Last checked at (Sharecast News) - Metals exploration and development company Power Metal Resources (POW) updated the market on developments at the Alamo project in Arizona on Tuesday, reporting that initial due diligence had now been completed, including a site visit by the POW chairman, chief executive officer and its competent person.
The AIM-traded firm said the project showed evidence of possible epithermal mineralisation, which it added was possibly related to a deep-seated porphyry intrusion.
Evidence of intrusive dykes and structural conduits supported the project's prospectivity.
It said the presence of gold nuggets within the project area was confirmed during the POW visit, and that under POW oversight, an approximate three square metre test pit, up to 30 centimetres deep, was excavated in an area of undisturbed vegetated ground coinciding with the perceived trend of intrusive dykes.
Using a metal detector supplied by a local prospector, three small gold nuggets were recovered from the material excavated.
That sampling was demonstrative of the presence of coarse, near-surface gold, the board claimed, while the topographical surface morphology supported a likely proximal hard-rock source for the gold.
The findings also provided some support to reports that around 60 ounces of gold nuggets had been recovered within the project area, with the largest nugget reportedly weighing around five ounces.
Findings of the POW visit also indicated that the package of claims should be extended to include a "sufficient buffer" around the prospective area.
The vendors had waived the previous extension fees, comprising the issue of a further 2,911,387 new ordinary shares to the vendors at a price of 0.4p each, totalling £11,646, for an additional 30 days added to the due diligence period.
POW has agreed to spend a minimum of $20,000 to complete additional exploration work and secure additional ground, in exchange for an extension to the due diligence period to 20 April.
Additional exploration work was likely to include the acquisition and assessment of satellite remote sensing datasets, to obtain additional information on structure and alteration mapping.
"We are pleased with the progress made regarding our assessment of the Alamo Project," said chief executive officer Paul Johnson.
"The identification of a potential porphyry engine for the phenomena seen at surface is of particular interest.
"In addition, we are encouraged by the confirmation of near-surface gold nuggets, through a very limited metal detecting exercise and the potential for a proximal bedrock gold source within the project area."
Johnson said the company now needed to ensure that the claims package was complete, and covered the prospective ground with a "sufficient buffer", and would undertake some additional work to ratify its assumptions to date.
"We will discuss in greater detail the terms of a potential transaction upon conclusion of our due diligence."
At 1311 GMT, shares in Power Metal Resources were down 10.69% at 0.31p.
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