REG - Power Metal - Quarterly Business Update
27/07/2022 10:00
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RNS Number : 9183T Power Metal Resources PLC 27 July 2022
27 July 2022
Power Metal Resources plc
("Power Metal" or the "Company")
Quarterly Business Update
Power Metal Resources PLC (LON:POW) the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio
announces the quarterly business update for shareholders.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc, commented:
"First Class Metals, into which we sold our Schreiber-Hemlo interests is
nearing its planned listing; we recently conditionally disposed of our stake
in the Botswana Kanye JV to our partner Kavango Resources; and we have Golden
Metal Resources (Nevada, USA focused) nearing completion of its IPO
preparations, with First Development Resources' planned listing process
(Australia focused) well underway. We expect more crystallisation events to
occur from our still extensive portfolio.
Crystallisation of value into strategic investments bolsters our balance sheet
considerably and offers the potential for considerable capital gains,
alongside providing a major pool of available working capital to the
Company. However, what enthuses us even more is the future direction of the
Company and the exploration potential offered from within our retained
portfolio.
We would reinforce our commitment to growing a uranium focus in the Company,
with the energy metal slated for a continuing resurgence as the world
continues in its journey towards significantly increased reliance on nuclear
power generation. Going forward, we will also focus our energy and resources
on the more rapid advancement of certain retained exploration projects,
including notably our two remaining Botswana interests in the Molopo Farms
Complex and Tati Greenstone Belt projects."
GUIDANCE FOR READERS
The tables below include the latest position of each project and our
operational plans over the course of the next three months.
Projects are grouped into the following categories to provide additional
clarity to investors on the project status and near term plans:
- Priority exploration projects
- Project disposals or IPO processes underway
- Projects with next steps to be determined pending receipt of
further information
Below the project tables, additional information is provided covering new
opportunities, business management, finance and compliance.
Readers are also encouraged to review Power Metal's corporate website and
presentation which are regularly updated and are available through the
following links:
Website: www.powermetalresources.com (http://www.powermetalresources.com)
Corporate Presentation: https://www.powermetalresources.com/presentation/
(https://www.powermetalresources.com/presentation/)
PRIORITY EXPLORATION PROJECTS
Project Latest Position & Forward Plans
Athabasca Uranium
Saskatchewan, Canada Power Metal currently holds 7 properties with 3 newly acquired properties to
be transferred to it, as announced 26 July 2022 and which together cover
(Uranium) 721km(2) surrounding the Athabasca Basin.
POW 100%
Detailed data compilation has been completed and external datarooms opened for
third parties in respect of 7 properties. We have completed hyperspectral data
analysis over 4 properties with the findings leading to the planned launch of
ground exploration at those properties shortly.
In addition to exploration of retained uranium projects, the Company is
working on corporate options in relation to certain of its Athabasca uranium
interests.
Authier North
Quebec, Canada The Company continues to monitor progress being made by Sayona Mining (ASX:
SYA) who control the neighbouring Authier Lithium Project.
(Lithium)
POW earn-in to 100%
On 12 July 2022 Power Metal announced the decision to proceed into year 2 of
the earn-in to a 100% interest in Authier North.
Ground exploration plans are being finalised with work expected to commence
this quarter.
Molopo Farms Complex Project Power Metal secured a conditional agreement to acquire an additional 58.7% of
shares in project partner Kalahari Key Mineral Exploration Pty Limited
Botswana ("KKME") as announced on 18 July 2022:
(Nickel - Copper - Platinum Group Element) https://www.londonstockexchange.com/news-article/POW/kalahari-key-botswana-acquisition/15458701
(https://www.londonstockexchange.com/news-article/POW/kalahari-key-botswana-acquisition/15458701)
POW: Effective Economic Interest is currently 52.6% increasing to 87.71%
subject to completion of the KKME shares acquisition & restructuring This acquisition, conditional on regulatory approval, will see Power Metal
announced 18.5.22. holding 87.71% of KKME which will hold 100% of the Molopo Farms Complex
Project ("Molopo Farms").
