Tag Archives: mining

The Molopo Farms Complex Project (“MFC Project”) is owned by Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key”) with a 60% interest and Power Metal with a 40% interest.  Power Metal earned-in to its 40% interest by spending US$500,000 on exploration work, including the maiden drill programme completed earlier this year.

The maiden drill programme provided proof of concept of the geological model and also identified significant nickel sulphides in the drill core with assays up to 1.7% nickel and 0.55g/t platinum ¹.  This was a very positive outcome for the first drill programme on this district scale exploration project.

In order to simplify the project ownership structure and streamline ground operations in Botswana, an option agreement was signed with Kavango Resources plc to acquire Kalahari Key and its 60% interest in the MFC Project.

In lieu of an option fee and as part of its due diligence, Kavango is undertaking an agreed exploration work programme on the MFC project, the results of which will be made available to Power Metal in due course.

If Kavango exercises its option Power Metal will sell its circa 21% interest in Kalahari Key in exchange for Kavango shares and warrants.  Power Metal will retain and intends to maintain its 40% interest in the MFC project for the foreseeable future.

Further details in respect of the Kavango option are in the Company’s announcement on 26/11/2021 as linked below:

https://www.londonstockexchange.com/news-article/POW/kavango-option-kalahari-key-botswana/15226717

Company View:

Proof of the geological model and the identification of nickel sulphides in the inaugural three drill hole programme was an extremely positive initial outcome for the MFC Project. 

It became evident however, that progress was slower than ideal particularly given the positive results of maiden drilling programme. As a result, action was needed to simplify the project ownership structure in order to accelerate work progression and streamline ongoing operations.

The Kavango option agreement was an important step in this regard.  We look forward to the results of the option work programme which should provide valuable additional data to help plan the next phase of drilling to follow up on the encouraging results achieved thus far.

The South Ghanzi Project is held within Kanye Resources Pty Limited, a joint venture vehicle 50% held by Power Metal and 50% by partners Kavango Resources plc (LON:KAV) who are the operators of the project.

Drill target refinement continues at the South Ghanzi Project, together with initial exploration at the South Ghanzi Extension licences and the Mamuno licences acquired more recently in August 2021 ².  Together, the ground footprint in the Kalahari Copper Belt (“KCB Project”) totals 4,257km².

Approval of the Environmental Management Plan (“EMP”) for South Ghanzi was secured in October 2021 clearing the last key administrative hurdle and enabling drilling to be undertaken subject to the ongoing target refinement.

The joint venture partners continue to consider the planned IPO of Kanye Resources (through a UK listing company, Kanye Resources plc) and an update in this regard will be provided as soon as practicable.

Company View:

Approval of the EMP was a major step forward for the KCB Project. The KCB holds district scale potential and Power Metal is working with Kavango to ensure the initial drill holes are optimally cited to gather the best geological data and maximise the chance of discovery.

The joint venture partners anticipate a material budget will be applied to drilling at the KCB Project and therefore appropriate investment is being made in preparatory measures to optimise the vectoring of drill targets.

The Ditau Camp Project (“Ditau”) is also held within the Kanye Resources joint venture as outlined above.

Exploration work targeting Rare Earth Elements (“REE”) and base metals has identified a 2.5km by 2.8km target area at prospect I10 where an Audio-frequency Magnetotellurics (“AMT”) geophysical resistivity anomaly, coincides with a gravity high anomaly. The latest Ditau exploration findings were announced to the market in October 2021 and may be viewed in the link below:

https://www.londonstockexchange.com/news-article/POW/ditau-project-botswana-exploration-update/15184669

Further exploration work is continuing on the ground and the next material step, exploration drilling, is expected to commence in the first quarter of 2022.

Company View:

The Ditau Camp Project, soon to be the target of exploration drilling, has delivered some extremely positive findings to date, particularly with the large anomaly now identified at prospect I10. 

The expansion of target commodities from REEs to now include base metals demonstrates the prospectivity Ditau holds and we are very eager for drilling to commence as soon as possible.

The Company recently completed a maiden drill programme following up positive initial exploration results including geochemical soil sampling, mapping & prospecting, and ground-based geophysics including high-resolution magnetic and radiometric surveys.

The initial exploration highlighted five target areas across the two licences, which are defined by kilometre-scale geochemical anomalies that are coincident with various geological structures that were highlighted by the ground geophysical surveys.

The Company announced a maiden drill programme at the Tati Project in October 2021 and details may be viewed through the link below:

https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-drill-programme-commences/15169113

The maiden drill programme comprised 23 reverse circulation (“RC”) drillholes for a total 1,092m drilled. The RC holes targeted multiple nickel and gold anomalies identified by the Company’s Phase I and Phase II geochemical and geophysical programmes completed earlier in the summer. RC samples were shipped to Johannesburg for sample preparation at Intertek Genalysis (“Intertek”) preparatory facility, and have since been shipped and received in Perth, Australia, at Intertek’s laboratory where they are undergoing analysis. Results from all RC samples are still pending and are expected to be received in early 2022.

