REG - Power Metal - Acquisition Complete - Berringa Gold Mine

Power Metal ResourcesAnnouncement

22/09/2022 14:45

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RNS Number : 3483A  Power Metal Resources PLC  22 September 2022

22 September 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Acquisition of Historic Berringa Gold Mine Complete - Victoria, Australia

Power Metal Resources PLC (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio
announces an update in relation to its joint venture ("JV") subsidiary New
Ballarat Gold Corporation PLC ("NBGC"), which is focused on the prolific
Victorian Goldfields of Australia. The JV is held between Power Metal (49.9%)
and its partner, London-listed Red Rock Resources PLC (50.1%).

Red Rock Australasia Pty Ltd ("RRAL"), the 100% owned Australian operating
subsidiary of NBGC, entered an agreement ("Agreement") on 6 July 2022 to
acquire the exploration licence EL5535 covering the historic Berringa Mine
("Berringa" or the "Project") from Balmaine Gold Pty Ltd ("Vendor") which is a
wholly owned subsidiary of Golden Point Group Pty Ltd ("GPG"), itself the
subsidiary of Shen Yao Holdings Ltd, a company listed on the Singapore
Exchange (the companies collectively being the "Vendor Group").

The original announcement in respect of the Agreement may be viewed through
the link below:

https://www.londonstockexchange.com/news-article/POW/acquisition-of-historic-berringa-gold-mine/15528927
(https://www.londonstockexchange.com/news-article/POW/acquisition-of-historic-berringa-gold-mine/15528927)

A map highlighting the location of the Project may be seen on the Company's
website through the following link:

https://www.powermetalresources.com/berringa-map-2/
(https://www.powermetalresources.com/berringa-map-2/)

ACQUISITION COMPLETION

·    EL5535 has now been successfully transferred to RRAL, which now holds
a 100% interest in the exploration licence.

 

·    RRAL has paid the initial consideration of AUD$20,000 to the Vendor,
with further milestone consideration payments detailed in the Further
Information section below.

 

·    RRAL are finalising a detailed exploration plan for the period up to
and following the five year renewal being applied for to the licence which
expires on 16 November this year, which will include planned drilling at
EL5535. The exploration plan will be based on abundant historical exploration
data available, allowing for highly refined drilling programme design.(1,2)

 

·    Planned drilling will test for extensions of known gold
mineralisation at the Berringa Gold Mine, which has historical production of
293,250 ounces of gold (Au) from 1898-1952 at an average grade of 8.3g/t
Au.(1)

 

·    The focus of planned drilling is to demonstrate the remaining gold
endowment which as outlined in 2004 and 2014 technical reports, includes
possible exploration target ranges down to 1000m of 0.91 to 3.89million(*,**)
and 0.70 to 2.91million(*,**) ounces of Au respectively.(1,2) Further details
in respect of these exploration targets are provided below.

 

·    RRAL is in ongoing discussions with the Vendor Group, regarding the
possibility of processing ore at their nearby Ballarat Gold Mine (located
approximately 25km away), should RRAL discover and develop an economic
deposit. This arrangement would dramatically reduce both mine build-out time
horizons and heavy capital requirements for building a new standalone
processing facility.

Paul Johnson, Chief Executive Officer of Power Metal Resources PLC commented:

"Investors often tell me of their excitement with regard to New Ballarat Gold
Corporation and the opportunity it represents.  We share that excitement as
NBGC holds a significant land position in the Victoria Goldfields of
Australia, which across its footprint has extensive evidence of gold
prospectivity.

Centered in Ballarat we have an established operational team who have been
running the local operations diligently and building the potential across the
licence areas we hold.  These licence areas contain advanced opportunities,
with a number of high-grade former producing mines and also the wider blue-sky
exploration potential that offers the potential for significant valuation
uplift on discovery.

Power Metal is keen to see NBGC flourish, and today's news is an important
step forward."

FURTHER INFORMATION

Exploration Licence 5535 was previously held by Balmaine Gold Pty Ltd, which
is a wholly owned subsidiary of Golden Point Group Pty Ltd ("GPG"), itself the
subsidiary of Shen Yao Holdings Ltd, a company listed on the Singapore
Exchange (the companies collectively being the "Vendor Group").

