TIDMPOW
RNS Number : 1794M
Power Metal Resources PLC
19 January 2021
19 January 2021
Power Metal Resources PLC
("Power Metal" or the "Company")
Option Signed - Australia Copper-Gold Acquisition
Power Metal Resources PLC (LON:POW) the AIM listed metals
exploration and development company is pleased to announce the
Company has secured an exclusive 60-day option (the "Option") in
respect of a potential new acquisition of copper-gold focused
exploration interests in the Paterson Province in the eastern
Pilbara Region of Western Australia (the "Project").
The Paterson Province is considered highly prospective for
gold-copper and base metal mineral systems and is currently of
particular focus for resource companies with a significant level of
exploration activity underway across the region. This level of
interest follows recent high-profile copper and gold discoveries by
Rio Tinto at their Winu property(1) and by Greatland Gold plc
(LON:GGP) with the Havieron discovery(2) . Notably, several major
groups in search of Tier 1 deposits have entered into joint-venture
/ farm-in deals with junior explorers to expedite exploratory
work.
The area also has developed mine and processing infrastructure
due to the presence of established mining operations, including
Newcrest Mining's Telfer Mine(3) and the X-Metals Nifty Copper
Operation(4) (planned as a mine restart).
Paul Johnson Chief Executive Officer of Power Metal Resources
plc commented:
"Power Metal is keen to build its exposure to Australian base
and precious metals exploration where there is, in our view, the
potential for large scale metal discoveries in a secure and stable
operating environment.
Through our joint venture in the Victoria Goldfields, and
subject to due diligence, through this acquisition, we will have
operating interests in two of the major centres for exploration
activity in Australia.
The level of interest in the Paterson Province has been somewhat
dramatic after the Winu and Havieron discoveries, much as the
success of the Fosterville gold mine in the State of Victoria led
to a surge in exploration activity in 2020.
Power Metal is positioning itself to develop a diverse and
expansive exploration business in Australia, and this is another
important step forward."
The Option:
- Power Metal has signed an Option agreement (the "Option
Agreement") to acquire a 100% interest in First Development
Resources PTY Ltd ("FDR"), an Australian private company holding
the Wallal Project and an option to acquire the Ripon Hills
Project, (ownership structure as outlined below).
- The Option Agreement provides a 60 business-day option period,
during which Power Metal may undertake due diligence, and the terms
for option exercise to acquire 100% of FDR from its current
shareholders (the "Vendors").
- The Option Agreement fee of GBP30,000 is to be satisfied
through the issue to the Vendors of one million Power Metal new
ordinary shares of 0.1p each in the Company ("Ordinary Shares") at
an issue price of 3p per share (the "Option Shares").
FDR and its Business Interests:
- FDR holds two projects interests; the Wallal Project and the Ripon Hills Project.
- The Wallal Project currently 100% owned by FDR comprises
E45/5816 an exploration licence application covering 390km(2) in
the western quadrant of the Paterson Province with a favourable
lithospheric setting for substantial base metal deposits consistent
with Rio Tinto's (ASX: RIO) Winu discovery - predominantly
copper-gold-silver with a JORC compliant Inferred Resource of 503Mt
@ 0.45% Cu equivalent.
- FDR also has a right to acquire 100% of the Ripon Hills
Project from Great Sandy Pty Ltd ("Great Sandy") a private
Australian Company, (with consideration for the transfer being
satisfied by Great Sandy nominees receiving a proportion of
consideration outlined below under "Upon Option Exercise".) The
Ripon Hills Project comprises E45/5088 a granted exploration
licence covering 4 2km(2) prospective for base metal-gold
mineralisation and is proximal to Rumble Resources' (ASX: RTR)
Braeside Project where significant new base metal discoveries have
been made.
Upon Option Exercise:
- Should Power Metal at its sole volition exercise the Option
for the acquisition of FDR the Company will pay initial
consideration of A$50,000 in cash (circa GBP28,304) and GBP150,000
payable through issue to the Vendors of 5 million new Ordinary
Shares at an issue price of 3.0 pence per share ("Initial Exercise
Shares") (note: A$20,000 (circa GBP11,322) will be used to
eliminate shareholder loans in the accounts of FDR and therefore on
acquisition FDR will carry no liabilities). The cash component of
the consideration above will be funded from Power Metal existing
Australian Dollar cash resources.
- In addition, Power Metal will issue the Vendors 5 million
warrants with an exercise price of 4.5p per new Ordinary Share and
life to expiry of 3 years from the date of Option exercise
("Initial Exercise Warrants"). Should the volume weighted average
price ("VWAP") of Power Metal shares meet or exceed 7.0 (seven)
pence for a 5 consecutive trading days Power Metal may serve notice
on the Vendors providing 10 trading days to exercise and pay for
the Initial Exercise Warrants.
- Upon grant of exploration license application E45/5816 (Wallal
Project) and the transfer of the granted exploration license
E45/5088 (Ripon Hills Project) into FDR a further GBP100,000
consideration is payable through the issue of 2,857,143 new
Ordinary Shares at an issue price of 3.5p each.
- In addition, upon the grant of exploration license application
E45/5816 (Wallal Project) and the transfer of the granted
exploration license E45/5088 (Ripon Hills Project) into FDR, Power
Metal will issue the Vendors 2,857,143 warrants with an exercise
price of 5p per new Ordinary Share and life to expiry of 3 years
from the date of Option exercise ("Grant Warrants"). Should the
volume weighted average price ("VWAP") of Power Metal shares meet
or exceed 10.0 (ten) pence for a 5 consecutive trading days Power
Metal may serve notice on the Vendors providing 10 trading days to
exercise and pay for the Grant Warrants.
