Last checked at 1 Oct 2021 13:57
1 October 2021
Power Metal Resources plc
("Power Metal" or the "Company")
Quarterly Business Operational Update
Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces the September quarterly business operational update for shareholders.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc, commented:
"We consider Power Metal to be a global project with thirteen project packages across three continents and targeting nine precious, base and strategic metals.
At the heart of our business is resource prospect generation, targeting district scale resource opportunities for internal development or value crystallisation.
Look below and you will see the results of our work to date and the potential the Power Metal business offers.
As a longstanding private investor and public company director in the junior resource space I often encounter the frustrations and the jubilations offered by a cyclical market.
Our duty, notwithstanding market conditions, is to remain focused, to continue to build and, above all, to justify shareholders' trust in Power Metal through quantifiable delivery."
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/
PROJECT OPERATIONS UPDATE
The tables below provide the latest status of each project within the Company's portfolio and include:
- Exploration project updates from African, North American and Australian interests;
- Corporate development updates for project packages advancing towards spin-out into their own listed vehicles as part of the Company's crystallisation objectives;
- Further updates in respect of Power Capital Investments Ltd, the Company's wholly-owned new project incubator;
- Additional management and financial information for shareholders.
African Exploration Projects
Project | Latest Position |
Molopo Farms Complex Project Botswana (Nickel - Platinum Group Elements (PGEs)) POW: Effective Economic Interest 50.8% | Work continues on technical analysis following the drill programme completed in early 2021. Significant nickel sulphides have been identified in the drill core with assays up to 1.7% nickel and 0.55g/t platinum. Further selected samples are to be assayed for additional nickel sulphide and PGE content. Discussions are in process with regard to corporate developments in respect of the Molopo Farms Complex interest together with next stage exploration including additional drilling. Key Potential Value Drivers: Confirmation of further nickel sulphide and platinum group elements (PGEs) from assay testing, outcome(s) from corporate discussions and launch of next stage exploration. |
South Ghanzi Project Botswana (Copper - Silver) POW: 50% |
South Ghanzi Project is held within Kanye Resources plc, a joint venture vehicle 50% held by Power Metal and 50% by partners Kavango Resources plc (LON:KAV) who are the operators of the project.
Drill target refinement continues at the South Ghanzi Project, together with initial exploration at the recently acquired South Ghanzi Extension Licences and the Mamuno Licences. Together, the ground footprint in the Kalahari Copper Belt (KCB) totals 4,257km2.
Approval of the Environmental Management Plan (EMP) for South Ghanzi is being sought to enable drilling to be undertaken.
Further consideration is being given by the joint venture partners with regard to the planned IPO of Kanye Resources plc and an update in this regard will be provided in due course.
Key Potential Value Drivers: Approval of the EMP, drilling of South Ghanzi targets and initial exploration findings from the recently acquired KCB licences.
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Ditau Camp Project Botswana (Rare Earths) POW: 50% | Ditau Camp Project is also held within the Kanye Resources plc joint venture as outlined above. To date three specific targets have been identified for drilling, which is expected to commence in Q4 2021. Further exploration work is continuing on the ground including ground based geophysical surveys. Key Potential Value Drivers: Drilling of Ditau targets and results from ongoing exploration. |
Tati Project Botswana (Gold - Nickel) POW: 100% |
The company recently completed its Phase I and Phase II work programmes, which included high-resolution soil sampling (1,107 samples collected), mapping and prospecting (49 rock samples collected), as well as ground-based geophysics including high-resolution magnetic and radiometric surveys.
The results have highlighted five target areas across the two licences, which are defined by kilometre-scale geochemical anomalies that are coincident with various geological structures that were highlighted by the ground geophysical surveys.
The company is now in the preparatory stage for an inaugural drilling campaign, which will include roughly 1000m of reverse circulation (RC) drilling across the various target areas.
Drilling is expected to commence during the first week of October subject to final preparations.
