REG - Power Metal - Golden Metal Resources – Company Update

Power Metal ResourcesAnnouncement

16/02/2022 15:15

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RNS Number : 9071B  Power Metal Resources PLC  16 February 2022

16 February 2022

Power Metal Resources plc

("Power Metal" or the "Company")

Golden Metal Resources - Company Update

Major Progress Across Nevada-Based Tungsten, Gold, Copper, Silver Projects

Power Metal Resources PLC (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio,
announces a comprehensive update in respect of its majority-owned subsidiary
Golden Metal Resources Limited ("Golden Metal" or "GMT"), which is currently
seeking an independent listing on the London markets targeted for Q2 2022.

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

"The focus of Golden Metal remains the preparations for listing in London,
however it is important that steps are taken during the listing process to
prepare for proactive work streams following listing, notably meaningful
targeted exploration.

Our preparatory work has revealed positive findings with a growing target base
for potential resource expansion at Pilot Mountain Project and emboldening our
belief in the potential of Golconda, Garfield and Stonewall projects."

LATEST EXPLORATION HIGHLIGHTS:

 Project          Technical Findings
 Pilot Mountain   -      A comprehensive desktop analysis and subsequent report completed
                  by a highly experienced economic geologist identified several high-priority
                  tier 1 and tier 2 targets which have the potential to host significant new
                  discoveries of tungsten-copper-silver skarn type mineralisation.

                  -      GMT has received a competitive proposal from a Vancouver based
                  geophysics company to undertake a property wide high-resolution ground 3D
                  induced polarisation ("IP") and magnetic geophysics survey.

                  -      GMT is in the final stages of selecting its drilling contractor
                  which will be responsible for the planned 2022 drilling campaign, which will
                  be the first drilling programme since 2018 at Pilot Mountain.

                  -      GMT has appointed a drill management services company which has
                  significant previous experience on the Project.
 Golconda Summit  -      GMT has engaged an ex-Newmont senior geologist (the "Geologist")
                  who has worked extensively on the nearby Lone Tree Complex mine. The Geologist
                  will oversee and manage exploration on GMT's carlin-type Golconda Summit
                  Project and is currently undertaking a detailed historic data analysis.

                  -      Preliminary on-site investigations have identified multiple
                  geological similarities between the nearby Pinson and Preble gold mines and
                  Golconda Summit.
 Garfield         -      GMT has received a competitive proposal from one of Nevada's
                  leading all-service exploration companies to undertake a soil geochemical
                  sampling survey which will cover the entire Garfield Project as well as
                  various nearby high-priority expansion targets.
 Stonewall        -      A comprehensive desktop analysis and subsequent report completed
                  by a highly experienced economic geologist identified two high-priority zones
                  along the Stonewall vein which have never been drill tested: a zone of
                  'horsetailing' quartz-calcite veins at the easternmost vein segment; and a
                  zone of northwest trending carbonate-rich veins at the western end of the
                  Stonewall vein. These two underexplored zones have been prioritised for future
                  work programmes.

                  -      In order to better cover these segments of the vein, as well as
                  multiple historic mine adits and shafts discovered southwest of the Stonewall
                  vein, GMT is in the process of staking an additional 11 Lode Mining Claims.

 

COMMERCIAL HIGHLIGHTS

-      Golden Metal's progress towards a listing in London continues at
pace with weekly board and advisory meetings, undertaken to ensure the various
parties involved with the listing process are well aligned and working
coherently.

 

-      Golden Metal has received an advance draft of the Competent
Person's Report from SRK Exploration Services Ltd., a world leading
exploration consultancy (and part of the SRK Group) based in Cardiff, United
Kingdom. The report has been forwarded to GMT's various advisors for inclusion
into the listing documents.

 

-      GMT remains well funded after the pre-initial public offering
("pre-IPO") placement of £750,000, which was announced on 9 December 2021.
The financing was completed at a pre-money valuation of £3.25million and
included participation by various Golden Metal board members.

