective economic interest including 40% direct project interest and 10.8% indirect interest through shareholding in project holding company Kalahari Key Mineral Exploration Pty Ltd
Operational Highlights
In the Half Year to 31 March 2021:
Australia
· Further development of the Australian Gold Joint Venture focused on the Victoria Goldfields including notably the grant of the first three exploration licences announced in February 2021, a further two licences in March 2021 and the commencement of ground exploration across the granted licence ground.
· Option Agreement announced in January 2021 to acquire First Development Resources Pty Limited with interests in two copper-gold properties in the Paterson Province Eastern Pilbara, Western Australia. (Note this Agreement was subsequently superseded in April 2021 as outlined below).
Botswana
· Drilling commenced in October 2020 at the Molopo Farms Complex Project in Botswana with a 2,500m diamond drill programme targeting nickel sulphide and platinum group metal (“PGM”). By half year end 3 holes were complete with results sent for assay testing. Mineralogical studies confirmed the presence of nickel sulphides in drill core.
· Exploration work undertaken across the Botswana Joint Venture with Kavango Resources plc (LON:KAV) at the South Ghanzi (Kalahari Copper Belt), targeting copper-silver and the Ditau Project, targeting rare earth elements.
Canada
· A 500m diamond drill programme was launched in October 2020 at the Silver Peak Project in British Colombia, Canada, but access challenges and weather conditions led to a change in plans with a man-portable drill rig being used instead to undertake a shortened drill programme. Results announced December 2020 showed high grade silver and demonstrated mineralised vein continuity, with the full drilling programme planned to recommence in 2021.
· Acquisition of 7 exploration properties in the Schreiber-Hemlo region of Ontario.
The Democratic Republic of the Congo (The DRC)
· High grade copper and cobalt values announced November 2020 from assay testing on the 2020 pitting, mapping and sampling undertaken at the Kisinka Project in the DRC, which led to the commencement of ground geophysics in December 2020 to delineate targets for drilling.
Tanzania
· A rotary air blast drill programme commenced in December 2020 at the Haneti Nickel Project, held in joint venture with Katoro Gold plc (LON:KAT), to provide information leading into a subsequent planned diamond drill programme targeting nickel sulphide and Platinum Group Metals.
USA
· Exploration fieldwork undertaken at the Alamo Gold Project in Arizona USA, as announced in December 2020.
After 31 March 2021:
· The Rotary Air Blast drilling programme results from the Haneti Nickel PGM Project were announced in April 2021 and confirmed the move to deep diamond drilling;
· Assay results released in April 2021 from hole K1-6 at the Molopo Farms Complex Project in Botswana, confirming significant nickel intersections and later that month the Company confirmed the completion of its earn-in to a 40% direct project interest;
· Extensive exploration work continued at the Australian Gold Joint Venture in the Victoria Goldfields granted licences and a further update covering this was provided in April 2021, together with confirmation of a further two licence grants later that month;
· A conditional acquisition of First Development Resources Pty Limited was announced in April 2021, with a revised acquisition structure and now including 5 licence interests in the Paterson Province, East Pilbara, Western Australia;
· The Company announced the creation of a new resource project incubator subsidiary in May 2021, Power Capital Investments Limited;
· In May 2021, the Company announced the Kisinka Project in the DRC saw prominent magnetic highs identified from ground geophysics, and an intention to drill at Kisinka following completion of preparatory exploration work. In addition, confirmation was received that the project had been awarded a 25-year Production Licence;
· An Option agreement was announced in May 2021 allowing for the acquisition of a 100% interest in two exploration licences in the Tati Greenstone Belt, Botswana, targeting gold and nickel;
· In May 2021 positive findings were announced from the South Ghanzi Project in the Kalahari Copper Belt, Botswana, with extensive anomalies identified including 7 airborne electromagnetic targets for follow up geochemical sampling and drill testing; and
· As at 21 May 2021, Power Metal’s working capital comprising cash and listed investments amounted to circa £2.57 million, providing a robust underlying financial position for ongoing operations.
