Last checked at 27 Jul 2022 09:45
27 July 2022
Power Metal Resources plc
("Power Metal" or the "Company")
Quarterly Business Update
Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces the quarterly business update for shareholders.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc, commented:
"First Class Metals, into which we sold our Schreiber-Hemlo interests is nearing its planned listing; we recently conditionally disposed of our stake in the Botswana Kanye JV to our partner Kavango Resources; and we have Golden Metal Resources (Nevada, USA focused) nearing completion of its IPO preparations, with First Development Resources' planned listing process (Australia focused) well underway. We expect more crystallisation events to occur from our still extensive portfolio.
Crystallisation of value into strategic investments bolsters our balance sheet considerably and offers the potential for considerable capital gains, alongside providing a major pool of available working capital to the Company. However, what enthuses us even more is the future direction of the Company and the exploration potential offered from within our retained portfolio.
We would reinforce our commitment to growing a uranium focus in the Company, with the energy metal slated for a continuing resurgence as the world continues in its journey towards significantly increased reliance on nuclear power generation. Going forward, we will also focus our energy and resources on the more rapid advancement of certain retained exploration projects, including notably our two remaining Botswana interests in the Molopo Farms Complex and Tati Greenstone Belt projects."
GUIDANCE FOR READERS
The tables below include the latest position of each project and our operational plans over the course of the next three months.
Projects are grouped into the following categories to provide additional clarity to investors on the project status and near term plans:
- Priority exploration projects
- Project disposals or IPO processes underway
- Projects with next steps to be determined pending receipt of further information
Below the project tables, additional information is provided covering new opportunities, business management, finance and compliance.
Readers are also encouraged to review Power Metal's corporate website and presentation which are regularly updated and are available through the following links:
Website: www.powermetalresources.com
Corporate Presentation: https://www.powermetalresources.com/presentation/
PRIORITY EXPLORATION PROJECTS
Project | Latest Position & Forward Plans |
Athabasca Uranium Saskatchewan, Canada (Uranium) POW 100% |
Power Metal currently holds 7 properties with 3 newly acquired properties to be transferred to it, as announced 26 July 2022 and which together cover 721km2 surrounding the Athabasca Basin.
Detailed data compilation has been completed and external datarooms opened for third parties in respect of 7 properties. We have completed hyperspectral data analysis over 4 properties with the findings leading to the planned launch of ground exploration at those properties shortly.
In addition to exploration of retained uranium projects, the Company is working on corporate options in relation to certain of its Athabasca uranium interests.
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Authier North Quebec, Canada (Lithium) POW earn-in to 100% |
The Company continues to monitor progress being made by Sayona Mining (ASX: SYA) who control the neighbouring Authier Lithium Project.
On 12 July 2022 Power Metal announced the decision to proceed into year 2 of the earn-in to a 100% interest in Authier North.
Ground exploration plans are being finalised with work expected to commence this quarter.
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Molopo Farms Complex Project Botswana (Nickel - Copper - Platinum Group Element) POW: Effective Economic Interest is currently 52.6% increasing to 87.71% subject to completion of the KKME shares acquisition & restructuring announced 18.5.22.
| Power Metal secured a conditional agreement to acquire an additional 58.7% of shares in project partner Kalahari Key Mineral Exploration Pty Limited ("KKME") as announced on 18 July 2022: https://www.londonstockexchange.com/news-article/POW/kalahari-key-botswana-acquisition/15458701 This acquisition, conditional on regulatory approval, will see Power Metal holding 87.71% of KKME which will hold 100% of the Molopo Farms Complex Project ("Molopo Farms"). The next step is diamond drilling to follow up on the discovery of nickel sulphides in the first drill campaign and seeking an economic and large-scale discovery. Planning is underway now for this next drill programme which, subject to completion of the agreement to acquire an additional 58.7% of shares in KKME, we expect to commence in the autumn. Simultaneously, we have prepared and opened a Molopo Farms dataroom providing all project information for interested third parties to review. All such engagements will be under non-disclosure arrangements at this time. |
Tati Project Botswana (Gold - Nickel) POW: 100% |
The Company announced the results from a maiden drill programme at the Tati Project on 4 April 2022 and this may be viewed through the following link:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-drill-programme-results/15396365
Drilling confirmed 3 metres of 5.17g/t gold from 9 metres downhole, representing shallow gold mineralisation. Analysis led to additional gold prospective ground being covered by a new prospecting licence ("PL") application, which was granted in April 2022 as announced to the market:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-new-licence-granted/15422038
Recently the Company's technical team visited the new PL to conduct site inspections and mapping, confirming extensive historical gold workings at the Cherished Hope gold mine as well as large fines dumps which may be capable of near-term revenue generation through toll processing of gold:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-exploration-update/15543783
As a result of the findings from the site visit undertaken, we have expedited plans including further volumentric analysis and gold sampling of fines dumps and a reverse circulation ("RC") drill programme is expected to commence in September/October of this year.
