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Basic Materials
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Micro Cap
Market Cap £28.6m
Enterprise Value £27.4m
Revenue £9.00k
Position in Universe 1390th / 1820

Power Metal - Exercise of Ontario Gold Property Options

Thu 25th February, 2021 2:03pm
RNS Number : 3918Q
Power Metal Resources PLC
25 February 2021
 

25 February 2021

Power Metal Resources PLC

("Power Metal" or the "Company")

Exercise of Ontario Options - Magical and Enable Properties

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce that following due diligence work the Company has exercised its option to acquire both the Magical Property ("Magical") and Enable Property ("Enable" together the "Properties") located on the prospective Schreiber-Hemlo Greenstone Belt in north-western Ontario, Canada.

These are the final two of four gold exploration properties upon which the Company signed an exclusive option to acquire a 100% interest (as announced 26 January 2021) and follows the McKellar option exercise and the Coco East option exercise which were announced on 18th and  24th February 2021 respectively.

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented: 

"The exercise of our options over the Magical and Enable properties concludes Power Metals' current acquisition strategy over the Schreiber-Hemlo Greenstone Belt in Ontario. Power's portfolio of exploration properties provides us the opportunity to build value, within a 120km strike length, of a prolific exploration belt.

We will now commence a phase of desk-based remote sensing targeting and exploration planning with a view to being in a position to initiate ground reconnaissance and target follow-up work after the snow thaw.  We look forward to providing further updates as plans progress."

MAGICAL PROPERTY OVERVIEW

-      Magical is located 9km northwest of Barrick Gold Corporation's Hemlo Mine which has produced more than 21Moz gold and has been operating continuously for more than 30 years1.

 

-      The property is located upon the North Limb of the Schreiber-Hemlo Greenstone Belt, the property is located at the prospective contact between the intrusive Gowan Lake Pluton and metavolcanic/metasedimentary rock packages, with a similar geological setting to the Hemlo deposit. Magical offers potential for orogenic style gold mineralisation.

 

-      The regional geophysics data shows a north trending regional scale magnetic structure intersects the intrusion within the centre of the property, defining a preliminary target for investigation.

 

-      Magical is largely unexplored apart from the easternmost Claim cell where, in 1995, Hemlo Gold Mines Inc drilled an induced polarisation ("IP") geophysics anomaly. Diamond drill hole V95-2 reportedly intersected a 7m zone of silicification containing sericite and sulphides and 12.6m of feldspar porphyry with disseminated pyrite.

 

-      Magical directly abuts and covers the westward strike extension of the Canadian listed junior Hemlo Explorers Inc (TSX-V: HMLO) North Limb Property2 .

 

MAGICAL CLAIM STATUS

-      The Magical property consists of a total of 14 Single Cell Mining Claims ("Claims") covering an area of circa 3.0km2.

 

-      Claims are valid through to 27 July 2022 upon which they can be renewed on an annual basis. For renewal the Magical Claims will require an aggregate work spend of CAD$5,600 (circa £3,145) prior to the individual Claim renewal dates.

 

ENABLE PROPERTY OVERVIEW

-      The Enable property is located on the western part of the Schreiber-Hemlo Greenstone Belt, at the contact of metavolcanic and volcano-sedimentary rock packages with the Terrace Bay Batholith. 

 

-      On a regional scale the Terrace Bay Batholith contact is spatially associated with at least 28 documented gold showings including the Northshore Property which has historical resources of 1.2Moz Au3. Northshore has recently been subject to open pit mining studies and is currently held by Canadian Securities Exchange listed Ready Set Gold Corp. (CSE:RDY).

 

-      Overburden cover has been attributed to the reason the Enable portion of the batholith contact remains unexplored. This presents an opportunity to discover new gold mineralisation utilising modern exploration technologies.

 

-      Access to the property is good, being 4km north of the town and railway stop of Terrace Bay and with the Trans-Canada Highway running within 200m of the eastern boundary. The centre of the property is crossed by a public highway with logging roads and a lake providing access to the western part of the property.

 

ENABLE CLAIM STATUS

-      The Enable property consists of a total of 41 Claims covering an area of circa 8.7km2.

 

-      Claims are valid through to 25 July 2022 upon which they can be renewed on an annual basis. For renewal the Enable Claims will require an aggregate work spend of CAD$16,400 (circa £9,210) prior to the individual Claim renewal dates.

 

 

ACQUISITION TERMS

The vendors of the Option (the "Vendors") are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021.

In exercising the Option to acquire a 100% interest in the Magical and Enable properties POW will make the following cash and equity consideration:

Property Name

Cash (CAD$)

POW Shares (CAD$)

Note: POW Acquisition Shares to be issued

Total Consideration

(CAD$)

Magical

20,000

20,000

384,000

40,000

Enable

30,000

30,000

576,000

60,000

 

The POW shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share ("Acquisition Shares").  The cash costs of the acquisition are funded from Power Metal's existing Canadian Dollar cash account.

The Vendors retain a 2% net smelter royalty ("NSR") on each property, Power Metal may purchase 1% of each NSR, at any time, by making a cash payment to the Vendors of CAD$500,000.

 

The Vendors will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities.

 

 

EXPLORATION PLAN

-      Ongoing exploration spend will be at the discretion of Power Metal as the 100% owner of the properties.

 

-      Preliminary exploration work is expected to include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.

 

-      The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost-effective basis.

 

Admission and Total Voting Rights

Application will be made for the 960,000 Acquisition Shares to be admitted to trading on AIM, which is expected to occur on or around 4 March 2021 ("Admission"). The Acquisition 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 1,136,877,930 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.

Reference Sources

1: Barrick Gold Corporation, Hemlo Project webpage:  https://www.barrick.com/English/operations/hemlo/default.aspx

2: Hemlo Explorers Inc (TSX-V: HMLO) North Limb Property webpage: https://hemloexplorers.ca/projects/hemlo-north-limb/overview/ 

3: Mineral resource estimate: Technical Report on the Mineral Resources of the Northshore Property, Thunder Bay Mining Division, Priske Township, Ontario, Canada with an effective date of 28 April 2014, by Giroux Consultants Ltd. and Minorex Consulting Limited.

 

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 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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