GPG are the owners of the nearby Ballarat Gold Mine, which has annual
production guidance of 40,000 to 50,000 ounces of gold per year.(4)

The Vendor Group's licence has its origins in the acquisition of the tenement
area in 1998 with the view of the tenement, supplying additional gold to the
nearby Ballarat Mine. After passing through Lihir Gold, the tenement came into
the hands of the Vendor Group. The mining licence was surrendered in 2014,
with an exploration licence covering the same area then being granted to the
Vendor. For various reasons, the work on the tenement has not been as
extensive as planned.

A 2004 Berringa Exploration Strategy Technical report was produced by Hamish
Forgan & Steven Olsen on behalf of a previous owner of the Licence,
Ballarat Goldfields NL ("Ballarat Goldfields"). Mr Olsen was an employee of
Ballarat Goldfields and a compent person as defined by the JORC code. The 2004
report highlighted a proposed exploration target ranging from 913,488 to
3,889,718 ounces of gold down to a depth of 1000m at Berringa.(2)

Subsequently, on the surrender of the previous mining licence, a further
technical report was prepared which summarised the findings from work
undertaken from 1992 to October 2014. The 2015 report was produced by Jason
Fothergill on behalf of the operators at the time, Caslemaine Goldfields Pty
Ltd.  Within the 2015 report, an updated proposed exploration target was
calculated and which ranged from 697,112 to 2,907,790 ounces of gold down to a
depth of 1000m.(1) The results from this report are summarised in the below
table.(*,**)

 Depth Extent  Theoretical tonnage  Assumed Grade     Target Size    Risk Weighted Exploration Target
 0 - 300m      475 - 2,974k t       5.8 - 14.2g/t Au  554k oz. Au    217k oz. Au
 300 - 600m    494 - 5,793k t       5.8 - 14.2g/t Au  1.080 Moz. Au  225k oz. Au
 600 - 1,000m  558 - 6,827k t       5.8 - 14.2g/t Au  1.273 Moz. Au  255k oz. Au
 TOTAL         1.5 to 15.6 Mt       5.8 -14.2g/t Au   2.907 Moz. Au  0.697 Moz. Au

*The exploration targets tabled above are not to be considered as an estimate
of a Mineral Resource or Ore Reserve as those terms are defined in the JORC
(2012) Code. The potential quantity and grade is conceptual in nature, that
there has been insufficient exploration to estimate a Mineral Resource It is
uncertain if further exploration will result in the subsequent estimation of
any Mineral Resource. A drilling programme planned to test the valididy of the
exploration target outlined above is currently being planned, and details will
be included in the licence renewal application which will be submitted prior
to the expiration date of 16 November 2022. Further updates regarding the
proposed drilling programme will be supplied to the market in due course.

**The top end of the exploration target ranges produced represents the total
ounce potential that would exist if each target area (0-300m, 300-600m,
600-1000m) had the same gold endowment as the historically mined orebodies at
Berringa. Several risk factors were applied to the above calculation, which
take into account the unknown location of various faults, folds and
diltational jogs down to 1000m. The low end of the exploration target range
reflects the full application of all calculated risk factors to the top end
estimate.

Transaction Terms

For the purchase of 100% of the Vendor's interest in the Licence to RRAL,
covering the historical Berringa Gold Mine, the following consideration is
payable:

·    The issue to the Vendor staged cash payments totalling AUD$500,000 as
outlined below:

o  Initial payment of AUD$20,000 payable on successful transfer of the
exploration licence to RRAL. This payment has now been made.

o  On successful renewal of the Licence for an additional term of 5 years,
which currently expires on 16 November 2022, an additional payment of
AUD$130,000, which can be satisfied through the issue of either cash and/or
publically traded shares.

o  On public release of a initial JORC Compliant resource estimate of greater
than 100,000 cumulative ounces of gold in the Inferred category, a further
payment of AUD$350,000, which can be satisfied through the issue of either
cash and/or publically traded shares.

·    Upon the successful commencement of commercial production, a 1.5% Net
Smelter Return ("NSR") royalty will be issued to the Vendor over the Licence,
with total payments capped at AUD$1,500,000 over the life of the NSR royalty.

·    RRAL inherits the responsibility for a pre-existing 2.5% NSR Royalty,
with total payments capped at AUD$50m, payable to Altus Strategies Plc. This
royalty is part of a wider royalty covering actual or potential gold
production from a number of licences including that from the Ballarat gold
mine.  Of the AUD$50m, to date AUD$14.5m has been received by the royalty
holder and therefore AUD$35.5m of the capped amount remains.(5)

New Ballarat Gold Corporation

NBGC through its wholly owned local operating subsidiary RRAL, holds a strong
land position comprising 15 granted exploration licences for a total area of
1,841km(2) within the gold fields of Victoria, Australia, principally around
the mining centre of Ballarat.