- The Vendors will retain a 2% net smelter royalty ("NSR") over
the licence application E45/5816 and granted licence E45/5088 and
Power Metal will have the right to purchase 1% of this NSR for
A$1,000,000 payable as cash or in full or part (and at Power
Metal's election) by the issue of new Ordinary Shares based on the
Power Metal share volume weighted average price in the 7 trading
days prior to date of notification to the Vendors of the NSR
purchase.
- The consideration items outlined above, on Option exercise,
will not be paid until the regulatory approvals have been received
including any such approval required from the Foreign Investment
Review Board, Australia.
- The Vendors and their professional licensing and geological
teams will continue to work with Power Metal following Option
exercise to undertake ground exploration and to further build the
licence footprint in the Paterson Province.
FURTHER INFORMATION
Wallal Project - E45/5816 - Exploration Licence Application
The Wallal Project comprises a large, well located 390km(2)
area, in the western quadrant of the Paterson Province. Notably,
the Wallal Project has a favourable lithospheric setting for
substantial base metal deposits consistent with Rio Tinto's (ASX:
RIO) Winu discovery - predominantly copper-gold-silver with a JORC
(2012) compliant Inferred Resource of 503Mt @ 0.45% Cu
equivalent(1) .
The tenure covers an area of transported sand cover including
linear north west-south east trending aeolian dunes. Furthermore,
the Wallal Project is located on an interpreted basin bounding
structure known as the Wallal embayment.
Interestingly, the geology on the eastern boundary of the Wallal
Project - associated with a 'gravity ridge' geophysical anomaly -
is similar to the structural setting of Rio Tinto's Winu discovery
(the Anketell Regional Gravity Ridge). Notably, at Wallal there is
a 46km strike feature, which is part of a geological structure
called the Vines Fault, that is considered highly prospective
copper-gold mineralisation.
It is envisaged that potential drilling targets might be
identified utilising high precision gravity, seismic and magnetic
survey techniques focussing on specific zones within the apparent
gravity ridge.
Ripon Hills Project - E45/5088 - Granted Exploration Licence
The Ripon Hills Project (42km(2) ) contains outcropping Carawine
Dolomite rocks of the Archaean Hamersley Group overlying rocks of
the Fortescue Group. Furthermore, the Ripon Hills Project is
considered prospective for base metal-gold mineralisation
associated with deep seated north to north west trending fault
structures, as they have the potential to be conduits for various
styles of hydrothermal mineralisation.
Ripon Hills is proximal to Rumble Resources' (ASX: RTR) Braeside
Project where significant new base metal discoveries have been
made(5) . Specifically, this is a regional scale, 60km long,
fracture zone containing porphyry to epithermal mineralised systems
with 45 priority Cu-Au-Zn-Pb-Ag targets and five deposit types
delineated. Encouragingly, this materially enhances the
prospectivity of the Ripon Hills Project, which is largely
under-explored, as the underlying geology is similar.
Notably, the priority exploration targets within the Ripon Hills
Project are interpreted north to north westerly striking deep
seated fault structures. Further, these targets have the potential
to host various styles of hydrothermal base metal and gold
mineralisation, similar to what is apparent in the Braeside
Project. Interestingly, mineralisation can occur in the underlying
Fortescue Group rocks as well as the Carawine Dolomite.
Exploration Rationale
Having a footprint in the world class Paterson Province in
Western Australia has the potential to deliver significant value
for shareholders. While the area has excellent mining
infrastructure, there are many parts of the region - highly
prospective for copper-gold mineralisation - which are
under-explored. In turn, this significantly enhances the upside
potential as much of the area is masked by surficial cover.
Using an array of modern exploration techniques, comprising
reconciling geophysics and geochemical surveys, the exploration
would seek to efficiently and cost effectively identify priority
test-drill targets.
Additional Disclosure
In the 6 months ended 31 December 2020 FDR made an operating
loss of A$18,914 (circa GBP10,707) and as at 31 December 2020 FDR
had net liabilities of A$19,939 (circa GBP11,287).
ADMISSION AND TOTAL VOTING RIGHTS
Application will be made for the 1,000,000 Option Shares to be
admitted to trading on AIM, which is expected to occur on or around
26 January 2021 ("Admission"). The Option Shares will rank pari
passu in all respects with the ordinary shares of the Company
currently traded on AIM.
Following Admission, the Company's issued share capital will
comprise 1,056,218,972 ordinary shares of 0.1p each. This number
will represent the total voting rights in the Company and may be
used by shareholders as the denominator for the calculation by
which they can determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure and Transparency
Rules.
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.
References:
Source 1: Rio Tinto PLC announcement
https://www.riotinto.com/en/news/releases/2020/Rio-Tinto-reveals-maiden-Resource-at-Winu-and-new-discovery
Source 2: Greatland Gold PLC announcement
https://polaris.brighterir.com/public/greatland_gold/news/rns/story/wkqm9ow
Source 3: Newcrest Mining Ltd :
https://www.newcrest.com/our-assets/telfer
Source 4: Metals X Ltd: https://www.metalsx.com.au/copper/
Source 5 : Rumble Resources Ltd:
http://rumbleresources.com.au/braeside_project.php
The information contained within this announcement is considered
to be inside information prior to its release, as defined in
Article 7 of the Market Abuse Regulation No.596/2014 and is
disclosed in accordance with the Company's obligations under
Article 17 of those Regulations.
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 metal exploration in North America and Australia
together with base and strategic metal exploration in Africa.
Project interests range from early stage greenfield exploration to
later stage prospects currently the subject of 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.
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