Financial Highlights for the Half Year Ended 31 March 2021:
· Loss for the period, attributable to owners of the parent of £0.59 million (2020: £0.24 million), resulting in a loss per share of 0.07 pence (2020: 0.05 pence);
· Warrant exercises during the period raised £2,692,474 for the Company; and
· Net assets of £4.6 million at the period end (30 September 2020: £2.4 million).
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 POW 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 discovery of precious or base metals.
The Company has a global portfolio of project interests including precious and base 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.
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 – Conditional Australia Copper-Gold Acquisition – Update
Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide an update regarding the Conditional Australia Copper – Gold Acquisition (the “Transaction”) announced on 28 April 2021 and which may be viewed in the following link:
The Transaction includes the acquisition of a 100% interest in First Development Resources Pty Limited, an Australian private company (“FDR Australia”), to include FDR Australia’s five exploration licence interests (four licence applications and one granted exploration licence).
The vendors include shareholders of FDR Australia and various third parties with interests in the exploration properties (the “Vendors”).
As part of the Transaction FDR Australia is to be acquired outright by a new UK private company (“FDR UK”), in which Power Metal is to hold a 75% initial interest and the Vendors a 25% initial interest.
The acquisition of FDR Australia will not be undertaken until the Ripon Hills Project has been successfully transferred into FDR Australia and a granted exploration licence has been received by FDR Australia in respect of the Wallal Project. Further announcements will be made by the Company as appropriate.
Transaction Progress
Power Metal and the Vendors are making good progress with the work to finalise the Transaction, including to secure the remaining four licence grants, prepare for accelerated ground exploration programmes and to pursue a planned listing of FDR UK.
Power Metal is working with the Vendors to identify the most expeditious route to complete the Transaction and to then implement the planned listing of FDR UK on the UK capital markets.
FDR UK has now been established with the formation of First Development Resources Ltd, a new UK company.
Confirmation has been received that given the size and nature of the Transaction approval is not required from the Foreign Investment Review Board, Australia, and may thus proceed without seeking formal approval.
Work is being undertaken to finalise Heritage Agreements in respect of the Wallal Project (E45/5816 – Licence Application) and, subject to a successful outcome, this is expected to be one of the final steps prior to receipt of a granted licence for the Wallal Project.
The Power Metal exploration team has been engaging with the Vendors and their advisors to undertake planning for exploration work across the Ripon Hills Project (E45/5088 – Granted Exploration Licence) and, subject to the grant of an exploration licence, the Wallal Project. This included liaising with the in-country geological and geophysical consulting firm Resource Potentials which conducted a detailed desktop study on behalf of the Company.
The results of this study saw the collection, analysis and interpretation of several geophysical datasets including airborne magnetics, ground gravity, 2D seismic, and airborne EM over the Property.
Following full analysis of these datasets and subject to licence grant, the Company in conjunction with Resource Potentials will plan and execute on a Phase I work programme which may include additional geophysical surveys as well as a deep drilling program targeting two coincident kilometre-scale magnetic, EM and gravity high bullseye anomalies located near the edge of the Wallal Platform.
CHIEF EXECUTIVE OFFICER STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“Good progress is being made with the FDR Australia acquisition work, in terms of general administration matters and also, importantly, in exploration planning. It is evident from our initial work that there are large exploration targets in the Transaction licence areas and we are keen to move ahead with ground exploration.
“The work also continues to pursue a potential listing for FDR UK following the planned acquisition of FDR Australia. There is a lot of activity underway and therefore I expect further updates to the market in due course.”
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 discovery of precious or base metals.
The Company has a global portfolio of project interests including precious and base 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.
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 – Conditional Australia Copper-Gold Acquisition
Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce an agreement has been reached for the acquisition of a 75% strategic interest in a UK special acquisition vehicle which is to acquire outright First Development Resources (Pty) Limited (“FDR Australia”), an Australian private company.