Key Potential Value Drivers: Results of ongoing exploration including drill results.
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Kisinka Project The DRC (Copper - Cobalt) POW: 70% | Next stage exploration is drill testing of the 6.8km copper-cobalt geochemical anomaly identified from previous exploration programmes. Preparations are continuing for drilling including target refinement and sourcing of appropriate contractors. Drilling is expected to commence in Q4 2021. Key Potential Value Drivers: Drill testing of copper-cobalt targets. |
Haneti Project Tanzania (Polymetallic) POW: 35% |
The next stage of exploration is deep diamond drill testing at Haneti targeting nickel sulphide - PGE mineralisation.
Final preparations are underway for this drill programme which is targeted to commence in Q4 2021.
Key Potential Value Drivers: Drill testing of nickel sulphide - PGE targets. |
North American Exploration Projects
Project | Latest Position |
Silver Peak Project British Columbia, Canada (Silver) POW: 30% | Assay results are currently pending from the recently completed summer drill programme. Work continues on a potential IPO of the Silver Peak project as well as the consideration of a number of alternative commercialisation opportunities. Key Potential Value Drivers: Pending assay results and confirmation of selected commercialisation approach. |
Alamo Project Arizona, USA (Gold) POW: Earn-in to 75% |
The Notice Level Plan of Operations permit which was required to commence the next phase of exploration has been received. In line with recently introduced provisions an additional cultural and biological assessment is being undertaken which we expect to be completed by the end of October and thereafter work will commence.
The work programme is expected to include trenching on one area of the Alamo Project, with associated sampling, assaying and mapping and thereafter potential drilling of a number of short percussion holes to test for gold and silver mineralisation.
Key Potential Value Drivers: Launch of next stage exploration and associated results.
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Athabasca Uranium Satskatchewan, Canada (Uranium) POW 100% |
241km2 of ground has been staked surrounding the Athabasca Basin in Saskatchewan, Canada.
In total 7 property packages have been assembled, all of which are prospective for uranium mineralisation.
Work is being undertaken to assemble detailed project information and to determine next steps for the newly acquired properties.
Key Potential Value Drivers: Publication of full property information, uranium prospectivity analysis and launch of Phase I work programme.
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Authier North Quebec, Canada (Lithium) POW earn in to 100% |
A programme of detailed soil sampling, prospecting and rock sampling has recently completed.
The programme was designed to test for the extensions of a lithium-bearing pegmatite dyke down dip to the north, and along strike to the east from the adjacent Authier Lithium Property.
The Authier Lithium Property is owned by Sayona Mining Limited and is scheduled to go into production in 2023. The results from the recently completed programme will be released to the market once received, compiled and interpreted by Power Metal personnel.
Key Potential Value Drivers: Results from the exploration programme now completed.
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Disposal/Spin-Out Vehicle Packages*
* Please note other project packages within the Power Metal portfolio are also in earlier stages of spin-out preparations in addition to those listed below.
Project | Latest Position |
New Ballarat Gold Corporation Victoria, Australia (Gold) POW: 49.9% | Power Metal has an interest in 49.9% of New Ballarat Gold Corporation plc ("NBGC") held in joint venture with 50.1% held by Red Rock Resources plc (LON:RRR). Through its Australian operating subsidiary, Red Rock Australiasia Pty Ltd, NBGC has a strategic land footprint in the Victoria Goldfields, Australia. The footprint comprises 1,458m2 of ground under 9 licence applications and 7 granted licences covering 848km2. Extensive exploration is continuing, combining desk-based research with field exploration. Drill targets have been identified following additional discoveries of historic mine workings within the granted licence area. A diamond drill programme has been scheduled for the end of the year. The joint venture partners are working together to expedite a listing of NBGC on the London capital markets. The new board of NBGC has been selected in readiness for listing and NBGC has appointed all key advisors in this regard. Key Value Drivers: Material findings from ongoing exploration, further licence grants and the listing of NBGC on the London capital markets. |
Golden Metal Resources Nevada, USA Gold - Base Metals POW - Various interests (see right column) POW 100% | During Q2/Q3 2021 Power Metal assembled a strategic package of exploration and development interests in Nevada USA under the corporate vehicle Golden Metal Resources Ltd ("Golden Metal"). Golden Metal's project portfolio includes: - Golconda Summit - an exploration property targeting high grade near surface gold, where Power Metal has a right to earn-in to a 100% interest.
