REG - Power Metal - Uranium & Rare Earths Acquisition - Australia

Power Metal ResourcesAnnouncement

19/11/2021 10:20

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211119:nRSS9744Sa&default-theme=true

RNS Number : 9744S  Power Metal Resources PLC  19 November 2021

19 November 2021

Power Metal Resources plc

("Power Metal" or the "Company")

Acquisition of Uranium & Rare-Earth Element Project - Australia

Power Metal Acquires the Selta Uranium and Rare-Earth Element Project, Located
in the Northern Territory, Australia, through Subsidiary First Development
Resources Limited

Power Metal Resources plc (LON:POW), the London listed exploration company
seeking large-scale metal discoveries across its global project portfolio,
announces it has signed an Agreement ("Agreement") for the 100% acquisition
(the "Acquisition") of the Selta Project ("Selta" or the "Project"), located
in the Northern Territory, Australia.

A map showing the location of the Selta Project may be viewed through the
following link:

https://www.powermetalresources.com/selta-project-overview-map-2/
(https://www.powermetalresources.com/selta-project-overview-map-2/)

The Acquisition will be undertaken by Power Metal subsidiary, First
Development Resources Limited ("FDR"), in an all FDR share transaction to
acquire a 100% interest in URE Metals Pty Limited ("URE"), a private
Australian company which wholly-owns the Selta Project.

FDR is a special purpose company set up by Power Metal to act as a vehicle for
a planned listing on the London capital markets; with a unique and high-impact
portfolio of exploration interests.

FDR recently acquired outright First Development Resources Australia Pty
Limited ("FDR Australia") and its interests in the Paterson Province of
Western Australia.  The announcement in respect of the acquisition of FDR
Australia is accessible through the following link:

https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248
(https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248)

FDR is seeking to acquire additional strategic exploration interests and the
acquisition of the Selta Project announced today is an important step in the
completion of that process.

Note: No Power Metal shares will be issued for this transaction with FDR
utilising its own equity for the Acquisition.

HIGHLIGHTS

About the Selta Project

-      The Selta Project, located in Australia's Northern Territory,  is
considered to be highly-prospective for uranium ("U") and rare-earth element
("REE") mineralisation. The Northern Territory hosts some of Australia's best
known and high-grade U and REE deposits, including Arafura Resources' (ASX:
ARU) world-class Nolans Bore REE deposit - which is located less than 70km
away from the Selta Project. The State has a significant legacy of uranium
mining and exploration.

 

-      The Project comprises three exploration licence applications
covering a total land area of 1,574.92km(2), including EL 32737 - 780.85km(2),
EL 32738 - 312.17km(2) and EL 32755 - 481.90km(2).

 

-      Previous surface sampling across the Selta Project has identified
elevated uranium results up to 3.8 parts per million ("ppm") U in soil
samples, stream sediment samples up to 27.2ppm U and rock chip samples up to
244ppm U.

 

-      Assayed whole rock grab samples from the Selta Project have
yielded highly anomalous rare-earth element mineralisation including 93ppm
neodymium ("Nd") and 25ppm praseodymium ("Pr"), the presence of which
highlight the exciting exploration potential of the Project. Encouraging
historical results, combined with underlying geological similarities between
the Selta Project and REE and uranium mineralisation at the nearby Nolans Bore
deposit have led to the investment decision to acquire the Project outright.

 

-      The Selta Project is also considered to be highly-prospective for
base and precious-metal mineralisastion. Prodigy Gold's (ASX: PRX) Reynolds
Range gold-copper project shares a 65km long contiguous border with Selta.
Reynolds Range has recently delivered highly-encouraging drilling results,
including 3.93g/t Au over 17m from borehole  BRC100002(3), which is located
less than 8km from the Reynolds Range's claim border shared with the Selta
Project.

 

The Key Agreement Terms

-      FDR will acquire a 100% interest in URE for initial consideration
of up to AUD$25,000 (£13,465) cash payable by 31/12/2021 to cover historic
expenses and £100,000 payable through the issue of 1,499,250 FDR shares of
one pence each in FDR at a price of  6.67 pence each ("FDR Shares") (post
share issue 3.85% of FDR issued share capital).

 

-      Additional consideration will be due as each of the three licence
applications are granted, with an additional amount payable of £400,000
should all licences be granted, again payable through the issue of up to
5,997,001 FDR Shares.

 

-      Should the total consideration of £513,465 be payable, 7,496,251
FDR Shares will be issued comprising 16.67% of FDR issued share capital.  At
that point, and subject to any further acquisitive transactions or events
changing the share capital structure, Power Metal will hold the balancing
83.33% of FDR issued share capital.

 

-      Detailed Agreement terms outlined below.