The next step is diamond drilling to follow up on the discovery of nickel
sulphides in the first drill campaign and seeking an economic and large-scale
discovery.
Planning is underway now for this next drill programme which, subject to
completion of the agreement to acquire an additional 58.7% of shares in KKME,
we expect to commence in the autumn.
Simultaneously, we have prepared and opened a Molopo Farms dataroom providing
all project information for interested third parties to review. All such
engagements will be under non-disclosure arrangements at this time.
Tati Project
Botswana The Company announced the results from a maiden drill programme at the Tati
Project on 4 April 2022 and this may be viewed through the following link:
(Gold - Nickel)
POW: 100%
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-drill-programme-results/15396365
(https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-drill-programme-results/15396365)
Drilling confirmed 3 metres of 5.17g/t gold from 9 metres downhole,
representing shallow gold mineralisation. Analysis led to additional gold
prospective ground being covered by a new prospecting licence ("PL")
application, which was granted in April 2022 as announced to the market:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-new-licence-granted/15422038
(https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-new-licence-granted/15422038)
Recently the Company's technical team visited the new PL to conduct site
inspections and mapping, confirming extensive historical gold workings at the
Cherished Hope gold mine as well as large fines dumps which may be capable of
near-term revenue generation through toll processing of gold:
https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-exploration-update/15543783
(https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-exploration-update/15543783)
As a result of the findings from the site visit undertaken, we have expedited
plans including further volumentric analysis and gold sampling of fines dumps
and a reverse circulation ("RC") drill programme is expected to commence in
September/October of this year.
PROJECT DISPOSALS OR IPO PROCESSES UNDERWAY
Note: other project packages within the Power Metal portfolio are also in
earlier stages of spin-out preparations in addition to those listed below.
Project Latest Position
Kanye Resources On 8 July 2022 Power Metal announced the conditional disposal of its Kanye
Resources interest to its joint-venture partner Kavango Resources plc
Conditional Disposal to Kavango Resources (LON:KAV)("Kavango").
The disposal is subject to the publication of a prospectus by Kavango
including provision for the transaction.
Full terms and disposal consideration payable to Power Metal may be viewed in
the announcement linked below:
https://www.londonstockexchange.com/news-article/POW/conditional-disposal-of-kanye-resources-interests/15532470
(https://www.londonstockexchange.com/news-article/POW/conditional-disposal-of-kanye-resources-interests/15532470)
First Class Metals PLC (FCM) Power Metal currently has an interest of 36.3% in FCM following the FCM
pre-IPO financing which raised £486,000 in 2021. FCM is seeking a listing on
Schreiber-Hemlo, Ontario, Canada the London capital markets which is expected to occur shortly.
(Gold - Base Metals) First Class Metals has 100% ownership of 7 claim blocks covering over 180km²
in the Hemlo - Schreiber greenstone belt of Ontario, Canada.
POW c.36%
The North Hemlo flagship property covers over 90km(2) and sits just north of
Barrick Gold Corp's Hemlo gold mine. The North Hemlo property has abundant
showings of gold/copper/zinc/nickel.
In the east of the North Hemlo property sits the Pickle Lake joint venture
with Palladium One (TSX:PDM) which is the subject of a current drill programme
focussing on nickel/copper targets.
Golden Metal Resources PLC (GMR) Power Metal provided a Golden Metal Resources ("Golden Metal") company update
on 19 July 2022 which may be viewed below:
Nevada, USA
https://www.londonstockexchange.com/news-article/POW/golden-metal-resources-company-update/15547371
Gold - Base Metals (https://www.londonstockexchange.com/news-article/POW/golden-metal-resources-company-update/15547371)
POW 83.13% Following the pre-IPO financing which raised £750,000 in late 2021
preparation for the planned listing of Golden Metal is near to completion and
this will lead into the IPO financing, and subject to regulatory approvals, a
planned listing on the London capital markets expected to occur this quarter.
