Company has Signed an Assignment and Assumption Agreement Allowing it to Earn a 100% Interest in the Golconda Summit Gold Property Located in Nevada, USA
Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce the execution of an Assignment and Assumption Agreement (the “Agreement”) between its wholly-owned subsidiary Golden Metal Resources Ltd. (“Golden Metal”) and GR Silver Mining Ltd. (“GR Silver”).
The Agreement gives Golden Metal an option to earn-in to 100% of the Golconda Summit Gold Property (“Golconda Summit” or the “Property”) located in central Nevada, USA.
Paul Johnson, Chief Executive Officer of Power Metal Resources, commented:
“We recently formed Golden Metal to act as a holding company for new acquisitions of precious and base metal projects located in North America and I am pleased to announce this first transaction within the mining friendly state of Nevada.
The option agreement on the Golconda Summit Gold Property gives the Company exposure to an exciting carlin-type gold project located in the highly gold endowed Great Basin district at the confluence of the prolific Battle Mountain-Eureka and Getchell gold trends.
I look forward to updating the market with further information on the Property in the coming weeks.”
Vendor and Property Information
GR Silver Mining Ltd is a Vancouver based publicly traded (TSX-V:GRSL) junior mining company focused on advanced stage silver-gold assets in Mexico.
GR Silver has held an option agreement since 11 August 2017, to earn-in to 100% of the Golconda Summit Gold Property from the underlying vendor Eureka Resources Conversion LLC (“Eureka Resources”), a private Nevada based company.
Golconda Summit is an early-stage gold exploration project comprising 44 current Bureau of Land Management (“BLM”) Lode Claims held in the name of Eureka Resources.
The Property is located approximately 15km east of to the town of Winnemucca, at the confluence of the prolific Battle Mountain-Eureka Trend and Getchell Trends and within Nevada’s Great Basin metallogenic province which is one of only six global gold belts hosting gold endowments of +200Moz. The Property is approximately:
- 35km southwest of the Nevada Gold Mines LLC (“Nevada Gold” a Barrick Gold Corporation/Newmont Corporation joint venture) Turquoise Ridge Complex underground and open-pit mines which have Total 43-101 compliant Resources (Measured & Indicated) of 130Mt @ 4.30g/t Au (for 18Moz Au) inclusive of Total Reserves (Proven & Probable) of 83Mt @ 5.02g/t Au (for 13Moz Au) 1;
- 20km northwest of Nevada Gold’s Phoenix Operation Lone Tree open-pit mine which reportedly produced 4.2Moz Au at an average grade of 2.06g/t Au up until its closure in 2006 2; and
- 25km northwest of SSR Mining Inc.’s Marigold open-pit mine with current Total 43-101 compliant Resources (Measured & Indicated) of 5.11Moz Au (341Mt @ 0.47g/t Au) 3.
Previous exploration work on the Property by Nerco Mineral Company in 1989 encountered significant gold mineralisation located within upper plate Havallah Sequence rocks including trench assay results of 7.6m @ 24.0g/t Au and 15.2m @ 8.6g/t Au, as well as shallow drilling results of 10.7m @ 3.9g/t Au.4
The Property is considered prospective for the identification of additional near-surface gold mineralisation within Havallah Sequence rocks as well as for Carlin-type replacement style gold mineralisation within lower plate Edna Mountain Formation and Antler Peak Limestone units located below the Golconda thrust fault.
Assignment and Assumption Agreement
- The Agreement signed with GR Silver allows Golden Metal to earn a 100% interest in the Golconda Summit Gold Property located in Humboldt County, Nevada, USA.
- The Agreement signing fee is to be satisfied through a cash payment of US$60,000 (circa £42,495) to GR Silver, to be paid by Power Metal from exisiting cash resources.
- Golden Metal will be assigned the underlying option agreement (“Underlying Option”) signed on 11 August 2017, between GR Silver and the underlying vendor Eureka Resources Conversion LLC.
Underlying Option Agreement
- The Underlying Option agreement allowed GR Silver to earn a 100% undivided interest in the Golconda Summit Gold Property upon satisfying either the Staged Payments Option or the Accelerated Payment Option, both outlined below (Golden Metal will assume the terms of this agreement unchanged):
Staged Payments Option
– Ten thousand (US$10,000) dollars due and payable on the execution of the Underlying Option (Paid previously by GR Silver);
– A further fifteen thousand (US$15,000) dollars due and payable on or before the second (2nd) anniversary of the effective date (Paid previously by GR Silver);
– A further fifteen thousand (US$15,000) dollars due and payable on or before the third (3rd) anniversary of the effective date (Paid previously by GR Silver);
– A further twenty thousand (US$20,000) dollars due and payable on or before the fourth (4th) anniversary of the effective date (by 11 August 2021);
– A further twenty-five thousand (US$25,000) dollars due and payable on or before the fifth (5th) anniversary of the effective date (by 11 August 2022);
– A further fifty thousand (US$50,000) dollars due and payable on or before each of the sixth (6th), seventh (7th), eight (8th), ninth (9th) and tenth (10th) anniversaries of the effective date, for a combined total of $335,000.
Accelerated Payment Option
– GR Silver may accelerate the exercise of the Underlying Option at any time by paying the owner a lump sum cash payment equal to one million (US$1,000,000) dollars less any annual Undelying Option payment paid to the owner prior to the date thereof.
Upon completion of the earn-in agreement, Eureka Resources will be granted a 1% net smelter return royalty which can be bought back at any time within one (1) year after commencement of production of any minerals from the Property for a price of one million dollars (US$1,000,000).
Golconda property maps are available on the Company’s website through the following link:
The maps include:
Figure 1: Regional scale Golconda Summit Property Map
Figure 2: Property scale Golconda Summit Property Map
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.
Source 1: Nevada Gold Mines Technical Report on the Turquoise Ridge Complex, State of Nevada, USA; NI 43-101 Report dated 25 March 2020. https://s25.q4cdn.com/322814910/files/doc_downloads/operations/Turquoise-Ridge-Technical-Report-March2020.pdf
Source 2: Magmatic-Hydrothermal Gold Mineralization at the Lone Tree Mine, Battle Mountain District, Nevada; 1 August 2019. https://doi.org/10.5382/econgeo.4665
Source 3: SSR Mining Inc Mineral Reserves and Resources Statement, announced 30 March 2021 https://www.ssrmining.com/_resources/2021-03-30-Reserves-and-Resources-Final.pdf
Source 4: Summary Report for the Golconda Summit Property Iron Point Mining District, Humboldt County, Nevada; unpublished report prepared for Carlin Gold Corporation and Toquima Minerals US Inc. by K. Brook, dated 4 April 2006.
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/ 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)
+44 (0) 1483 413 500
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson
+44 (0) 20 7330 1883