 

DETAILED PROJECT SPECIFIC UPDATES

Key: Gold "Au", Silver "Ag", Tungsten  Trioxide  "WO(3)", Zinc "Zn", Copper
"Cu"

Pilot Mountain

The Pilot Mountain tungsten-copper-silver-zinc Project ("Pilot Mountain") is
100% owned by Golden Metal. The details of the acquisition can be found at the
link below:

https://www.londonstockexchange.com/news-article/POW/strategic-option-agreement-pilot-mountain-nevada/15117136
(https://www.londonstockexchange.com/news-article/POW/strategic-option-agreement-pilot-mountain-nevada/15117136)

The Company believes that Pilot Mountain represents a strategic asset for
Golden Metal as it hosts a robust Mineral Resource Estimate ("MRE") of 12.53Mt
at 0.27% W0(3) with significant Cu-Ag-Zn credits.(1) Tungsten was added to the
2020 United States Geological Survey ("USGS") Critical Minerals List - a list
of 50 non-fuel mineral or mineral materials deemed essential to the economic
or national security of the USA; there is currently no known domestic
production of tungsten within the USA.(2) Golden Metal has officially adopted
the reclassification to a MRE, which is better aligned with Golden Metal's
intention to complete any future resource updates in line with Canadian
Institute of Mining Metallurgy and Petroleum ("CIM") Definition Standards for
Mineral Resources and Mineral Reserves as referenced in the Canadian NI43-101
technical reporting requirements, which is consistent with the majority of
mineral projects located within North America. In addition, Power Metal
recently announced the execution of a variation agreement on 24 January 2022,
enabling it to secure early clearance from the underlying tail benefit which
would have been payable upon Golden Metal publishing a CIM (NI43-101) or JORC
compliant Mineral Resource at Pilot Mountain which increased current declared
resource levels by 25%.

On the back of surging global energy and transportation costs, the price of
tungsten has risen >45% since January 2021, from $228 USD/mtu (metric tonne
unit) to over US$335 USD/mtu.(3)

Since acquiring Pilot Mountain, Golden Metal has undertaken extensive
preparatory work which will allow implementation of its focused exploration
strategy on the project post-listing. The highlights of this work include:

1)    The completion of a comprehensive desktop analysis and subsequent
report by a highly experienced economic geologist with abundant tungsten-skarn
deposit type experience. The report identified at least four distinct areas
which have the potential for significant new discoveries of tungsten-skarn
mineralisation including:

a.    Beneath post-mineral sedimentary and volcanic cover in the Good Hope
Zone target area - looking for the easterly continuation of the
Gunmetal-Greasewood Spring ridge of exposed quartz monzonites.

b.    In the Juniper target area - looking for a small intrusive stock
juxtaposed against carbonate rocks similar to the Desert Scheelite area.

c.     In the Greasewood Springs target area - looking for the easterly
continuation of the Gunmetal Zone under post-mineral sedimentary and volcanic
cover.

d.    Desert Scheelite West target area - looking for the continuation of
an east-west swarm of faults associated with the Desert Scheelite
mineralisation.

 

2)    Golden Metal intends to complete a high-resolution, property-wide,
ground-based magnetics and 3D induced polarization ("IP") geophysics surveys
across the Pilot Mountain Project. This work will be crucial for better
modelling the blind target areas that are perceived to host the extensions of
tungsten-skarn mineralisation from known deposit areas. A small 2012 IP survey
identified a large chargeability anomaly southeast of the Desert Scheelite
deposit - which has never been tested. The 2022 work will build on this
earlier work, as well as cover high priority zones on the project that have
never been explored or drill tested. Golden Metal has received a competitive
quote from a Vancouver, Canada, based geophysical firm which has abundant
experience in western USA. By employing a Canadian based firm, Golden Metal
will be able to cost-effectively carry out these crucial property-wide surveys
due to favorable currency exchange rates.

 

3)    Golden Metal has also begun various drilling preparations in line
with its intentions to undertake a Phase I drilling campaign during summer
2022 - the first on the Project since 2018. A drill management service company
has been contracted, a group which has extensive experience and knowledge of
the Project. Drilling contacts are now being reviewed and Golden Metal expects
to award the drilling contract within the coming weeks.

 

Golconda Summit

Golden Metal has the option to earn 100% of the Golconda Summit Carlin-type
gold Project which is located 15km east of Winnemucca, Nevada, USA, at the
confluence of the prolific Battle Mountain-Eureka and Getchell trends.  The
details of the transaction can be found at the link below:

https://www.londonstockexchange.com/news-article/POW/agreement-golconda-gold-property-nevada-usa/14998042
(https://www.londonstockexchange.com/news-article/POW/agreement-golconda-gold-property-nevada-usa/14998042)

The project is underlain by a thrust faulted Palaeozoic sedimentary package
which has been transported eastward to its present day location along the
major Golconda Thrust fault. The preserved stratigraphic section includes the
Antler Peak Limestone, Edna Mountain Formation and the Preble Formation
(collectively "lower thrust plate rocks"), which are structurally capped by
the Havallah Sequence ("upper thrust plate rocks"). Previous work has been
primarily focused on surface anomalies within the overlying upper thrust plate
rocks, which are not a known host of Carlin-type mineralisation within Nevada.
Despite this, previous work by Nerco Mineral Company in 1989 encountered
significant gold mineralisation within upper thrust plate rocks.

Since acquiring the asset, Golden Metal has successfully obtained trenching
permits from the United States Bureau of Land Management ("BLM"). Other recent
highlight developments include:

1)    Golden Metal has engaged an ex-Newmont senior geologist who has
almost 10 years of work experience at the nearby, Carlin-type gold Lone Tree
Complex Mine. The Geologist is currently reviewing all available historical
information on the project and has completed multiple site visits. Preliminary
analysis of road cuts immediately west of the project, which have exposed
sections of alteration and mineralisation within various lower plate rock
units, are showing geological similarities to the nearby Pinson and Preble
gold mines.

 

2)    Various work programmes are being planned post-listing, the details
of which will be finalised within the coming weeks in conjunction with the
Geologist. Golden Metal has already begun initial preparations with various
service companies who could assist with any of the contemplated work
programmes, which may include geophysics and geochemical surveys.

Garfield

The Garfield copper-silver-gold project is 100% owned by Golden Metal. The
details of the transaction can be found at the link below:

https://www.londonstockexchange.com/news-article/POW/acquisition-of-gold-copper-projects-nevada-usa/15020989
(https://www.londonstockexchange.com/news-article/POW/acquisition-of-gold-copper-projects-nevada-usa/15020989)

Since acquiring the asset Golden Metal undertook a Remote Sensing study
including the analysis of Advanced Spaceborne Thermal Emission and Reflection
Radiometer ("ASTER") and European Space Agency Sentinel-2 datasets. Positive
results generated by the programme led to the staking of additional claims.
The details of the work programme are highlighted at the link below:

https://www.londonstockexchange.com/news-article/POW/new-copper-anomalies-identified-garfield-nevada/15175582
(https://www.londonstockexchange.com/news-article/POW/new-copper-anomalies-identified-garfield-nevada/15175582)

Following the successful results generated, Golden Metal has undertaken a
thorough review of all historic data available. As a result of the analysis
completed, Golden Metal has developed an exploration strategy for the project
going forward post listing which will include:

1)    A leading Nevada based geological services company has provided
Golden Metal with a proposal for a geochemical soil survey consisting of 802
total samples collected at 200m x 200m spacing. Several other high-priority
copper anomalies identified by the Remote Sensing Study will be the target of
this geochemical survey - along with multiple other historic mines and copper
occurrences identified in various USGS datasets.

 

2)    Various geophysical surveys are also being contemplated, as no known
modern geophysic survey has been completed near to, or over the project.
Geophysics, in conjunction with the planned geochemical surveys will allow
Golden Metal to position the project as a more regional skarn-style
exploration proposition with increased discovery potential.

