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(Sharecast News) - Power Metal Resources announced an agreement with GSA Environmental (GSAe), on Thursday, under which it would acquire 75% of GSAe's entire issued share capital under binding heads of terms.
The AIM-traded firm said GSAe, a UK-based engineering technology provider and process licensor, specialises in extracting strategic metals from secondary sources such as power station ash, refinery waste, and spent catalysts.
It said its focus on environmentally friendly residue production aligned with its goal of becoming a premier global provider of technological solutions to environmental challenges posed by toxic metals in waste products.
Under the agreement, Power Metal said it would initially pay £75,000 through the issue of new shares.
The maximum total consideration for the acquisition would be £1m, which could be settled in cash or new ordinary shares.
Power Metal said the final payment would be contingent on GSAe achieving certain performance milestones, including an annual profit of at least £1m by year three.
"I am very excited to announce this proposed strategic acquisition for Power Metal," said chief executive officer Sean Wade.
"We have ambitious plans for this innovative business and believe that the extraction of strategic metals from waste products fits well with our strategy of seeking exposure to the critical metals needed for the global energy transition.
"GSAe's proprietary technology has wide application, including in Saudi Arabia, with its plentiful supply of metal-rich power station ash."
Wade said the company believed the acquisition represented a "significant step forward" in the firm's efforts to become a major operator in the region.
"Moreover, the directors believe the acquisition will also create a substantial revenue opportunity for Power Metal shareholders, which if successful, will allow us to fund our activities with less recourse to dilutive equity financing."
At 1355 GMT, shares in Power Metal Resources were up 1.82% at 0.87p.
Reporting by Josh White for Sharecast.com.
