REG - Power Metal - FDR Australia – Corporate Update

Power Metal ResourcesAnnouncement

11/05/2022 15:15

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RNS Number : 1524L  Power Metal Resources PLC  11 May 2022

11 May 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

First Development Resources Australia - Corporate Update

 

Power Metal Resources plc (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio,
announces a corporate update for its 83.33% owned subsidiary First Development
Resources Limited ("FDR UK").

ACQUISITION OF PARDOO RESOURCES PTY LIMITED

Background

Power Metal has signed an Agreement ("Agreement") for the 100% acquisition of
Pardoo Resources Pty Limited ("Pardoo") by FDR UK.

Pardoo is an Australian resource exploration project holding company which
currently holds projects in trust for First Development Resources Pty Limited
("FDR Australia"), a wholly owned Australian subsidiary of FDR UK.

The projects held in trust are in the Paterson Province of Western Australia
(the Paterson "Interests" or "Projects") and include:

-      Wallal West 1 Project (E45/5853) a granted exploration licence
which covers 96km(2);

-      Wallal West 2 Project (E45/5880) a granted exploration licence
covering 86km(2) and;

-      Braeside West Project (E45/5854) a granted exploration licence
covering 137km(2).

FDR UK acquired a 100% interest in FDR Australia on 29 October 2021 and the
announcement in respect of the acquisition may be viewed through the following
link:

https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248
(https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248)

The acquisition of Pardoo expedites the corporate restructuring of FDR UK, its
subsidiaries & interests and allows FDR UK to avoid a costly and
time-consuming inter-company transfer of strategically important exploration
licences which are now within the FDR UK group holding company structure.

Pardoo Acquisition Terms

For the acquisition of the entire share capital of Pardoo by FDR UK, the
consideration payable to the shareholders of Pardoo (the "Vendors") is as
follows:

-      FDR UK will pay consideration of AU$7,000 (£3,839) in cash

-      The Vendors will receive 300,000 new FDR UK Ordinary Shares at an
issue price of 6.67 pence per share (a value of £20,010 and post share issue
this represents 0.66% of FDR UK issued share capital).

The AU$7,000 cash payment is to cover costs associated with financial
accounting to prepare Pardoo for this transaction and on completion of the
acquisition Pardoo will carry no outstanding liabilities.

The Vendors and their professional licencing and geological teams will
continue to provide ongoing assistance and work with FDR UK post completion of
the acquisition.

Following completion of this transaction, Power Metal will hold 82.78% of FDR
UK.

In the nine months ended 30 April 2022 Pardoo had a net loss of AU$96 and at
30 April 2022 Pardoo had net assets of AU$4.

EXERCISE OF RIPON HILLS OPTION

Background

The original acquisition of FDR Australia was announced on 29 October 2021 and
this announcement may be viewed through the link below:

https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248
(https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248)

Option Exercise Terms

Within the above announcement were the terms for an option (the "Option") to
acquire the Ripon Hills Project ("Ripon Hills") and an extract covering this
is provided below:

"Ripon Hills E45/5088 Option

 

FDR UK may, at any time within 12 months of the date of signing of this
Agreement, acquire E45/5088 (Ripon Hills) with consideration comprising a
payment of A$20,000 (to be paid as 398,036 Power Metal Ordinary Shares at an
issue price of 2.75p and 398,036 Power Metal warrants at an exercise price of
4.5p and on the same basis as the Initial Consideration Warrants above) to
Great Sandy Pty Limited ("Great Sandy"), current holder of the licence. Upon
written notice of exercise and payment, Great Sandy will transfer E45/5088 to
RH Resources Pty Ltd (which will become a wholly owned subsidiary of FDR
Australia)."

 

Power Metal and FDR UK have now exercised the above Option and are working
with Great Sandy to complete relevant transfer documentation. As a result
Power Metal will issue Great Sandy 398,036 new ordinary shares of 0.1p each at
a price of 2.75p ("Ripon Hills Option Shares") and 398,036 Power Metal
Warrants at an exercise price of 4.5p.

 

The latest exploration update in respect of Ripon Hills may be reviewed in the
Company's announcement of 21 February 2022, including details of a desktop
review currently underway:

 

https://www.londonstockexchange.com/news-article/POW/replacement-paterson-project-exploration-update/15337136
(https://www.londonstockexchange.com/news-article/POW/replacement-paterson-project-exploration-update/15337136)

 

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

"It's great to be able to expedite the restructuring of the FDR UK interests
and saves us some time and cost.  This means we can move forward more
expeditiously with this exciting venture. We continue the administrative
processes for the planned listing of FDR UK on the UK capital markets."

Tristan Pottas Chief Executive Officer of First Development Resources Ltd
commented:

"Progress at First Development Resources continues, including exploration work
programmes and corporate activities in respect of the planned London listing
of FDR UK. We intend to push on at pace.

 From a corporate perspective, the acquisition of Pardoo announced today
enables us to further accelerate our business plans which is important.
Also, our work to date has demonstrated the potential opportunity offered by
Ripon Hills and we are delighted that the Option has been exercised."

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 398,036 Ripon Hills Option Shares to be
admitted to trading on AIM which is expected to occur on or around 18 May 2022
("Admission"). The Ripon Hills 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 1,469,667,740 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.

 

Power Metal Exploration Programmes Underway/Results Awaited

Power Metal has exploration programmes completed or underway, with results
awaited, as outlined below:

 

 Project                Location   POW %            Work Completed or Underway                                                    Results Awaited

 Alamo Gold Project     USA        Earn-in to 75%   Excavation of multiple test pits and mapping & sampling.                      Field and assay results from on-site work programme.
 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%  Soil & rock sampling completed                                                Technical Review of exploration results & define next exploration steps.
 Ditau Project          Botswana   50%              Drill programme focused on key targets notably drilling of potential          Field updates and receipt & review of laboratory assay results.
                                                    carbonatites and targeting rare-earth elements.
 Kalahari Copper Belt   Botswana   50%              Exploration programme underway across the South Ghanzi Project and further    Field programme findings and defined drill targets for near term drilling.
                                                    exploration at the more recently acquired South Ghanzi Extension and Mamuno
                                                    licence areas
 Molopo Farms           Botswana   53%              Review of recent exploration findings.                                        Determine next exploration steps and action plan.
 Haneti Project         Tanzania   35%              Diamond drill programme completed                                             Receipt & review of laboratory assay results.
 Victoria Goldfields    Australia  49.9%            Diamond drill programme underway                                              Field updates and receipt & review of laboratory assay results.

 Paterson Projects      Australia  83.33%           Wallal passive seismic and 2D seismic processing work programme completed.    Findings from multiple work programmes including final approvals and

                                                                             preparations for planned deep diamond drilling.
                                                    Review of historical data and target generation for Ripon Hills &
                                                    Braeside West projects.

 Selta Project          Australia  83.33%           Field reconnaissance work complete, which included mapping and sampling.      Finalising data review from field programmes.

 

 

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