Permit has now been received allowing a trenching, sampling and mapping work programme to be undertaken. Final preparations are in hand and exploration is expected to commence at Golconda Summit in October.
- Garfield/Stonewall - two 100% owned exploration properties targeting gold-silver mineralisation.
Initial exploration now launched includes the processing of various Aster and Worldview-3 hyperspectal satellite imagery datasets over the Garfield Property, which will allow for the remote mapping of various iron and hydrothermal alteration minerals.
- Pilot Mountain - an option to acquire a 100% interest in an advanced exploration and development property with a substantial JORC compliant tungsten, copper, silver and zinc resource.
Due diligence is fully underway to enable option exercise to proceed by the date of option expiry on 29/10/2021. Golden Metal is seeking a listing on the London capital markets and is currently assembling its advisory team to complete the listing documentation. Key Value Drivers: Positive findings from exploration work at Golconda Summit and Garfield properties and the listing of Golden Metal on the London capital markets. |
First Development Resources Western Australia (Gold - Copper) POW: Conditional Acquisition 75%
| Power Metal is to acquire a 75% interest in First Development Resources Pty Ltd (FDR Australia), an Australian company holding five exploration interests in the Paterson Region of Western Australia. Initially the licences included one granted exploration licence and four licence applications. Power Metal has received confirmation that two additional exploration licence applications have now been granted (Wallal Main E45/5816 and Wallal West 2 E45/5880), two of the three strategic Wallal Project licences, with the remaining licence (Wallal West 1 E45/5853) expected to be granted imminently. The Wallal Project is the focus of ongoing exploration work including 2D seismic geophysics reprocessing and a passive seismic survey which is intended to help refine drill targeting within the Wallal Main Licence area. Drill targets comprise magnetic bullseye targets of similar geological nature to that drill tested by Greatland Gold plc leading to the discovery of the Havieron deposit in the Paterson Province. The acquisition which is now proceeding will trigger the acquisition of FDR Australia by First Development Resources Limited, which Power Metal plans to list on the London capital markets. Key Potential Value Drivers: Licence grants, formal acquisition of FDR Australia, listing in London and deep drill testing of magnetic bullseye targets. |
First Class Metals Schreiber-Hemlo, Ontario, Canada (Gold - Base Metals) POW c.38%
| Power Metal announced the disposal of its Schreiber-Hemlo interests to First Class Metals ("First Class") on 07/09/2021 for consideration of £1mn. With the shares received on the disposal, and following a subscription by Power Metal of £28,764 at £3/share in the pre-IPO raise, Power Metal currently has an interest of c.38% in First Class (after reflecting the c.£400,000 pre-IPO raise undertaken by First Class). First Class is seeking a listing on the London capital markets and provided an update to shareholders on 27/09/2021 confirming considerable progress from both from exploration and corporate perspectives. Power Metal is working with First Class to support their listing plans and looks forward to reporting further progress in this regard. On listing Power Metal will be a significant shareholder in First Class. Key Potential Value Drivers: Exploration updates from the Schreiber-Hemlo interests and listing of First Class on the London capital markets. |
New Opportunities
Project | Latest Position |
Power Capital Investments Limited Global Resource Project Incubator (Multi-Commodity) POW: 100%
| Power Capital Investments (Power Capital) is currently in the early stages of three potential new projects namely: - Gold exploration in Europe where Power Capital has a signed agreement with a third party. To date assay testing of samples has been undertaken demonstrating high-grade gold mineralisation in hand samples. Currently Power Capital is funding the third party to lodge licence applications covering the area of interest. Thereafter the plan is to launch additional exploration programmes. Power Capital may earn-in to a 50% interest by expending €100,000 on exploration and corporate costs.
