Last checked at 30 Jun 2021 14:39
30 June 2021
Power Metal Resources plc
("Power Metal" or the "Company")
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
Project | Key Value Drivers |
AFRICA | |
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 |
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 |
Ditau Camp (Rare Earths) | - Release of exploration findings - Subject to exploration results, drilling of carbonatite and rare earth deposit targets |
Tati Project (Gold - Nickel) | - Results from due diligence exploration programme including infill geochemical surveys targeting newly identified significant gold and nickel anomalies |
Kisinka (Copper - Cobalt) | - Exploration drilling at Kisinka targeting a copper-cobalt discovery |
Haneti Project (Polymetallic) | - Exploration drilling at Haneti targeting a nickel sulphide discovery |
AUSTRALIA | |
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 |
Victoria Goldfields (Gold) | - Exploration programme initial results - Updates regarding IPO of core interests |
NORTH AMERICA | |
Hemlo-Schreiber (Gold - Nickel) | - Exploration updates |
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 |
Golconda Summit (Gold) | - Launch of ground exploration targeting near surface high grade gold mineralisation to validate historic work following receipt of permits |
Garfield/Stonewall (Gold - Copper - Silver) | - Launch of exploration programmes |
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
Project | Latest Position |
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. |
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.
|
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. |
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.
|
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. |
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.
|
Table 3 - Australian Projects Latest Position
Project | Latest Position |
Paterson Province Western Australia (Gold - Copper) POW: 75%
| 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. |
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
Project | Latest Position |
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. |
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. |
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. |
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.
|
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.
|
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:
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 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.