REG - Power Metal Res. - Commercial Update

Power Metal ResourcesAnnouncement

24/07/2023 07:00

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RNS Number : 8815G  Power Metal Resources PLC  24 July 2023

24 July 2023

Power Metal Resources PLC

("Power Metal" or the "Company")

Commercial Update

 

Power Metal Resources PLC (AIM:POW), the AIM listed metals exploration and
development company, is pleased to provide a commercial update covering a
number of corporate initiatives currently underway and to also provide a
financial update with the latest available unaudited Gross Asset and
Shareholders' Equity position of the Company as at 30 June 2023.

Highlights:

·    Multiple corporate initiatives underway to optimise Power Metal's
positioning ahead of a resource sector recovery with work advancing
concurrently across various business interests.

·    Accelerated exploration underway across the Company's Athabasca
uranium interests in Saskatchewan, Canada and the Tati Goldfields project in
Botswana.

·    Intention to apply for OTC listing for easier trading of Power Metal
shares on market by US investors.

·    Appointment of Financial Adviser to Uranium Energy Exploration for
their planned listing, the Company's first uranium project spin-out listing.

·    Significant increase in Gross Assets and Shareholders' Equity since
30 September 2020 year end, in absolute terms and also per issued share,
demonstrating that Power Metal has been generating value per share
notwithstanding share dilution over the period.

 

Sean Wade, Chief Executive Officer of Power Metal Resources plc, commented:

"I am very pleased to be able to update shareholders on these important
developments. We are well aware of the challenging market conditions of late,
and as such, it is important for us to demonstrate to shareholders that
significant steps are being taken to position the Company in readiness for
what we expect will be a considerable recovery in the junior resource sector.

"The planned application for an OTC listing will give us the opportunity to
address a much wider international investor base and therefore substantially
improve liquidity in the shares. We want to make it as easy as possible for
people to invest and this is a significant step forward in that regard.

"We see significant potential demand for a pure-play uranium exploration
vehicle and look forward to the planned listing of Uranium Energy Exploration.
We are also excited about the planned listing of First Development Resources.
Both events will, we believe, deliver considerable Balance Sheet expansion.

"As far as the Balance Sheet is concerned more generally, I am very pleased to
update shareholders on where this stands as at 30 June 2023. We have continued
to achieve excellent growth in Shareholder Equity since the 30 September 2022
year end, reflecting the successful IPO of Golden Metal Resources and other
corporate activities. Importantly our Shareholder Equity per share has grown
over recent years demonstrating that the financings undertaken have fed
through to increasing value for shareholders.

"During the summer and autumn period, the Company is looking to finalise a
number of value crystallisation events that we expect to further bolster the
balance sheet.

"Finally, it is important to note that Power Metal is focused on achieving
major metal discoveries across its portfolio of interests. In that respect, we
are similar to many exploration companies. However, rather than expect our
shareholders to bear the costs of all exploration through repeated rounds of
equity financing, we are also focused on finding, through spin-out listings,
joint ventures and disposals (principally for acquirer equity), multiple
innovative financing structures for the costs of project management and
exploration. We will continue to offer shareholders material exposure to the
discovery upside through large equity holdings in our investee companies."

Corporate Initiatives

Power Metal has undertaken three project disposals to date leading to
significant equity positions in Kavango Resources PLC (LON:KAV), First Class
Metals PLC (LON:FCM) and Golden Metal Resources PLC (LON:GMET). Together these
investments are currently valued at £6.7 million  and represent a small
proportion of the historic project interests previously held by the Company.

The Company is eager to build a more extensive portfolio of investments
through continuing disposals and recognises the potential for the value of the
portfolio to grow considerably through this disposal activity and, as the
junior resource sector recovers, through an appreciation of the value of its
underlying investments.

At present, the Company is actively pursuing a number of corporate initiatives
in the following business interests as summarised below. Shareholders should
note, however, that there can be no certainty that the current initiatives
underway below will lead to a successful conclusion.

 Business Interest                                         Commercial Work Underway

 Silver Peak Project, Canada (30% POW)                     Discussions underway to determine the optimal ownership structure and
                                                           advancement of the project.
 Athabasca Basin, Canada (100% POW)                        Planned listing of Uranium Energy Exploration (see appointment of Financial
                                                           Adviser below).
 ION Battery Resources Ltd, Canada (100% POW)              Following completion of Authier project Earn-In announced recently, plans are
                                                           being finalised for the next corporate steps, seeking to maximise value for
                                                           Power Metal.
 Tati Goldfields, Botswana (100% POW)                      Pursuing discussions to determine the optimal ownership structure and
                                                           advancement of the project.
 Molopo Farms Complex, Botswana (87.71% POW)               Pursuing multi-party discussions to secure project level financing or joint
                                                           venture partner to enable accelerated exploration across extensive nickel and
                                                           platinum group metal targets delineated from historical exploration work.
 Haneti project, Tanzania (30% POW)                        Discussions continuing with joint venture partner Katoro Gold PLC (LON:KAT)
                                                           with regard to future ownership and advancement of the project.
 First Development Resources PLC, Australia (58.59% POW)   Pursuing multi-party discussions on cornerstone strategic investment in the
                                                           IPO financing, leading to completion of IPO financing and listing in the
                                                           London capital markets.
 New Horizon Metals Pty Ltd, Australia (20% POW)           Discussions advancing for the disposal of POW interest.