- Consideration of an African rare earths initiative with a specialist geological team employing new technology to identify rare earth deposits in Africa. Limited information will be provided in respect of the above Power Capital projects to preserve commercial sensitivity, notably where work is needed to secure exploration licences or to protect commercial partners. At present none of the Power Capital projects above are considered material in the context of the Power Metal business overall. Should they become so, further disclosures may be necessary. NOTE: A maximum investment level of £100,000 per opportunity has been established and a minimum 50% Power Capital holding interest in any opportunity following Power Capital's investment. Key Potential Value Drivers: Advancement of any Power Capital investment into full Power Metal project status or spin-out IPO opportunity. |
Management and Financial
Project | Latest Position |
Board
| Further to the announcement of 21 September 2021, Andrew Bell, Chairman of Power Metal stepped down from the board yesterday to focus on the large spin-out IPO of NBGC (see above). Current Non-executive director Scott Richardson Brown is to become Interim Chairman pending the appointment of a new Chairman in due course. |
Senior Management
| The Company operates a hub and spoke operational management style coordinating and controlling global exploration operations from its UK Head Office. In 2021 with the growth of our business portfolio, and the success of exploration and commercial ventures, we have built the Head Office team with exploration management, commercial management and financial and administrative support. We are also seeking to optimise resources, and our Head Office team will be deployed to support spin-out vehicles, managerially and administratively, helping to reduce the operational costs to Power Metal of new team members. |
Financial Position
| Power Metal has a growing balance sheet which, as with many other exploration companies, has a core of capitalised exploration costs for ongoing exploration projects. Power Metal can monetise its operational interests as demonstrated by the disposal of the Schreiber-Hemlo business interests (see above). And importantly, Power Metal is planning to spin-out other business interests into listed vehicles, and any new listings will add materially to the Company's balance sheet. Excluding all of the above the Company also holds working capital, comprising cash and currently listed (tradable) investments, which funds day to day operations. As at 24/09/2021 this amounted to working capital of £2.51million. |
Audit and Compliance
| As the financial year comes to a close Power Metal is working with One Advisory, its financial and compliance service partner, to prepare for the annual audit, with financial results for the year ended 30 September 2021 expected to be published in February 2022. As a responsible exploration company Power Metal is further bolstering its Environmental, Social and Governance initiatives and will be publishing further information in the coming months covering the various measures implemented. In 2020 the Company undertook a Finance, Administration and Compliance Protocols and Procedures Review to further improve its underlying Governance and is now further bolstering this with detailed business process mapping across the Company. These measures are considered necessary as the Company expands in size, scale and breadth of corporate and exploration activities. |
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 |
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Paul Johnson (Chief Executive Officer) | +44 (0) 7766 465 617 |
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SP Angel Corporate Finance (Nomad and Joint Broker) |
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Ewan Leggat/Charlie Bouverat | +44 (0) 20 3470 0470 |
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SI Capital Limited (Joint Broker) |
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Nick Emerson | +44 (0) 1483 413 500 |
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First Equity Limited (Joint Broker) |
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David Cockbill/Jason Robertson | +44 (0) 20 7330 1883 |
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Notes to Editors:
Power Metal Resources plc (LON:POW) is an AIM listed metals exploration company which finances and manages global resource projects and is seeking large scale metal discoveries.
The Company has a principal focus on opportunities offering district scale potential across a global portfolio including precious, base and strategic 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.
Power Metal will develop projects internally or through strategic joint ventures until a project becomes ready for disposal through outright sale or separate listing on a recognised stock exchange thereby crystallising the value generated from our internal exploration and development work.
Value generated through disposals will be deployed internally to drive the Company's growth or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.