 

Next Steps

-      FDR is planning to list on the London capital markets in Q1 2022.

 

-      FDR is in late stage discussions to further expand its project
portfolio in preparation for listing, including additional precious, base and
strategic-metal opportunities.

 

-      FDR is undertaking exploration work on its existing interests in
the Paterson Province of Western Australia, and will now commence preparatory
exploration work on the Selta Project in the Northern Territory in preparation
for licence grants.

 

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

"This latest acquisition further builds the First Development Resources
portfolio which now includes four distinct project interests.  This dynamic
portfolio includes the Wallal Project located in the prolific Paterson
Province of Western Australia, with exciting magnetic bullseye gold-copper
drill targets - and now the Selta Project, located in the Northern Territory,
within a region highly prospective for U and REE mineralisation, evidenced by
the nearby Nolans Bore deposit held by Arafura Resources.

We are seeking a listing of FDR on the London capital markets, and this latest
acquisition is an important piece of the FDR portfolio which is being
finalised in advance of that proposed listing. We intend to create a unique
vehicle with a number of high-impact interests in top-tier mining
jurisdictions, which on listing, will launch into multiple active exploration
programmes where the results of such exploration may be transformational for
shareholders.

Alongside the portfolio developments, we are working with some intensity on
preparatory exploration, most significantly at the Wallal Project, where 2D
seismic geophysics reprocessing and passive seismic results are awaited.

Further announcements in respect of ongoing exploration and the FDR portfolio
build are expected in the near future."

 

ACQUISITION TERMS

FDR UK will acquire the entire share capital of URE Metals Pty Limited and all
URE's interests from current URE shareholders.

 

Capital Restructuring FDR

 

Prior to the transaction, Power Metal has a 100% interest in FDR which
currently has a single issued share owned by Power Metal.

A capital restructuring of FDR is to be undertaken to increase its authorised
share capital in preparation for the listing process (the "Capital
Restructuring").  After this capital restructuring, Power Metal's holding in
FDR will be 37,481,259 FDR Shares.  At this point the loans provided by Power
Metal to acquire the interests of FDR UK will be written off into the Capital
Restructuring.

 

Initial Consideration

For the immediate outright acquisition of a 100% interest in URE and all its
interests FDR will pay consideration of up to AUD$25,000 cash (£13,465)
payable by 31/12/2021 and £100,000 payable through the issue of 1,499,250 FDR
Shares after completion of the Capital Restructuring equating to 3.85% of FDR
("Initial Consideration").

Additional Consideration

Additional consideration will be due as each of the three licence applications
comprising the Selta Project are granted, with additional consideration of
£400,000 should all licences be granted, again payable through the issue of
up to 5,997,001 FDR shares after completion of the Capital Restructuring
("Additional Consideration").

This Additional Consideration is payable on licence grants as follows:

 Licence Application Number  Application Size (Blocks)  Application Size (Km(2))  Consideration Payable (£)   FDR Shares Issued as Payment
 EL 32737                    250                        780.85                    198,321                     2,973,328
 EL 32738                    100                        312.17                    79,285                      1,188,681
 EL 32755                    155                        481.90                    122,394                     1,834,992
 Total                       505                        1,574.92                  400,000                     5,997,001

 

Should the Initial Consideration and all Additional Consideration of £513,465
be payable, 7,496,251 FDR Shares will be issued comprising 16.67% of FDR
issued share capital.  At that point, and subject to any further acquisitive
transactions or events changing the share capital structure, Power Metal will
hold the balancing 83.33% of FDR issued share capital.

Royalty

The Shareholders of URE will retain a 2% net smelter return royalty ("NSR")
over all licences included in this transaction and FDR will have the right to
purchase 1% of this NSR for A$1,000,000.

Note: For the period 1 July to 21 October 2021 URE had a loss from ordinary
activities of AU$2,918 and as at 21 October 2021 had net liabilities of
AU$9,745.

SELTA PROJECT - BACKGROUND

The Selta Project, considered to be prospective for uranium and rare-earth
elements, is located in Australia's Northern Territory within the prospective
but largely under-explored central Aileron Province, between the Georgia and
Ngalia Basins, in a region the Northern Territory Government has declared
prospective for uranium mineralisation.

The Project comprises three exploration licence applications covering a total
land area of 1,574.92 km(2) including EL 32737 - 780.85km(2), EL 32738 -
312.17 km(2) and EL 32755 - 481.90 km(2).

The Northern Territory hosts some of Australia's best known and high-grade
uranium deposits and has a long history of uranium mining. In addition, the
Aileron Province is a major exploration target for base metals including
nickel ("Ni") and copper ("Cu"), REE and orogenic gold ("Au") with numerous
companies actively exploring within the region.