FDR Australia holds a portfolio of copper-gold focused exploration interests in the Paterson Province in the eastern Pilbara Region of Western Australia. The acquisition of FDR Australia will not be undertaken until the Ripon Hills Project has been successfully transferred into FDR Australia and a granted exploration licence has been received by FDR Australia in respect of the Wallal Project. Further announcements will be made by the Company as appropriate.
CHIEF EXECUTIVE OFFICER STATEMENT
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“The acquisition announced today provides Power Metal with a strategic interest in exploration properties in the Paterson Province, Western Australia. This region has seen considerable interest in recent years following the Havieron discovery by Greatland Gold plc and Winu discovery by Rio Tinto.
The level of interest in the region has intensified of late and the opportunity to secure a high-quality strategic licence footprint is diminishing. We needed to act to secure Power Metal’s seat at the “Paterson” table.
We now have a seat at that table, but this is Power Metal and our policy is to carve out innovative pathways for value generation with each new transaction.
Through this acquisition we are creating a new strategic Australian copper-gold exploration vehicle with a view to listing this special acquisition vehicle on the London capital markets at the earliest opportunity.
There is a clear opportunity in the Paterson Province, something we intend to pursue with considerable vigour and as you will see below, we are aligning Power Metal with an experienced Australian team to support the business in the run up to the listing of the special acquisition vehicle.
For myself, and Andrew Bell Chairman of Power Metal, this transaction is reminiscent of the financing and restructuring of Greatland Gold we coordinated in April 2016, which rejuvenated that vehicle and provided the backdrop to the dramatic delivery for shareholders we saw there. It does Power Metal no harm if we aspire to achieve another positive outcome with this new opportunity.”
BACKGROUND
This acquisition agreement (the “Agreement”) underlying this transaction was finalised on 27 April 2021 and was based in part on an option agreement (the “Option”) announced by the Company on 19 January 2021 and which may be viewed through the following link:
https://www.powermetalresources.com/n/n340/option-signed-australia-copper-gold-acquisition
After signing of the original option agreement which focused on two exploration projects being the Wallal Project and the Ripon Hills Project, three additional exploration properties became available for acquisition which would significantly enhance the overall exploration licence footprint.
Discussions with FDR Australia and associated project vendors ensued and due diligence work was undertaken on the wider exploration package. The discussions were extended to the consider the strategic opportunity to work together and potentially create a new London listed Australian exploration vehicle, focused on the Paterson Province, in Western Australia.
To secure the strategic footprint in one move it was necessary to pick apart the original option agreement and reconstruct the transaction.
The outcome of this is that Power Metal Resources will acquire an effective 75% interest in FDR Australia. This interest will be held through a 75% interest in a newly created UK private company, (“FDR UK”), which will ultimately hold 100% of the issued share capital of FDR Australia. The remainder 25% of FDR UK will be held by the vendors and associated parties, as outlined below.
FDR Australia’s business interests are outlined below and include five exploration projects including one granted exploration licence (the Ripon Hills Project) and four licence applications (the Wallal, Wallal West 1, Wallal West 2 and Braeside West Projects).
The intention is to list FDR UK on the UK capital markets, on the most expedited pathway possible.
THE PATERSON PROVINCE
The Paterson Province is considered highly prospective for gold-copper and base metal mineral systems and is currently of particular focus for resource companies with a significant level of exploration activity underway across the region.
This level of interest follows recent high-profile copper and gold discoveries by Rio Tinto at their Winu property1 and by Greatland Gold plc (LON:GGP) with the Havieron discovery2. Notably, several major groups in search of Tier 1 deposits have entered into joint-venture / farm-in agreements with junior explorers to expedite exploratory work.
The area also has developed mine and processing infrastructure due to the presence of established mining operations, including Newcrest Mining’s Telfer Mine3 and the X-Metals Nifty Copper Operation4 (planned as a mine restart).
