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(Alliance News) - Power Metal Resources PLC on Monday said lithium-focussed phase two follow-up fieldwork is now underway at the Selta project in Northern Territory, Australia, while it prepares its responsible subsidiary for listing.
The London-based exploration company with global operations said the fieldwork would further examine the zonation of a prospective pegmatite system present at Selta. Pegmatites are the target lithology which have the potential to host lithium mineralisation, it explained.
Desktop analysis identified approximately 700 potential outcropping pegmatites with a target area of around 180 square kilometres. Planned fieldwork will initially focus on a 30 square kilometre area in the southeast of the project.
Phase two fieldwork follows on from successful phase one field reconnaissance programme findings in June, which confirmed the presence of pegmatite geology over a small area in the south of Selta. This was from lithogeochemical analysis of 17 samples suggesting potential for a zoned pegmatite system originating from nearby granites.
The Selta project is held through its partially-owned subsidiary First Development Resources PLC, of which it has a 62% interest in. Plans are afoot for FDR to list in London, which is close to completion of all material work streams.
In light of positive progress across all of FDR's exploration programmes, FDR purchased the net smelter return royalties retained by the original vendors of its projects.
Two NSRs were originally announced on the acquisitions of First Development Resources Pty Ltd and URE Metals in October and November respectively, each being a 2% NSR with a 1% buyout right for AUD1.0 million. The NSRs were held by the original shareholders of FDR Australia and URE Metals, whose shares were acquired.
Each NSR was purchased for GBP150,000 payable through the issue of 1.8 million new FDR shares at 8 pence per share for a total GBP300,000. The 8p share price only relates to this NSR purchase transaction and should not be inferred as relating to any future FDR initial public offering price.
Shares in Power Metal were down 1.4% to 1.48p each in London on Monday afternoon.
"The search for economic deposits of lithium continues to be the focus of many exploration companies globally as they look to capitalise on the strong market conditions which continue to reflect the lack of supply for the ever-growing demand for battery metals including lithium. Importantly, with our readiness for diamond drilling at Wallal and the ongoing work programme at Selta, we are seeking to ensure FDR is a vibrant exploration business when listed," said Power Metal Chief Exceutive Officer Paul Johnson.
He continued: "The buyout of all project royalties by FDR was an important step, simplifying the structure of the planned listing interests and reflecting the value of FDR's project portfolio which has been significantly enhanced since their original acquisition."
FDR now holds a 100% interest in all projects and there are no NSRs over any of its properties. Following the issue of new FDR shares, Power Metals now holds around 59% of FDR's issued share capital.
By Greg Rosenvinge, Alliance News Reporter
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