REG - Power Metal - Canadian Lithium Projects – Earn-In Update

Power Metal ResourcesAnnouncement

12/07/2022 10:45

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RNS Number : 1738S  Power Metal Resources PLC  12 July 2022

12 July 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Canadian Lithium Projects - Earn-In Update

 

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 respect of its earn-in agreement to acquire 100%  of
the Authier North and Duval East lithium properties ("Authier North" and
"Duval East", collectively the "Properties"), located in the prolific Val D'Or
mining camp in Quebec, Canada (the "Earn-In").

The Authier North and Duval East Earn-In interest is held by Power Metal's
wholly-owned Canadian subsidiary Power Metal Resources Canada Ltd ("POW
Canada") which is focused on strategic energy metal opportunities within
Canada's top mining jurisdictions.

EARN-IN AGREEMENT CONTINUATION

The Earn-In agreement was originally signed in July 2021 and a link to the
announcement covering this is below:

https://www.londonstockexchange.com/news-article/POW/agreement-canadian-lithium-properties/15061434
(https://www.londonstockexchange.com/news-article/POW/agreement-canadian-lithium-properties/15061434)

The Earn-In is staged with annual decision points to consider continuation
into the next year and Power Metal have notified the property owner that the
Company will continue into year two of the Earn-In.

RATIONALE FOR CONTINUATION

·    On the back of strong lithium price fundamentals, and continued
success at the neighbouring Sayona Mining Limited ("Sayona Mining"; ASX: SYA)
Authier Lithium Project ("Authier Project"), Power Metal has made the decision
to continue into the 2(nd) year of the Authier North Lithium Earn-In.(1)

 

·    The Company engaged a Canada-based lithium geologist to produce a
Property Evaluation report (the "Evaluation"). The Evaluation considered the
Authier North 2021 programme results, as well as the ongoing results from the
neighbouring Authier Project in order to determine next exploration steps.

 

·    On 1 March 2022, Sayona Mining announced a doubling of their Quebec
lithium resource base, including an updated JORC (2012) compliant Measured,
Indicated and  Inferred Mineral Resource at their Authier Project of
17,136,000 tonnes at 1.01% Li(2)0.(2)

 

·    The Sayona Mining updated Authier Project Resource model includes the
further downdip extension of their main lithium-bearing pegmatite dyke towards
Power Metal's Authier North Property, as well as the establishment of an
additional, sub-parallel pegmatite dyke which outcrops approximately 350m
closer to the shared claim border with Authier North.(2) This newly discovered
dyke also dips towards the Authier North Property.

 

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

"Power Metal's Authier North and Duval East lithium Properties represent a
strategic lithium interest for the Company with a footprint adjacent to the
highly successful Authier Project held and operated by Sayona Mining.

Our work has identified priority lithium targets and we intend to continue our
ground exploration work at the Properties in the near future."

 

PROPERTY EVALUATION AND EXPLORATION NEXT STEPS

The evaluation that was completed highlighted a priority Target Area (the
"Target") on the Authier North Property that was not investigated by the
Company during the 2021 programme. This Target is located near the eastern
property boundary, where there is a contact zone between the La Motte
Batholith (granitic intrusive) and the surrounding metasediments. This contact
zone represents an analogous geological setting to that of lithium-bearing
pegmatite dyke constituting the Authier Project Mineral Resource, which is
located approximately 2km along strike to the west.

Power Metal will be sending a geologist to site in order to geologically map
and prospect the approximately 800m of strike-length of this contact zone
which exists within the Authier North Property. The next exploration steps for
the property will be planned based on the findings of this work.

EARN-IN CONTINUATION PAYMENTS

By continuing into the second year of the Earn-In with Eagle Ridge Mining
Limited, the following has become payable:

·    Cash payment of CAD$25,000.

 

·    Share-based payment of CAD$50,000, which is satisfied by the issue of
new ordinary shares with the price determined using a 10-day volume weight
average price ("VWAP") over the period 27 June to 8 July 2022. That VWAP is
0.85859p per share, and at the current exchange rate, CAD$50,000 is equivalent
to £32,197, so 3,749,985 new Power Metal ordinary shares of 0.1p each
("Earn-In Shares") will be issued to Eagle Ridge Mining Limited.

 

Once issued, the Company has satisfied all requirements outlined in order to
proceed to year 2 of the Earn-In. Prior to the expiry of two years from the
date of the Earn-In original agreement, Power Metal must incur CAD $50,000 in
exploration costs on the Property.

 

FURTHER INFORMATION

Authier North Property

The Authier North Property consists of fifteen (15) mineral claims covering an
area of approximately 560-hectares and is prospective for lithium-bearing
pegmatites and base-metal mineralisation.