5 licences covering 493km(2) await grant. The company has carefully assembled
its portfolio of properties comprising a broad range from robust exploration
targets to near term resource potential, all of which remain largely
undeveloped by modern explorers.

With the first tenements granted only in 2021, RRAL has already conducted
detailed exploration of its initial targets, including a diamond drill test of
two prospects starting in December 2021.

References

(1)Final Technical Report Berringa Gold Project MIN 4191 Oct 2014. J
Fothergill Balmaine Gold Pty Ltd

(2)Berringa Exploration Strategy Technical Report: Sept 2004, H Forgan

(3)Sharp, D. & Sheerin K: OreTech Mining Solutions - Tenement Review and
Exploration Strategy - EL007330 Daylesford. Unpublished independent geologist
report prepared for Red Rock Australasia Pty Ltd. (2020).

 

(4)https://ballaratgoldmine.com.au/our-mine/

(5) Royalty Overview Dashboard - Altus Strategies
(https://altus-strategies.com/projects/royalty-dashboard/caserones-2/
(https://altus-strategies.com/projects/royalty-dashboard/caserones-2/) )

QUALIFIED PERSON STATEMENT

The technical information in this report is compiled by David Holden, BSc,
MBA, MEM, who is a member of the Australian Institute of Geoscientists and a
director of NBGC, and the Executive Officer and Exploration Manager of RRAL.
He is a member of a recognised professional organisation and has sufficient
relevant experience to qualify as a qualified person as defined in the
Guidance Note for Mining, Oil and Gas Companies, published by AIM.

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/
(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.

 

 Project                Location  Current          Work Completed or Underway                                                  Results Awaited

                                  POW %

 Athabasca Uranium      Canada    100%             Ground exploration programme underway at 3 properties.  Continuing data     Results from ground exploration including spectrometer analysis, sampling and
                                                   analysis across the property portfolio.                                     mapping.
 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%(#)           K1-6 conductor target drilling underway and MLEM surveys over T1-6, T1-14,  Drill programme updates and findings from MLEM surveys.
                                                   T1-3 and T2-3 targets completed.
 Tati Project           Botswana  100%             RC drilling and sampling of mine dumps complete.                            Review of mine dumps sampling and results from RC drill programme.

(#) subject to completion of acquisition announced 18.5.22 interest will
increase to 87.71%

 

Exploration work programmes may also be underway within Power Metal investee
companies and 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.

 

These interests are summarised in the table below:

 

 Company                          Status/Operations                                                           Link
 First Class Metals PLC           Investment - POW 28.19%                                                     www.firstclassmetalsplc.com (http://www.firstclassmetalsplc.com)

                                  Exploration in the Schreiber-Hemlo region of Ontario, Canada
 First Development Resources PLC  Planned IPO - POW 62.12%                                                    www.firstdevelopmentresources.com (http://www.firstdevelopmentresources.com)

                                  Exploration in Western Australia and the Northern Territory of Australia
 Golden Metal Resources PLC       Planned IPO - POW 83.13%                                                    www.goldenmetalresources.com (http://www.goldenmetalresources.com)

                                  Exploration and development in Nevada, USA
 Kavango Resources PLC            Investment - POW 14.03% (subject to completion of Kanye Resources disposal  www.kavangoresources.com (http://www.kavangoresources.com)
                                  announced 8.7.22)

                                  Exploration in Botswana
 New Ballarat Gold PLC            Planned IPO - POW 49.9%                                                     A new website is currently in development which will be found at

                                                                           www.newballaratgoldcorp.com (http://www.newballaratgoldcorp.com) .
                                  Exploration in the Victoria Goldfields of Australia

                                                                                                              In the interim further information in respect of NBGC can be found at:

                                                                                                              https://www.powermetalresources.com/project/victoria-goldfields/
                                                                                                              (https://www.powermetalresources.com/project/victoria-goldfields/) .

 Uranium Energy Exploration PLC   Planned IPO - POW on listing estimated 40-55%                               www.uraniumenergyexploration.com (http://www.uraniumenergyexploration.com)

 

 

 

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