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PROJECT DISPOSALS OR IPO PROCESSES UNDERWAY
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 |
Kanye Resources Conditional Disposal to Kavango Resources | On 8 July 2022 Power Metal announced the conditional disposal of its Kanye Resources interest to its joint-venture partner Kavango Resources plc (LON:KAV)("Kavango"). The disposal is subject to the publication of a prospectus by Kavango including provision for the transaction. Full terms and disposal consideration payable to Power Metal may be viewed in the announcement linked below: https://www.londonstockexchange.com/news-article/POW/conditional-disposal-of-kanye-resources-interests/15532470 |
First Class Metals PLC (FCM) Schreiber-Hemlo, Ontario, Canada (Gold - Base Metals) POW c.36%
| Power Metal currently has an interest of 36.3% in FCM following the FCM pre-IPO financing which raised £486,000 in 2021. FCM is seeking a listing on the London capital markets which is expected to occur shortly. First Class Metals has 100% ownership of 7 claim blocks covering over 180km² in the Hemlo - Schreiber greenstone belt of Ontario, Canada. The North Hemlo flagship property covers over 90km2 and sits just north of Barrick Gold Corp's Hemlo gold mine. The North Hemlo property has abundant showings of gold/copper/zinc/nickel. In the east of the North Hemlo property sits the Pickle Lake joint venture with Palladium One (TSX:PDM) which is the subject of a current drill programme focussing on nickel/copper targets. |
Golden Metal Resources PLC (GMR) Nevada, USA Gold - Base Metals POW 83.13%
| Power Metal provided a Golden Metal Resources ("Golden Metal") company update on 19 July 2022 which may be viewed below: https://www.londonstockexchange.com/news-article/POW/golden-metal-resources-company-update/15547371 Following the pre-IPO financing which raised £750,000 in late 2021 preparation for the planned listing of Golden Metal is near to completion and this will lead into the IPO financing, and subject to regulatory approvals, a planned listing on the London capital markets expected to occur this quarter. Golden Metal is active from an exploration perspective with an induced polarisation ("IP") survey underway over the Pilot Mountain project and a high-resolution soil geochemical survey active across the Garfield project. |
First Development Resources Ltd (FDR) Western Australia (Gold - Copper - Rare Earth Elements - Uranium - Lithium) POW: 62.12%
| FDR has undertaken multiple exploration and corporate work streams in recent months. A detailed company update will be released to the market shortly providing an update which will cover: - Final preparations for the Wallal project diamond drill programme - Exploration findings from the Braeside West, Ripon Hills and Selta projects - Update with regard to the planned listing process now fully underway following the completion of a £1.125m pre-IPO financing as announced in June 2022.
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New Ballarat Gold Corporation PLC (NBCG) Victoria, Australia (Gold) POW: 49.9% 50.1% JV Partner Red Rock Resources PLC LON:RRR)
| Through its Australian operating subsidiary, Red Rock Australasia Pty Ltd, NBGC has a substantial licence footprint within the Victoria Goldfields, Australia. This comprises 14 granted exploration licences covering 1,832km2 and 5 licence applications covering 493km2. A planned listing of NBGC has taken longer than anticipated but remains the focus of the company with a potential planned listing in the London or Australian capital markets later this year. Much work has been undertaken recently to advance the licences held in NBGC including continuing exploration work by our in-country operational team. Also through the advancement of licence applications into granted status, which has now been achieved for 79% of the application footprint. Recent licence grants include EL007330 located northeast of Ballarat and this newly granted licence covers the Ajax gold mine which historically produced 312,789oz gold at an average grade of 14.8g/t Au in the 1920s ("Ajax"). Further information in our announcement of 24 May 2022: https://www.londonstockexchange.com/news-article/POW/victorian-gold-fields-grant-of-key-licences/15465313 The addition of the Ajax gold mine above was further supplemented by a transaction to acquire EL5535 which covers the historical Berringa gold mine just west of Ballarat which has historical production of 293,250 ounces of gold from 1898-1952, at an average grade of 8.3g/t ("Berringa"). Further information in our announcement of 6 July 2022: https://www.londonstockexchange.com/news-article/POW/acquisition-of-historic-berringa-gold-mine/15528927 The mined sections of the Ajax and Berringa trends are thought by RRAL to be among the top half dozen historic underground gold mines of Victoria and contain significant exploration targets. Both mine areas are within 30km of existing and not fully utilised treatment plants. Work is currently being undertaken to better understand historical mining activities, residual gold resource potential and drill targets at both Ajax and Berringa, with a view to diamond drilling later this year. This work is being undertaken alongside various work streams in respect of the planned listing. |
PROJECTS WITH NEXT STEPS TO BE DETERMINED
Project | Latest Position & Key Forward Events |
Alamo Gold Project Arizona, USA (Gold) POW: Earn-in to 75% |
Various technical reports have now been received and reviewed following work undertaken at the Alamo gold project in Arizona.