FDR AUSTRALIA AND ITS BUSINESS INTERESTS
FDR Australia currently holds five project interests (the “FDR Australia Interests”) as follows:
The Wallal Project – E45/5816 – Licence Application
E45/5816, the Wallal Project is an exploration licence application held outright by FDR Australia and covering 390km2 in the western quadrant of the Paterson Province with a favourable lithospheric setting for substantial base metal deposits consistent with Rio Tinto’s (ASX: RIO) Winu discovery – predominantly copper-gold-silver with a JORC compliant Inferred Resource of 503Mt @ 0.45% Cu equivalent.
Ripon Hills Project – E45/5088 – Granted Exploration Licence
E45/5088, the Ripon Hills Project is a granted exploration licence covering 4 2km2 prospective for base metal-gold mineralisation and is proximal to Rumble Resources’ (ASX: RTR) Braeside Project where significant new base metal discoveries have been made 5 .
The Ripon Hills Project will be transferred at nil cost to FDR from current owner Great Sandy Pty Ltd (“Great Sandy”) a private Australian Company (the consideration for the transfer will be satisfied by Great Sandy nominees receiving a proportion of consideration outlined below.) (Note: The mineral rights for manganese and iron are excluded for the Ripon Hills Project.)
Wallal West 1 Project – E45/5853 – Licence Application
E45/5853, the Wallal West 1 Project, is an exploration licence application covering 96km2prospective for base metals and gold.
The ownership rights to the Wallal West 1 Project will be transferred at nil cost to FDR Australia from current owner Pardoo Resources Pty Ltd (“Pardoo”) a private Australian Company (the consideration for the transfer will be satisfied by Pardoo nominees receiving a proportion of consideration outlined below”.)
Wallal West 2 Project – E45/5880 – Licence Application
E45/5880 the Wallal West 2 Project, is an exploration licence application covering 86km2prospective for base metals and gold.
The ownership rights to the Wallal West 2 Project will be transferred at nil cost to FDR Australia from current owner Pardoo (the consideration for the transfer will be satisfied by Pardoo nominees receiving a proportion of consideration outlined below”.)
Braeside West Project – E45/5854 – Licence Application
E45/5854 the Braeside West Project, is an exploration licence application covering 137km2prospective for copper-lead-zinc and manganese mineralisation.
The ownership rights to the Braemore West Project will be transferred at nil cost to FDR Australia from current owner Pardoo (the consideration for the transfer will be satisfied by Pardoo nominees receiving a proportion of consideration outlined below”.) (Note: The mineral rights for manganese and iron are excluded for the Braeside West Project.)
FDR Australia Additional Disclosure
In the 6 months ended 31 December 2020 FDR Australia made an operating loss of A$18,914 (circa £10,707) and as at 31 December 2020 FDR had net liabilities of A$19,939 (circa £11,287).
EXPLORATION RATIONALE
The Company believe that securing a footprint in the prospective Paterson Province in Western Australia has the potential to deliver significant value for shareholders.
While the area has excellent mining infrastructure, there are many parts of the region – highly prospective for copper-gold mineralisation – which are under-explored. In turn, this significantly enhances the upside potential as much of the area is masked by surficial cover.
Using an array of modern exploration techniques, comprising reconciling geophysics and geochemical surveys, the exploration would seek to efficiently and cost effectively identify priority test-drill targets.
TRANSACTION TERMS – ACQUISITION OF FDR AUSTRALIA
Power Metal will, subject to local regulatory approvals and through a new special acquisition vehicle acquire an effective 75% interest in FDR Australia, an Australian private company holding five exploration projects.
The 75% interest will be held through a special acquisition vehicle, namely a new UK private company (FDR UK) which will acquire a 100% interest in FDR Australia and in which Power Metal will hold a 75% interest.
The intention is to list FDR UK on a recognised stock exchange in the London capital markets at the earliest opportunity.
The vendors of the FDR Australia interests include the shareholders of FDR Australia and various third parties with interests in the exploration properties included in this announcement (the “Vendors”). The Vendors will hold the remaining 25% interest in FDR UK.
In addition to the 25% holding in FDR UK the consideration payable to the Vendors and related transaction terms are as follows:
– Power Metal will pay initial consideration of A$50,000 in cash (circa £27,798) and £275,000 payable through issue to the Vendors of 10 million new Power Metal Ordinary Shares of 0.1p (“Ordinary Shares) at an issue price of 2.75 pence per share (“Initial Consideration Shares”) (note: A$20,000 (circa £11,322) will be used to eliminate shareholder loans in the accounts of FDR Australia and therefore on its acquisition by FDR UK, FDR Australia will carry no liabilities). The cash component of the consideration above will be funded from Power Metal existing cash resources.
– In addition, Power Metal will issue the Vendors 10 million warrants with an exercise price of 4.5p per new Ordinary Share and life to expiry of 3 years from the date of issue (“Initial Consideration Warrants”). Should the volume weighted average price (“VWAP”) of Power Metal shares meet or exceed 7.0 (seven) pence for a 5 consecutive trading days Power Metal may serve notice on the Vendors providing 10 trading days to exercise and pay for the Initial Consideration Warrants or the Initial Consideration Warrants will be cancelled.
– The acquisition of FDR Australia by FDR UK will not be undertaken until the Ripon Hills Project has been successfully transferred into FDR Australia and a granted licence has been received by FDR Australia in respect of the Wallal Project.
– The initial consideration items outlined above (cash, Initial Consideration Shares and Initial Consideration Warrants) will not be paid until FDR UK acquires 100% of FDR Australia and until the regulatory approvals have been received including any such approval required from the Foreign Investment Review Board (“FIRB”), Australia enabling that acquisition to proceed.
In addition, subject to the acquisition of FDR Australia by FDR UK:
– Excluding the Wallal Project, upon grant of each of the three additional exploration licence applications (Wallal West 1 & 2 and Braeside West) and ownership transfer to FDR Australia a further £80,000 consideration is payable through the issue of 2,500,000 new Ordinary Shares at an issue price of 3.2p each (“Grant Shares”). Should all three licence applications be granted the total consideration payable is £240,000 (being £80,000 per granted exploration licence application) through the issue of 7,500,000 new Ordinary Shares at an issue price of 3.2p each.
– Excluding the Wallal Project, upon grant of the each of the three additional exploration licence applications (Wallal West 1 & 2 and Braeside West) and ownership transfer to FDR Australia Power Metal will issue the Vendors 2,500,000 warrants with an exercise price of 5p per new Ordinary Share and life to expiry of 3 years from the date of issue (“Grant Warrants”) for each exploration licence application granted. Should the VWAP of Power Metal shares meet or exceed 10.0 (ten) pence for a 5 consecutive trading days Power Metal may serve notice on the Vendors providing 10 trading days to exercise and pay for the Grant Warrants or the Grant Warrants will be cancelled. Should all three licence applications be granted a total of 7,500,000 Grant Warrants will be issued.
– The Vendors will retain a 2% net smelter royalty (“NSR”) over all licences included in this transaction and FDR UK will have the right to purchase 1% of this NSR for A$1,000,000
– The Vendors and their professional licensing and geological teams will continue to work with Power Metal to manage local corporate operations, undertake initial ground exploration and potentially to further build the licence footprint in the Paterson Province.
– A suitable advisory team will be promptly established to manage the corporate activities required to seek a potential listing of FDR UK on the UK capital markets.
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: Rio Tinto PLC announcement https://www.riotinto.com/en/news/releases/2020/Rio-Tinto-reveals-maiden-Resource-at-Winu-and-new-discovery
Source 2: Greatland Gold PLC announcement https://polaris.brighterir.com/public/greatland_gold/news/rns/story/wkqm9ow
Source 3: Newcrest Mining Ltd : https://www.newcrest.com/our-assets/telfer
Source 4: Metals X Ltd: https://www.metalsx.com.au/copper/
Source 5 : Rumble Resources Ltd: http://rumbleresources.com.au/braeside_project.php
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 metals 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 subject to 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.