(Alliance News) - Power Metal Resources PLC on Thursday said it has signed an agreement to acquire a 100% interest in a package of three gold exploration projects located in the prospective Hemlo North area of Ontario, Canada.
The AIM-listed metals exploration & development company says the project includes three contiguous exploration projects Roger Lake, Olga Lake and Dotted East, which together cover an area of 26 square kilometres centred 29 kilometres north-east of Barrick Gold Corp's Hemlo mine, which has produced more than 21 million ounces of gold to date.
"The acquisition comes at a highly competitive time when this part of Canada is attracting a significant amount of investment from Canadian listed junior explorers," said Power Metal Chief Executive Paul Johnson.
"The project has the potential for both gold and base metal discoveries in an under explored area which offers Power Metal, as a proactive exploration company, the potential to add significant value through early stage exploration success," added Johnson.
The cost of acquisition of the project is CAD120,000 - about GBP69,130 - of which CAD60,000 will be paid in cash and CAD60,000 through the issue of 1.2 million new shares at an issue price of 3.0 pence per share.
Power Metal said the vendors will retain a 2% net smelter royalty in respect of the exploration assets. Power Metal also said it may purchase 1% in total of this net smelter royalty at any time by making a cash payment of CAD500,000 to the vendors.
Power Metal shares closed 3.5% lower in London on Thursday at 2.80 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Power Metal (POW)