The findings are inconclusive to date and require additional work to be undertaken to further the technical understanding of the project's potential.
We are working with our partners in Arizona to review the technical work required and the costs attaching. We are also looking at the earn-in which may need to be restructured given the findings thus far.
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Gawler Project South Australia (Gold, Copper) POW: 100% | The Gawler Project comprises two licence applications (submitted October 2021 and covering 1,994km2) details of which may be viewed through the following link: https://www.londonstockexchange.com/news-article/POW/new-australia-copper-gold-opportunity/15189456
Recently Power Metal Resources Australia Pty Limited, Power Metal's wholly owned operating company, was advised that the Department of Energy and Mining ("DEM") proposed granting of one licence application ELA2021/00163 (999km2) for a period of 6 years. The initial expenditure commitment for the licence is AUD$100,000 in total over 2 years, and Power Metal has paid AUD$23,055.10 in respect of first year rent and administration fees to the DEM. The Company now awaits final regulatory sign-off and release of granted licence documentation.
Internal technical review by the Power Metal team has been undertaken and an initial exploration programme is being finalised in preparation for the launch of ground exploration following receipt of the granted licence documentation.
Power Metal awaits progress with regard to the granting of ELA2021/00162 (995km2) and will similarly launch planned ground exploration subject to the granting of the licence.
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Haneti Project Tanzania (Polymetallic) POW: 35% (65% JV Partner Katoro Gold plc LON:KAT) |
Drill results were announced for the Haneti Project in May 2022. Drilling identified the targeted nickel, but not in economically significant intersections. The technical results from the programme are expected to lead to further target development at Haneti for ongoing exploration.
In addition data from the programme is now being made available to third parties previously interested in the Haneti project, to augment information previously supplied up to Q1 2020.
Power Metal is keen to progress the Haneti project through further targeted exploration and/or corporate activity.
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Silver Peak Project British Columbia, Canada (Silver) POW: 30% | Liaison with our Canadian partner to finalise commercial initiatives for the project continue. An important next step is a planned site visit which is scheduled for early August 2022, which is expected to assist expediting matters. |
NEW OPPORTUNITIES
Project | Latest Position |
Power Metal Resources plc | The near-term focus will remain on the exploration of existing interests and the crystallisation of value through the potential listing of spin-out vehicles and project value generative disposals. The primary acquisition focus for the foreseeable future is uranium projects, however the Company does not rule out other acquisitions of exceptional opportunities. |
Power Capital Investments Limited Global Resource Project Incubator (Multi-Commodity) POW: 100%
| Power Capital Investments ("Power Capital") continues to work on a number of initiatives targeting individual or smaller corporate owned opportunities. This is occurring against a backdrop of intensive activity across the Power Metal business and will for now remain a modest source of activity as we seek to advance our major business interests. |
MANAGEMENT - FINANCIAL - COMPLIANCE
Project | Latest Position | ||||||||||
Board
| The Board currently comprises: Scott Richardson Brown - Interim Non-executive Chairman Paul Johnson - Chief Executive Officer Ed Shaw - Non-executive Director Power Metal has been engaging with a number of potential board candidates for Power Metal and associated companies. We have successfully secured full boards for Golden Metal and First Development Resources in advance of their planned listings. For Power Metal we are undertaking due diligence on new candidates and hope to be in a position to announce new appointments in the near term. | ||||||||||
Management and Team
| Power Metal has built a strong operational team which along with the board now comprises ten team members based out of our UK office. We work extensively overseas and have developed equally strong operational partnerships in countries around the world, forming an efficient and cost effective hub-and-spoke operational model. Power Metal is actively seeking to bring new team members in to support the growth in business and we continue to invite talented individuals from all backgrounds who feel they can contribute to our work to reach out and contact us through the following link: https://www.powermetalresources.com/join-us/ | ||||||||||
Financial Position
