REG - Power Metal Res. - HoT with Alara Resources & Awtad Copper

Power Metal ResourcesAnnouncement

11/09/2024 07:00

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RNS Number : 6609D  Power Metal Resources PLC  11 September 2024

11 September 2024

Power Metal Resources PLC

("Power Metal" or the "Company")

Non-binding Heads of Terms signed with Alara Resources & Awtad Copper

Power Metal Resources PLC (AIM:POW, OTCQB:POWMF), the London listed
exploration company with a global project portfolio, and its majority held
subsidiary Power Arabia Ltd ("Power Arabia"), are pleased to announce the
signature of a non-binding Heads of Terms ("HoT") with Alara Resources Limited
("Alara") and Awtad Copper LLC ("Awtad Copper") for Power Metal to spend up to
US$740,000 from the date of execution of a legally binding agreement to earn a
12.5% stake in the Block 8 concession in Oman ("Block 8"), (the "Proposed
Agreement").

Alara (ASX: AUQ) is an Australia-based mining and exploration company with
operations currently focused in the Middle East. Alara's flagship mining
project is the Al Wash-hi - Majaza Copper-Gold Project in Oman (the "Al
Wash-hi - Majaza Mine"), and it also continues to pursue exploration
opportunities across Oman and Saudi Arabia for copper and other metals
including zinc, silver and gold. Awtad Copper is a special purpose private
company in Oman established by the Al Maawali Family, specifically focused on
the Block 8 Project, located in the Hazm area of northwestern Oman. Alara
holds its 10% interest in Block 8 under a joint venture with Awtad Copper.

 

A formal and legally binding agreement containing the full terms and
conditions of the Proposed Agreement shall be executed by the parties within
15 days of executing the HoT. Although there can be no certainty at this stage
given the non-binding nature of the HoT, Power Metal remains confident that
the agreement will become binding subject to further discussions between the
parties. Further announcements relating to the Proposed Agreement will be made
as appropriate.

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

"I am delighted to be sharing this news for Power Metal in the Arabian Shield,
expanding the Power Arabia portfolio into Oman. I am hopeful that the
prospective nature of Block 8, identified in historic workstreams, will be
further proven once exploration works get underway, following consultation
with Awtad and Alara."

"This deal showcases our intent to deliver value from a diverse portfolio and
I look forward to providing shareholders with updates from the Proposed
Agreement."

Awtad Copper Chairman Sheikh Zeyad bin Talib Al Maawali said: "We are thrilled
to embark on this strategic collaboration with Alara Resources and Power Metal
Resources. The exploration of Block 8 represents a significant milestone in
unlocking the mineral wealth of Oman, and we believe that with the combined
expertise and resources of our partners, we are well-positioned to uncover the
true potential of this highly prospective area.  As stewards of this
important concession, Awtad Copper LLC is dedicated to playing a pivotal role
in driving sustainable growth and delivering long-term value for Oman and all
stakeholders involved."

Alara Managing Director Atmavireshwar Sthapak said: "Alara is pleased to
welcome Power Metal as a potential third partner in Awtad Copper LLC and
looking forward to commencement of exploration activities in Block 8 area.
Alara continues to hold its stake in the JV and maintains its right to
increase its shareholding by investing in future exploration programs in the
area."

 

 

The terms of the HoT are that:

·    Power Metal will become manager of the exploration programmes for
Block 8 during the spending phase of the Proposed Agreement.

 

·    The Company will provide all management, planning, execution,
interpretation and reporting on all exploration activities and will consult
with Awtad Copper during development and implementation of exploration
programmes.

 

·    Power Metal will provide funding of up to US$740,000 for work
activities. An initial amount of US$500,000 will relate to the period up to
the renewal date of the existing licence (30th April 2025), with the balance
attributable to the period following successful renewal by Awtad Copper.

 

·    Following the initial expenditure milestone of US$500,000, Power
Metal will earn a 10% interest in Block 8 and a further 2.5% interest
following an additional US$240,000 spend.

 

·    At completion of the US$740,000 spend, a joint funding programme
covering future spend and earn in percentages will be negotiated.

 

·    Awtad Copper will maintain the licences and remain licence holders
for this phase of work, however, Power Metal holds first right of refusal for
acquisition should Awtad Copper wish to dispose of Block 8.

 

·    Awtad Copper is responsible for seeking all required approvals for
the exploration programme.

·    With the Al Wash-hi - Majaze Mine being in close proximity to Block
8, and Awtad Copper being well established in Oman, local logistical and
stakeholder support will be provided to Power Arabia to enable the focus of
work to be in the exploration arena.

 

Figure 1: Location of Block 8, Oman, September 2024

 

Block 8 exploration history and prospectivity

Block 8 covers about 496 km2 in the Hazm area east of Daris in northwestern
Oman and was first granted in 2009. In January 2011, Awtad Copper entered into
a joint-venture ("JV") agreement with Alara who have been carrying out
exploration work in the adjoining Block 7 as part of another JV arrangement.
Exploration work on Block 8 ceased in 2013 while the block was being renewed,
which was finalised in May 2024.

Further to detailed discussions, the Company has proposed a comprehensive
exploration programme for Block 8 to both develop existing copper prospects
defined from a combination of historic surface work and drilling, as well as
grass roots exploration work on the remainder of the Block which, to date, has
not been the subject of detailed exploration.

The historic exploration work, combined with the geological setting of the
Block, are highly encouraging, with the Block hosting a section of the Semail
ophiolite sequence which is a highly prospective geological unit that, to
date, has yielded 150 known volcanic massive sulphide (VMS) prospects.

 

Figure 2: Simplified geologic map of the Semail ophiolite in northern Oman
taken from Gilgen et al. 2013 (modified from Calvez and Lescuyer, 1991),
showing the main VMS and gossan deposits. The black polygon marks the location
of the Block 8.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 3: Summary of historical exploration work in relation to Block 8,
Alara, 2013.

Power Metal will use industry-accepted exploration techniques to advance the
licence, with technical work to be carried out at every stage to enable any
new data to qualify for inclusion in an accredited MRE to 43-101 or JORC
compliance should this be required.

Through historical work by Alara in 2013, there are several copper prospects
already identified, which allows next stage exploration programmes to proceed
efficiently while more early-stage work will be required on the remainder of
the highly underexplored Block 8.

Figure 4. Geological Map of Block 8, Alara, 2013

 

 

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 LLP (Nomad and Joint Broker)
 Ewan Leggat/Caroline Rowe                                                       +44 (0) 20 3470 0470

 Tamesis Partners LLP (Joint Broker)
 Richard Greenfield/Charlie Bendon                                               +44 (0) 20 3882 2868

 BlytheRay (PR Advisors)

 Tim Blythe/Megan Ray/Alastair Roberts                                           +44 (0) 20 7138 3204

 

NOTES TO EDITORS

Power Metal Resources plc (AIM:POW,OTCQB:POWMF) is a London-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, Saudi Arabia 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.

 

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