The Selta Project borders Prodigy Gold NL (ASX:PRX), IGO Ltd (ASX:IGO) and
Canadian listed Megawatt Lithium and Battery Metals Corp (CSE:MEGA); and is
less than 70km northwest of Arafura Resources (ASX:ARU) high-grade,
world-class Nolans Bore REE deposit.

The Nolans Bore rare-earth elements-phosphate-uranium-thorium deposit is one
of the largest deposits of its kind in the world with a JORC (2012) compliant
Mineral Resource of 56 million tonnes at an average grade of 2.6% total
rare-earth oxides and 11% phosphate (P(2)O(5)). Commercial production is
targeted for late 2024, with the Feasibility Study considering a 4,440 tonne
per annum NdPr oxide producing open pit mining operation with a 38 year
mine-life and an NPV(8%) of US$1.011B.(1)

The Selta Project's southern claim boundary abuts the Megawatt landholding.
Promising surface samples collected within the Megawatt property coupled with
a known radiometric trend which links Megawatt with Arafura's ground to the
south-east, are indicators of uranium mineralisation. The Selta Project area
is currently located along strike to the NW of that radiometric trend and
future work will seek to extend that trend within the property.

The underlying geology within the Selta Project is interpreted to be
comparable to the Nolans Bore deposit with REE and U mineralisation at Nolans
Bore being hosted within G6 granites which are compositionally similar to the
G5 granite prevalent across the Selta Project.

Notably, within 5km of the Selta Project's eastern boundary are three REE
occurrences up to 543ppm Nd and 148ppm Pr hosted within the G5 granite.
Selta's exploration potential has been enhanced by encouraging historical
surface sampling results of up to 3.8ppm U in soil samples, 27.2ppm U in
stream sediment samples and up to 244ppm U in rock chip samples, all of which
led to a study by The Australian Mineral Development Laboratories(2) stating:

 "…the amount of uranium moved by solution or erosion is large enough for
there to be several potentially economic orebodies."

In addition to uranium the Selta project has significant exploration potential
for Cu, Au and silver (Ag).

Prodigy Gold's Reynold Range Gold Copper Project, which intersects the Selta
Project's lease area, has delivered encouraging results  across four
prospects for Cu, Au and Ag with reverse circulation drilling intercepts
yielding 29m @ 2.32g/t Au (Falchion Prospect) and 17m @ 3.93g/t Au  (Sabre
Prospect) and surface samples of up to 7.5g/t Au, 783g/t Ag and 19.3% Cu
(Scimitar Prospect) and 0.55g/t Au, 271g/t Ag and 20.3% Cu at the Reward
Prospect.(3)

NEXT STEPS

FDR will work with the Vendors to secure grant of the three licence
applications comprising the Selta Project. The exploration work outlined below
will be undertaken as appropriate, before or after granting of licences.

FDR will commence a review of all historic drilling and geophysics reports and
where necessary reprocess the data to improve resolution in anticipation of
initiating a targeted high resolution electromagnetic survey along with an
airborne gamma-ray spectrometry survey.

The newly acquired geophysics combined with the validated historical data will
enable the Company to identify priority targets for mineralisation that can
potentially be drill-tested.

 

 

References:

(1 )Arafura Resources Limited Annual Geneeral Meeting Presentaion, 21/10/2021
. Available at: https://wcsecure.weblink.com.au/pdf/ARU/02438942.pdf
(https://wcsecure.weblink.com.au/pdf/ARU/02438942.pdf)

(2 )The Australia Mineral Development Laboratories (CR 74/19) Sixth Progress
Report MP 4976/73 Geochemical Survey, Arunta Area Amdel (December 1973)

(3 )PRX ASX Release - 20 May 2021. Available
at: https://wcsecure.weblink.com.au/pdf/PRX/02376469.pdf
(https://wcsecure.weblink.com.au/pdf/PRX/02376469.pdf)

 

 

 

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.

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.

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

 Athabasca Uranium           Canada     100%             Phase I field exploration completed                                           Laboratory assay results of samples collected for uranium and REEs
 Authier North Lithium       Canada     Earn-in to 100%  Soil & rock sampling completed                                                Laboratory assay results of samples collected
 Silver Peak                 Canada     30%              Following drill programme demonstrating bonanza grade silver, overlimit       Overlimit analysis results
                                                         testing being undertaken where sample grade exceeded previous assay method
                                                         detection limits
 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
 Tati Gold/Nickel            Botswana   100%             Reverse circulation drill programme completed                                 Laboratory assay results awaited
 Victoria Goldfields         Australia  49.9%            Ongoing exploration across 848km(2) of granted exploration licences           Results from field programme including drill targets for near term drilling

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

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQBGBDBUBBDGBC