REG - Power Metal - Merger Agreement - Wilan Project, South Australia

Power Metal ResourcesAnnouncement

15/12/2022 10:45

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RNS Number : 8575J  Power Metal Resources PLC  15 December 2022

15 December 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Merger Agreement - Wilan Project, South Australia

Power Metal Resources PLC (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio
announces a merger of its Wilan Project ("Wilan" or the "Project"), located in
South Australia, with a number of other Australian exploration interests (the
"Merger"). The Merger will create a new Australian exploration company and
provide Power Metal with exposure to the world class Mount Isa copper belt
located within Queensland, Australia

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

"Power Metal recognises the forward dynamic of copper as a commodity and the
Merger will provide the Company with an immediate equity exposure to a
strategic portfolio of exploration interests in the Mount Isa copper belt of
Queensland, Australia.

The Queensland Projects are targeting major copper discoveries within a world
class copper belt and are situated close to ground held by a number of
substantial mining companies."

 

HIGHLIGHTS

 

·    The Wilan Project is comprised of two exploration licences ("ELs")
which cover a total area of 1,994km(2), held within Power Metal Resources
Australia Pty Ltd ("POW Australia"), which is a wholly-owned subsidiary of
Power Metal Resources PLC.

·    A heads-of-terms agreement (the "Agreement") has been signed to
combine POW Australia (100% owner of the Wilan Project) with two companies
holding a 100% interest in a portfolio of two granted exploration licences and
four licence applications covering 1,507km(2) in the Mount Isa copper belt of
Queensland, Australia (the "Queensland Projects").

 

·    The Queensland Projects are held by two private Australian companies,
RAB Resources Pty Ltd ("RAB Resources" or "RAB") and New Horizon Metals Pty
Ltd ("New Horizon" or "NHM").

 

·    A new company ("NewCo") will acquire outright the shares in POW
Australia, RAB Resources and New Horizon (the "Merger Parties"). Following the
Merger Power Metal Resources plc will hold a 20% interest in NewCo.

 

·    POW Australia will be renamed Wilan Resources Pty Ltd shortly after
completion of the Merger, enabling Power to retain the POW Australia name.

 

·    Following the Merger, NewCo will then commence the process for a
planned listing targeting Q2 2023 or the acquisition of NewCo and its
interests from an existing listed vehicle, subject to agreement of all the
Merger parties.

·    Further information to follow with regard to the Merger progress
& structuring, planned listing and project level developments across the
combined project portfolio.

 

PROJECT MAPS

Project maps covering the Queensland Projects and Wilan Project licence
footprints are provided below and will be uploaded to the Power Metal website
in due course.

Fig. 1: Queensland Licence Footprint

 

 

 

Fig. 2 - Wilan Project Licence Footprint and Surrounding Area

 

TRANSACTION TERMS

 

NewCo will acquire 100% of the share capital of New Horizon, RAB Resources and
POW Australia and then hold the Queensland projects and the Wilan Project.

 

The NewCo ownership on completion of the Merger and grant of the New Horizon
licence applications below is outlined in the table below.

 

 Company Name   % of NewCo Issued Share Capital
 New Horizon    40%
 RAB Resources  40%
 POW Australia  20%
 Total          100%

 

The Merger Parties will appoint the board of NewCo and will each have a right
to nominate at least one board member.

Note: 20% of the NewCo shares will be issued to New Horizon immediately, with
the balancing 20% issued on the grant of the Copper Creek and Bortala licence
applications.  Should an acquisition of NewCo and/or its interests by an
existing listed vehicle complete prior to any planned listing (which may only
proceed with the agreement of all the Merger parties), then the remaining 20%
of NewCo shares would be automatically issued to New Horizon on completion.

PROJECT LICENCE OVERVIEW

RAB interests include:

Gregory River - East and West

Tenures Exploration for Minerals (EPM's) 28642 and 28643, the Gregory River
(East and West) Project, are exploration licences in application by RAB
Resources covering 169.6km(2) and 220.8km(2), respectively.

Gregory River East and West tenements are prospective for copper, gold, lead,
zinc, and cobalt.

Fiery Creek

Tenure EPM 27879 the Fiery Creek Project is a granted exploration licence held
outright by RAB Resources covering 320km(2) with an expiry date of
16/03/2027.  Fiery Creek is believed to be prospective for copper, gold,
lead, zinc, and cobalt.

Dynamite Creek

Tenure EPM 27870 the Dynamite Creek Project is a granted exploration licence
held outright by RAB Resources covering 288km(2) with an expiry date of
16/03/2027.  Dynamite Creek believed to be is prospective for copper, gold,
and cobalt.

NHM interests include:

Copper Creek

Tenure EPM 28272, the Copper Creek Project is an exploration licence in
application by New Horizon covering 195.2km(2) with a lodgement date of
31/1/2022.  Copper Creek is prospective for copper, cobalt, silver, uranium,
and rare earth elements.

Bortala

Tenure EPM 28271, the Bortala Project is an exploration licence in application
by New Horizon covering 313.6km(2) with a lodgement date of 31/1/2022.
Bortala is prospective for copper, cobalt, silver, lead, zinc, uranium, and
rare earth elements.

POW Australia interests include:

Wilan Project

The Wilan Project includes two granted exploration licences ("ELs") including
EL6819 and EL6870.

EL6819, is a granted exploration licence held outright by POW Australia
covering 999km(2) with an expiry date of 23/08/2028.

A desktop technical review completed over EL6819 identified an approximately 4
x 6km coincident magnetic and gravity geophysical anomaly located in the
southeastern part of the Project. Such coincident geophysical anomalies have
been noted as potential targets for iron oxide copper-gold mineralisation
("IOCG") elsewhere within the highly prospective Gawler Craton.

The Wilan Project also includes recently granted EL6870 which covers an area
of 995km(2) and lies to the northwest of EL6819 which carries an expiry date
of 10/11/2028.

Exploration targets within EL6870 include potential surficial lacustrine
uranium (U) and vanadium (V) mineralisation located within the western part of
the Project. The lacustrine targets were identified by recently completed
radiometric and hyperspectral analysis. In addition, within the northern part
of EL6870, multiple kimberlitic indicator minerals have been identified by a
previous operator, including occurrences of pyrope, kimberlitic ilmenite and
picroilmenite.

 

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 holds a number of priority exploration projects with active
exploration underway currently. The status of each project is outlined in the
table below:

 Project         Operations                                                                POW %   Project Status

 Athabasca       12 properties covering an area of 842km(2) in the Athabasca Basin region  100%    Exploration programmes undertaken across three properties during summer 2022

               Canada.                                                                           and preliminary planning for work in Spring/Summer 2023 is ongoing.
 Uranium

                                                                                                   Desktop review work ongoing across the existing portfolio and data rooms
                                                                                                   established for all the projects, to enable third party review of
                                                                                                   opportunities for potential acquisition, joint venture or earn-in.

                                                                                                   Ongoing review of new opportunities to further expand the Company's Athabasca
                                                                                                   uranium property exposure.
 Molopo Farms    3 prospecting licences covering 1,723km(2) in south-west Botswana         87.71%  Currently a 2,600m diamond drill programme is underway with a planned 5-6

                                                                                                 holes targeting four previously identified magnetic conductors prospective for
 Nickel - PGMs                                                                                     Nickel - Platinum Group Metals.

                                                                                                   2 drill holes at target conductor T1-6 and one at T1-14 have been completed
                                                                                                   and drilling at target T1-3 target is underway currently.

                                                                                                   Downhole geophysics completed at DDH1-6A and underway at DDH1-14B.

                                                                                                   Further Moving Loop Electro-Magnetic surveys are planned over additional
                                                                                                   Airborne Electro-Magnetic targets identified, to develop further drill
                                                                                                   targets.
 Tati Project    Botswana                                                                  100%    Reverse Circulation drilling and soil sampling confirmed high-grade and

                                                                                                 bonanza grade gold mineralisation within a gold-in-soil anomaly extending for
 Gold - Nickel                                                                                     8km across the Company's prospecting licences.

                                                                                                   Next stage exploration plans are currently being finalised and Power Metal are
                                                                                                   moving toward implementation in the near term.

                                                                                                   Sampling of fines dumps, representing waste material from the Cherished Hope
                                                                                                   gold mine on the project has confirmed circa 1g/t gold and suitability of the
                                                                                                   fines dumps for processing to extract gold and generate income.  Preparations
                                                                                                   for the fines dumps processing are advancing.

( )

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                          Operations                                                                Status                POW %      Further Information Link
 First Class Metals PLC           Exploration in the Schreiber-Hemlo region of Ontario, Canada              Listed Investment     27.91%     www.firstclassmetalsplc.com (http://www.firstclassmetalsplc.com)

 Kavango Resources PLC            Exploration in Botswana                                                   Listed Investment     9.85%      www.kavangoresources.com (http://www.kavangoresources.com)

 First Development Resources PLC  Exploration in Western Australia and the Northern Territory of Australia  Planned IPO           62.12%*    www.firstdevelopmentresources.com (http://www.firstdevelopmentresources.com)

 Golden Metal Resources PLC       Exploration and development in Nevada, USA                                Planned IPO           83.13%     www.goldenmetalresources.com (http://www.goldenmetalresources.com)

 New Ballarat Gold PLC            Exploration in the Victoria Goldfields of Australia                       Planned IPO           49.9%      New website under development which can be found at
                                                                                                                                             www.newballaratgoldcorp.com (http://www.newballaratgoldcorp.com) .

                                                                                                                                             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/) .
 NewCo                            Exploration in Queensland's Mount Isa copper belt and in South Australia  Planned IPO/Disposal  20%(^)     NewCo website under development.
 Uranium Energy Exploration PLC   Uranium exploration in the Athabasca region of Canada                     Planned IPO           50-55%(~)  www.uraniumenergyexploration.com (http://www.uraniumenergyexploration.com)

(^) subject to completion of Merger announced 14.12.22.

(~) subject to completion of disposal of Reitenbach and E-12 properties,
announced on 8.8.22 and 4.11.22, respectively.

(*) reducing to 58.59% on issue of equity for NSR buyout announced 5.12.22.

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