The Authier North Property shares an extended claim border with Sayona
Mining's Authier Lithium Project which hosts a JORC (2012)  compliant
Measured, Indicated and  Inferred Mineral Resource of 17.1Mt at 1.01% Li(2)O
(Lithium Oxide). The deposit is less than 700m from the shared claim boundary.

Sayona Mining published a revised Definitive Feasibility Study ("DFS" reported
11 November 2019 (3)) on their Authier Lithium Project. This DFS highlighted a
net present value (discount factor 8%) of CAD$216 million and a pre-tax
internal rate of return at 33.9% based on a Proven and Probable Ore Reserve
estimate of 12.10 Mt @ 1.00% Li2O at a 0.55% Li2O cut‐off grade.

 

Additionally, on 11 January 2021(4), Sayona Mining announced a strategic
partnership and offtake agreement with Piedmont Lithium Limited (ASX:PLL,
Nasdaq:PLL) which includes a 25% ownership stake in Sayona Quebec (a wholly
owned subsidiary of Sayona Mining), as well as 50% (60,000 tpa) offtake
agreement for future production from the Authier Lithium Project. Sayona
Mining reported they expect full commercial production of spodumene
concentrate to commence between July 2023 and July 2024.

Very little historic exploration has been completed on the Authier North
Property, with reports of five short drillholes completed in 1955 by Lyndhurst
Mining Company Ltd (four of which returned elevated lithium and nickel
assays), and only 4 rock samples which returned strongly anomalous chromium
and nickel results (up to 0.42% Cr(2)0(3) (Chromium (III) Oxide), and 0.21%
nickel).

Duval East Property

The Duval East Property is located 3km east of the Authier North property and
is located immediately east of a historical, non-compliant Duval lithium oxide
resource. It is postulated that the geology containing the historical resource
may extend towards the east onto the Duval East Property.

 

GLOSSARY

Batholith - large body of igneous rock formed beneath the Earth's surface by
the intrusion and solidification of magma.

contact zone - Where two differing geological units are in contact with each
other.

Dyke - An intrusion of igneous rock cutting across existing strata.

Granite - A coarse-grained (phaneritic) intrusive igneous rock composed mostly
of quartz, alkali feldspar, and plagioclase.

Meta-sediments - Partially metamorphosed sedimentary rocks.

Pegmatite - An igneous rock showing a very coarse texture, with large
interlocking crystals usually greater in size than 1 cm (0.4 in) and sometimes
greater than 1 meter (3 ft). Most pegmatites are composed of quartz, feldspar,
and mica, having a similar silicic composition to granite.

REFERENCES

1:             https://tradingeconomics.com/commodity/lithium

2:             Sayona Mining Limited, ASX announcement dated 1
March 2022:
https://sayonamining.com.au/wp/wp-content/uploads/2022/03/SYA_Doubling-resource-base_1-Mar-22.pdf
(https://sayonamining.com.au/wp/wp-content/uploads/2022/03/SYA_Doubling-resource-base_1-Mar-22.pdf)

3:             Sayona Mining Limited, ASX announcement dated 11
November 2019:
https://sayonamining.com.au/wp/wp-content/uploads/2019/11/SYA_ASX-Announ_20191111_Revised-Authier-DFS.pdf
(https://sayonamining.com.au/wp/wp-content/uploads/2019/11/SYA_ASX-Announ_20191111_Revised-Authier-DFS.pdf)

4:             Sayona Mining Limited, ASX announcement dated 11
January 2021:
https://sayonamining.com.au/wp/wp-content/uploads/2021/01/SYA_ASX-Announ_20210111_Piedmont-Transaction.pdf
(https://sayonamining.com.au/wp/wp-content/uploads/2021/01/SYA_ASX-Announ_20210111_Piedmont-Transaction.pdf)

 

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.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 3,749,985 Earn-In Shares to be admitted to
trading on AIM which is expected to occur on or around 19 July 2022
("Admission"). The Earn-In 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 1,480,786,146 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.

 

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.

 

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 (http://www.firstclassmetalsplc.com)

www.goldenmetalresources.com (http://www.goldenmetalresources.com)

www.firstdevelopmentresources.com (http://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 (http://www.kavangoresources.com)

 

 Project                Location   Current          Work Completed or Underway                                                   Results Awaited

                                   POW %

 Alamo Gold Project     USA        Earn-in to 75%   Technical reports received following excavation of multiple test pits and    Analysis of technical reports and potential follow-on work programme under
                                                    mapping & sampling completed.                                                review.
 Athabasca Uranium      Canada     100%             Data compilation across uranium properties.                                  Interpretation results from all Properties complete. Next steps upcoming.
 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  Finalise next exploration steps and action plan.
                                                    party review.
 Victoria Goldfields    Australia  49.9%            Diamond drill programme completed. Review of Ajax & Berringa mine            Final drill programme results analysis and resource potential analysis from
                                                    remaining resource potential.                                                former high-grade producing mines in granted licences.

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

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