| Working Capital Working capital comprises cash and listed investments ("Working Capital"). As at 26/07/22 Working Capital amounted to £1.88m. This is available for payment of corporate costs and exploration expenditure across business operations. Pre-IPO Vehicles Power Metal has holdings in three current vehicles undertaking a planned IPO which, valued at the historical pre-IPO valuation level, amount to a total value of £6.92m as per the table below:
In addition, Power Metal is seeking with JV partners (Red Rock Resources PLC) to undertake a listing of NBGC, the pre-IPO valuation of which is not confirmed at the current time. The listing of further project packages may be undertaken which will be incorporated into the above list in due course. Project Investments & Intercompany Loans As at 30/06/2022 Power Metal's remaining assets comprising project investments and intercompany loans, amounting to £5.08m. Future Financing Sources The Company has multiple sources of additional financing, not all of which may be necessary or occur in the foreseeable future: - As an AIM listed vehicle traditional equity financing can be undertaken to raise additional sums where considered necessary.
- Through the exercise of financing and transactional warrants or the exercise of director, team member or adviser options. A full breakdown of all warrants and options outstanding is available on the Company's website through the following link:
https://www.powermetalresources.com/warrants-options-outstanding/
- In addition to the above, the Company will benefit from the planned listings of the pre-IPO vehicles as outlined above which will, if successful and in line with expected valuations on listing, add considerably to overall Power Metal asset value.
- It is anticipated that further value generative events may occur including additional spin-outs into new listed vehicles and outright disposal of certain business interests. | ||||||||||
Audit and Compliance
| Power Metal with the support of One Advisory, completed its interim results for the half year ended 31 March 2022, which in line with best practice were reviewed for comment by the Company's auditors PKF. The interim results were published on 27 June 2022. The Company's year end is 30 September 2022 and it is expected that the audited financial accounts for the full year will be published in February 2023. Power Metal is now well advanced with preparation of a new environmental, social and governance ("ESG") initiative which will include: - Appointment of an ESG Officer for Power Metal and all associated companies. - Design, implementation of new and wide ranging ESG policies across the Company and embedded at local project or investment level for all Company activities. Training of all staff members to develop Company-wide core ESG understanding, with in-depth training where required to maintain optimal ESG capability at all levels. A separate ESG dedicated announcement will be published by the Company in due course. |
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 - Background
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.
Exploration Work Overview
Power Metal has internal exploration programmes completed or underway, with results awaited, as outlined in the table below.
Exploration work programmes may also be underway within planned IPO vehicles where Power Metal has a material interest the findings from which will be released on their respective websites, with simultaneous updates through Power Metal regulatory announcements where required:
www.firstclassmetalsplc.com
www.goldenmetalresources.com
www.firstdevelopmentresources.com
Power Metal also holds a material investment in Kavango Resources plc with exploration updates available through their regulatory announcements and on their website:
www.kavangoresources.com
Project | Location | Current POW % | Work Completed or Underway | Results Awaited |
Athabasca Uranium | Canada | 100% | Hyperspectral data analysis conducted across all 7 properties. Updating to 7 data rooms for third party review. | Finalise review of data from 3 properties. Prepare for summer exploration programme across 4 properties. |
Authier North Lithium | Canada | Earn-in to 100% | Property Evaluation Report completed. | Update covering exploration plans for target areas identified during the Evaluation. |
Molopo Farms | Botswana | 53%# | Comprehensive data review complete and establishment of data room for third party review. | Finalise next exploration steps and action plan. |
Tati Project | Botswana | 100% | Site visit with mapping of gold workings and mine dumps. | Exploration planning underway including further mapping, sampling and launch of an RC drill programme. |
Victoria Goldfields | Australia | 49.9% | Diamond drill programme completed. Review of Ajax & Berringa mine remaining resource potential.
| Final drill programme results analysis and resource potential analysis from former high-grade producing mines in granted licences. |
# subject to completion of acquisition announced 18.5.22 interest will increase to 87.71%