Golden Metal is active from an exploration perspective with an induced
polarisation ("IP") survey underway over the Pilot Mountain project and a
high-resolution soil geochemical survey active across the Garfield project.
First Development Resources Ltd (FDR) FDR has undertaken multiple exploration and corporate work streams in recent
months.
Western Australia
A detailed company update will be released to the market shortly providing an
(Gold - Copper - Rare Earth Elements - Uranium - Lithium) update which will cover:
POW: 62.12% - Final preparations for the Wallal project diamond drill
programme
- Exploration findings from the Braeside West, Ripon Hills and
Selta projects
- Update with regard to the planned listing process now fully
underway following the completion of a £1.125m pre-IPO financing as announced
in June 2022.
New Ballarat Gold Corporation PLC (NBCG) Through its Australian operating subsidiary, Red Rock Australasia Pty Ltd,
NBGC has a substantial licence footprint within the Victoria Goldfields,
Victoria, Australia Australia. This comprises 14 granted exploration licences covering
1,832km(2) and 5 licence applications covering 493km(2).
(Gold)
A planned listing of NBGC has taken longer than anticipated but remains the
POW: 49.9% 50.1% JV Partner Red Rock Resources PLC LON:RRR) focus of the company with a potential planned listing in the London or
Australian capital markets later this year.
Much work has been undertaken recently to advance the licences held in NBGC
including continuing exploration work by our in-country operational team. Also
through the advancement of licence applications into granted status, which has
now been achieved for 79% of the application footprint.
Recent licence grants include EL007330 located northeast of Ballarat and this
newly granted licence covers the Ajax gold mine which historically produced
312,789oz gold at an average grade of 14.8g/t Au in the 1920s ("Ajax").
Further information in our announcement of 24 May 2022:
https://www.londonstockexchange.com/news-article/POW/victorian-gold-fields-grant-of-key-licences/15465313
(https://www.londonstockexchange.com/news-article/POW/victorian-gold-fields-grant-of-key-licences/15465313)
The addition of the Ajax gold mine above was further supplemented by a
transaction to acquire EL5535 which covers the historical Berringa gold mine
just west of Ballarat which has historical production of 293,250 ounces of
gold from 1898-1952, at an average grade of 8.3g/t ("Berringa"). Further
information in our announcement of 6 July 2022:
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)
The mined sections of the Ajax and Berringa trends are thought by RRAL to be
among the top half dozen historic underground gold mines of Victoria and
contain significant exploration targets. Both mine areas are within 30km of
existing and not fully utilised treatment plants.
Work is currently being undertaken to better understand historical mining
activities, residual gold resource potential and drill targets at both Ajax
and Berringa, with a view to diamond drilling later this year.
This work is being undertaken alongside various work streams in respect of the
planned listing.
PROJECTS WITH NEXT STEPS TO BE DETERMINED
Project Latest Position & Key Forward Events
Alamo Gold Project
Arizona, USA Various technical reports have now been received and reviewed following work
undertaken at the Alamo gold project in Arizona.
(Gold)
POW: Earn-in to 75%
The findings are inconclusive to date and require additional work to be
undertaken to further the technical understanding of the project's potential.
We are working with our partners in Arizona to review the technical work
required and the costs attaching. We are also looking at the earn-in which
may need to be restructured given the findings thus far.
Gawler Project The Gawler Project comprises two licence applications (submitted October 2021
and covering 1,994km(2)) details of which may be viewed through the following
South Australia link:
(Gold, Copper) https://www.londonstockexchange.com/news-article/POW/new-australia-copper-gold-opportunity/15189456
(https://www.londonstockexchange.com/news-article/POW/new-australia-copper-gold-opportunity/15189456)
POW: 100%
Recently Power Metal Resources Australia Pty Limited, Power Metal's wholly
owned operating company, was advised that the Department of Energy and Mining
("DEM") proposed granting of one licence application ELA2021/00163 (999km(2))
for a period of 6 years. The initial expenditure commitment for the licence
is AUD$100,000 in total over 2 years, and Power Metal has paid AUD$23,055.10
in respect of first year rent and administration fees to the DEM. The
Company now awaits final regulatory sign-off and release of granted licence
documentation.
Internal technical review by the Power Metal team has been undertaken and an
initial exploration programme is being finalised in preparation for the launch
of ground exploration following receipt of the granted licence documentation.
Power Metal awaits progress with regard to the granting of ELA2021/00162
(995km(2)) and will similarly launch planned ground exploration subject to
the granting of the licence.
Haneti Project
Tanzania Drill results were announced for the Haneti Project in May 2022. Drilling
identified the targeted nickel, but not in economically significant
(Polymetallic) intersections. The technical results from the programme are expected to lead
to further target development at Haneti for ongoing exploration.
POW: 35% (65% JV Partner Katoro Gold plc LON:KAT)
In addition data from the programme is now being made available to third
parties previously interested in the Haneti project, to augment information
previously supplied up to Q1 2020.
Power Metal is keen to progress the Haneti project through further targeted
exploration and/or corporate activity.
Silver Peak Project Liaison with our Canadian partner to finalise commercial initiatives for the
project continue. An important next step is a planned site visit which is
British Columbia, Canada scheduled for early August 2022, which is expected to assist expediting
matters.
(Silver)
POW: 30%
NEW OPPORTUNITIES
Project Latest Position
Power Metal Resources plc The near-term focus will remain on the exploration of existing interests and
the crystallisation of value through the potential listing of spin-out
vehicles and project value generative disposals.
The primary acquisition focus for the foreseeable future is uranium projects,
however the Company does not rule out other acquisitions of exceptional
opportunities.
Power Capital Investments Limited Power Capital Investments ("Power Capital") continues to work on a number of
initiatives targeting individual or smaller corporate owned opportunities.
Global Resource Project Incubator
This is occurring against a backdrop of intensive activity across the Power
(Multi-Commodity) Metal business and will for now remain a modest source of activity as we seek
to advance our major business interests.
POW: 100%
MANAGEMENT - FINANCIAL - COMPLIANCE
Project Latest Position
Board The Board currently comprises:
Scott Richardson Brown - Interim Non-executive Chairman
Paul Johnson - Chief Executive Officer
Ed Shaw - Non-executive Director
Power Metal has been engaging with a number of potential board candidates for
Power Metal and associated companies.
We have successfully secured full boards for Golden Metal and First
Development Resources in advance of their planned listings.
For Power Metal we are undertaking due diligence on new candidates and hope to
be in a position to announce new appointments in the near term.
Management and Team Power Metal has built a strong operational team which along with the board now
comprises ten team members based out of our UK office.
We work extensively overseas and have developed equally strong operational
partnerships in countries around the world, forming an efficient and cost
effective hub-and-spoke operational model.
Power Metal is actively seeking to bring new team members in to support the
growth in business and we continue to invite talented individuals from all
backgrounds who feel they can contribute to our work to reach out and contact
us through the following link:
https://www.powermetalresources.com/join-us/
(https://www.powermetalresources.com/join-us/)
Financial Position Working Capital
Working capital comprises cash and listed investments ("Working Capital").
As at 26/07/22 Working Capital amounted to £1.88m. This is available for
payment of corporate costs and exploration expenditure across business
operations.
Pre-IPO Vehicles
Power Metal has holdings in three current vehicles undertaking a planned IPO
which, valued at the historical pre-IPO valuation level, amount to a total
value of £6.92m as per the table below:
POW Holding at Pre-IPO Valuation £
First Class Metals 1,028,766
Golden Metal Resources 3,325,000
First Development Resources 2,562,500
Total 6,916,266
In addition, Power Metal is seeking with JV partners (Red Rock Resources PLC)
to undertake a listing of NBGC, the pre-IPO valuation of which is not
confirmed at the current time.
The listing of further project packages may be undertaken which will be
incorporated into the above list in due course.
Project Investments & Intercompany Loans
As at 30/06/2022 Power Metal's remaining assets comprising project investments
and intercompany loans, amounting to £5.08m.
Future Financing Sources
The Company has multiple sources of additional financing, not all of which may
be necessary or occur in the foreseeable future:
- As an AIM listed vehicle traditional equity financing can be
undertaken to raise additional sums where considered necessary.
- Through the exercise of financing and transactional warrants or
the exercise of director, team member or adviser options. A full breakdown of
all warrants and options outstanding is available on the Company's website
through the following link:
https://www.powermetalresources.com/warrants-options-outstanding/
- In addition to the above, the Company will benefit from the
planned listings of the pre-IPO vehicles as outlined above which will, if
successful and in line with expected valuations on listing, add considerably
to overall Power Metal asset value.
- It is anticipated that further value generative events may occur
including additional spin-outs into new listed vehicles and outright disposal
of certain business interests.
Audit and Compliance Power Metal with the support of One Advisory, completed its interim results
for the half year ended 31 March 2022, which in line with best practice were
reviewed for comment by the Company's auditors PKF. The interim results were
published on 27 June 2022.
The Company's year end is 30 September 2022 and it is expected that the
audited financial accounts for the full year will be published in February
2023.
Power Metal is now well advanced with preparation of a new environmental,
social and governance ("ESG") initiative which will include:
- Appointment of an ESG Officer for Power Metal and all associated
companies.
- Design, implementation of new and wide ranging ESG policies
across the Company and embedded at local project or investment level for all
Company activities.
Training of all staff members to develop Company-wide core ESG understanding,
with in-depth training where required to maintain optimal ESG capability at
all levels.
A separate ESG dedicated announcement will be published by the Company in due
course.
In addition, Power Metal is seeking with JV partners (Red Rock Resources PLC)
to undertake a listing of NBGC, the pre-IPO valuation of which is not
confirmed at the current time.
The listing of further project packages may be undertaken which will be
incorporated into the above list in due course.
Project Investments & Intercompany Loans
As at 30/06/2022 Power Metal's remaining assets comprising project investments
and intercompany loans, amounting to £5.08m.
Future Financing Sources
The Company has multiple sources of additional financing, not all of which may
be necessary or occur in the foreseeable future:
- As an AIM listed vehicle traditional equity financing can be
undertaken to raise additional sums where considered necessary.
- Through the exercise of financing and transactional warrants or
the exercise of director, team member or adviser options. A full breakdown of
all warrants and options outstanding is available on the Company's website
through the following link:
https://www.powermetalresources.com/warrants-options-outstanding/
- In addition to the above, the Company will benefit from the
planned listings of the pre-IPO vehicles as outlined above which will, if
successful and in line with expected valuations on listing, add considerably
to overall Power Metal asset value.
- It is anticipated that further value generative events may occur
including additional spin-outs into new listed vehicles and outright disposal
of certain business interests.
Audit and Compliance
Power Metal with the support of One Advisory, completed its interim results
for the half year ended 31 March 2022, which in line with best practice were
reviewed for comment by the Company's auditors PKF. The interim results were
published on 27 June 2022.
The Company's year end is 30 September 2022 and it is expected that the
audited financial accounts for the full year will be published in February
2023.
Power Metal is now well advanced with preparation of a new environmental,
social and governance ("ESG") initiative which will include:
- Appointment of an ESG Officer for Power Metal and all associated
companies.
- Design, implementation of new and wide ranging ESG policies
across the Company and embedded at local project or investment level for all
Company activities.
Training of all staff members to develop Company-wide core ESG understanding,
with in-depth training where required to maintain optimal ESG capability at
all levels.
A separate ESG dedicated announcement will be published by the Company in due
course.
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 %
Athabasca Uranium Canada 100% Hyperspectral data analysis conducted across all 7 properties. Updating to 7 Finalise review of data from 3 properties. Prepare for summer exploration
data rooms for third party review. programme across 4 properties.
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.
Tati Project Botswana 100% Site visit with mapping of gold workings and mine dumps. Exploration planning underway including further mapping, sampling and launch
of an RC drill programme.
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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