 New Ballarat Gold Corporation PLC, Australia (49.9% POW)  Discussions continuing with joint venture partner Red Rock Resources PLC
                                                           (LON:RRR) with regard to future ownership structure and advancement of the
                                                           project.

 

In addition, the Company is actively involved in discussions in respect of
exploration and development opportunities in Saudi Arabia, which are plentiful
and offer high impact potential for the Company. Further information in
respect of material developments will be announced in due course.

Accelerated Exploration

Alongside the above corporate initiatives, the Company is pursuing proactive
exploration at a number of properties in and surrounding the Athabasca Basin,
targeting uranium discoveries; and also, at the Tati Goldfields project in
Botswana, targeting a significant gold discovery.

Further exploration focused updates are expected as material developments
occur.

OTC Listing

The Company is pleased to announce that it is intending to apply for a listing
on the US OTC market. The application will be subject to various regulatory
approvals and an update on its progress will be provided in due course.

If successful, this important step will provide easier trading accessibility
for US investors wishing to buy Power Metal shares on market and will, in the
Company's view, potentially increase the liquidity of Power Metal share
trading.

Appointment of Beaumont Cornish as Financial Adviser to Uranium Energy
Exploration ("UEE")

The Company is pleased to announce the appointment by UEE of Beaumont Cornish
Limited as Financial Adviser in respect to the intended listing of UEE on a
recognised London exchange. The listing will be subject to the various
regulatory approvals and an update will be provided in due course.

The UEE transaction details are being finalised and a further update to the
market will be provided in due course. UEE will hold the Reitenbach and E-12
uranium properties in Saskatchewan, Canada currently 100 per cent owned by
Power Metal. Additional selected interests from the current portfolio and
external assets may be added to enhance the planned listing portfolio.

Financial Update

Power Metal is pleased to report that, on an unaudited basis, the Company
Shareholders' Equity as at 30 June 2023 was £15.5m vs £10.2m, on an audited
basis, as at 30 September 2022, demonstrating growth of 52 per cent*.

The Company's Gross Assets total as at 30 June 2023 was £15.8m vs £10.7m, on
an audited basis, as at 30 September 2022, demonstrating growth of 48 per
cent*.

* The Consolidated Shareholders' Equity at 30 September 2022 was £11.7m and
the Consolidated Gross Assets £14.6m. The Consolidation process is an
accounting exercise that fully reflects the value of subsidiary company net
assets , however the consolidation exercise is only conducted as part of the
preparation of `power metal's interim and full year financial statements.

The Gross Asset and Shareholder Equity figures are accounting valuations based
on cash, listed investments at market value on 30 June 2023 and the cost value
of project acquisitions and project operational expenditures (corporate and
exploration costs).

The Company and Consolidated Gross Assets and Shareholder Equity per issued
ordinary share has been increasing each reporting period end since 30
September 2020, demonstrating that Power Metal has been generating value per
share notwithstanding share dilution over the period.

Since 30 September 2020, the Company (unconsolidated) Gross Assets per issued
POW share have grown by 89 per cent and Company Shareholder Equity per share
by 105 per cent to 30 June 2023.

The growth outlined above has been achieved despite extremely challenging
market conditions over recent years and without the benefit of stronger listed
asset valuations that would ordinarily occur in more normalised or positive
market conditions.

In addition, accounting valuations, other than for cash or listed investments,
Gross Assets and Shareholder Equity do not reflect the full value of business
interests at the reporting date, many of which, in the Board's view, are now
worth considerably more than their accounting valuation at 30 June 2023. That
value will be more accurately reflected as disposals of project interests are
undertaken at market value.

For clarity, included within the above Gross Asset valuation at 30 June 2023
is cash and listed investments of c. £10.0m.

 

 

For further information please visit https://www.powermetalresources.com/
(https://www.powermetalresources.com/) or contact:

 

 Power Metal Resources plc
 Sean Wade (Chief Executive Officer)                                             +44 (0) 20 3778 1396

 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

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

 

 BlytheRay (PR Advisors)                            +44 (0) 20 7138 3204
 Tim Blythe
 Megan Ray

 

 

NOTES TO EDITORS

Power Metal Resources plc - Background

Power Metal Resources plc (AIM:POW) is an AIM listed metals exploration
company which finances and manages global resource projects.

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 grow the
Company or may be returned to shareholders through share buy backs, dividends
or in-specie distributions of assets.

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