 

Stonewall

The Stonewall gold-silver project is 100% owned by Golden Metal. The details
of the transaction can be found at the link below:

https://www.londonstockexchange.com/news-article/POW/acquisition-of-gold-copper-projects-nevada-usa/15020989
(https://www.londonstockexchange.com/news-article/POW/acquisition-of-gold-copper-projects-nevada-usa/15020989)

The focus of the Stonewall gold-silver project is a >1.2km long
Au/Ag-bearing low sulphidation epithermal vein & stockwork system on the
northern side of Stonewall Mountain within the prolific Walker Lane Mineral
Belt. International Minerals Corp the most recent project operator who
undertook drilling at Stonewall, targeted less than 400m of the exposed
>1,200m of strike length along the Stonewall vein. Drill pads were chosen
within this limited section primarily because of accessibility of flat ground
where drill pads could be excavated in a time efficient manner.

Golden Metal contracted a highly experienced economic geologist to undertake a
comprehensive historical data analysis on the project, with the goal of
helping direct future exploration initiatives on the project post listing. The
recent report commissioned, concluded that the structurally complex
"horsetailed" segments at the eastern end of the vein are probably dilational
sites which are favourable hosts for epithermal Au-Ag mineralisation.

Additionally, he determined that the carbonate-rich northwest trending veins
at the western end of the vein system have not been unroofed, representing a
compelling underexplored exploration target. He concluded that there remains
significant potential for locating shoots of bonanza grade Au-Ag at the
Stonewall Project. Based on the project analysis completed by Golden Metal to
date, additional steps have been taken which include:

1)    Lode Mining Claim staking is currently in progress for a further 11
claims covering ground proximal to these newly identified exploration targets,
as well as multiple historical mine adits and shafts which were located
southwest of the project and where records obtained by the Company show that
hand-sorted shipments of high-grade gold-silver were made in the early 1900s.

 

Conclusion

In conclusion, Golden Metal has several exciting exploration initiatives that
are currently progressing or being planned across the portfolio. Whilst the
listing process is ongoing, additional preparatory and desktop analysis will
continue at pace in order to give GMT the best chance of success post listing.
Significant exploration news flow, including planned drilling programmes at
Pilot Mountain and Golconda, as well as high-impact grassroots geochemical and
geophysics programmes at Stonewall and Garfield, will act as catalysts for the
company post completion of its initial public offering.

 

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 Notes:

1                  https://www.thormining.com/sites/thormining/media/pdf/asx-announcements/20182019/20181214-pilot-mountain-resource-update.pdf

 

2                  https://pubs.usgs.gov/periodicals/mcs2020/mcs2020.pdf

 

3                  Price retrieved from Bloomberg L.P Stock
Price Graph for Tungsten.

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 (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.
 Authier North Lithium       Canada     Earn-in to 100%  Soil & rock sampling completed                                                Laboratory assay results of samples collected
 Ditau Project               Botswana   50%              Preparatory exploration work underway on target I10 leading to planned        Field programme findings and defined drill targets for near term drilling.
                                                         accelerated drilling targeting rare-earth elements and base metals

 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%(A)           Kavango Option to acquire an interest in local project holding company.       Results from various work activities underway as part of the Kavango Option
                                                         Option fee payable through defined work programme
 Tati Gold/Nickel            Botswana   100%             Reverse circulation drill programme completed                                 Laboratory assay results awaited
 Haneti Project              Tanzania   35%              Diamond drill programme underway                                              Results from field programme including drill programme underway
 Victoria Goldfields         Australia  49.9%            Ongoing exploration across +1500km(2) of granted exploration licences         Results from field programme including drill programme underway

 Wallal Gold/Copper Project  Australia  83.33%(B)        Passive seismic and 2D seismic processing work programme completed.           Results awaited

                                                         Ground reconnaissance work underway.

(A) should Kavango exercise their option to acquire Kalahari Key, Power Metal
interest would reduce to 40% of the Molopo Farms Complex project

(B) assuming all licences held by URE Metals Pty Limited are granted as
outlined in the Company's announcement of 19.11.21 resulting in the issue of
First Development Resources Ltd shares to URE vendors

 

 

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