Power Metal has incorporated a new Botswana company, Tati Greenstone Resources Pty Ltd (“TGR”), to hold the Tati Project.  Documentation for the transfer of the two exploration licences comprising the Tati Project into TGR has been submitted to the Ministry of Mineral Resources, Green Technology and Energy Security (“MMGE”).

Company View:

From the original announcement confirming an option for the Tati Project in May 2021³, Power Metal have moved through a number of initial exploration steps very rapidly. 

We await the results from the recent RC drilling campaign which will provide key information with regard to sub surface geology to complement the information collected at surface from geochemical and geophysical exploration work.

The identification of multiple kilometre-scale gold, arsenic and nickel anomalies so early in the work programme, provides multiple opportunities for a gold or nickel discovery.  We are therefore pushing as hard as possible to accelerate project exploration.

Next stage exploration is drill testing of the 6.8km copper-cobalt geochemical anomaly identified by previous exploration programmes at the Kisinka Project which holds a 25 year production licence.

We are continuing to push for an acceptable drill programme including target finalisation and sourcing of appropriate contractors.

Company View:

The 6.8km copper-cobalt anomaly is an interesting exploration target which we would like to see drill tested.

The Kisinka Project has discovery potential, but the pace of commercial and exploration progress in-country has been slower than ideal and this is something we are working to resolve. 

The Haneti Project is held 35% Power Metal and 65% Katoro Gold plc (LON:KAT).

The next stage of exploration at the Haneti Project is deep diamond core (“DC”) drill testing of targets prospective for nickel sulphide / PGE mineralisation.

The DC drill programme is scheduled to commence in January 2022 and further information will follow in due course.

Company View:

Based on the results achieved to date at the Haneti Project, we are of the belief that the next stage of exploration needs to be deep diamond drilling, and we are very pleased that this work is about to commence. 

If the DC drilling is successful in the delineation of the mineralising system we are ultimately seeking the discovery of a nickel sulphide and PGE deposit and the impact on both Katoro and Power Metal could be significant.

Power Metal are therefore eager to see diamond drilling commence in January 2022 and the findings therefrom.

Power Metal has a 49.9% interest in New Ballarat Gold Corporation plc (“NBGC”) which is held in a joint venture with 50.1% owner Red Rock Resources plc (LON:RRR).

Through its Australian operating subsidiary, Red Rock Australasia Pty Ltd, NBGC has a substantial claim holding within the Victoria Goldfields, Australia.

The latest update in respect of NBGC was released by the Company in December 2021 and may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/new-ballarat-licence-grant-drilling-commences/15251136

Note: subsequent to the above update a further single licence has been granted, EL007505 covering 9km², further details about which will be provided in future NBGC updates.

The update confirms the commencement of an inaugural DC drilling programme at the O’Loughlin’s gold prospect located south of Buninyong.  Further details of the planned drill programme were provided in the Company’s update also released in December 2021 which may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/business-update-red-rock-resources-australasia/15240196

Drilling is progressing well with a market update expected in January 2022.

NBGC is seeking a listing on the London capital markets and is working with advisors in this regard.

Company view:

A significant claim footprint secured by joint venture partners has created a valuable land holding within the Victoria Goldfields, one of the most sought after gold exploration regions in the world.

To date over 10 exploration licences (of the 16 applications) have now been granted, taking the granted footprint to over 1,500km², representing a major achievement which has materially increased the value of the joint venture.

Whilst the preparations for listing the vehicle in London are in process, the proactive approach to exploration continues, with multiple gold exploration targets now subject to diamond drilling that is progressing well. 

During 2021 Power Metal assembled a strategic package of exploration and development interests in Nevada, USA, under the corporate vehicle Golden Metal Resources Ltd (“Golden Metal”). Golden Metal’s project portfolio includes:

–       Golconda Summit – An earn-in over an exploration property targeting a major gold discovery, where Golden Metal has a right to earn-in to a 100% interest.

–       Garfield/Stonewall – Two 100% owned exploration properties targeting gold-silver-copper mineralisation. 

–       Pilot Mountain – 100% interest in an advanced exploration and development property with a substantial JORC compliant Mineral Resource for tungsten (with significant copper, silver and zinc  credits).

The latest Golden Metal project exploration update was released in November 2021 and may be viewed through the link below:

https://www.londonstockexchange.com/news-article/POW/golden-metal-resources-exploration-update/15229671

Golden Metal is seeking a listing on the London capital markets (targeting April 2022) and has recruited its listing board, appointed all advisors and recently raised £750,000 in pre-IPO funding further details of which may be seen in the Company’s December announcement linked below:

https://www.londonstockexchange.com/news-article/POW/golden-metal-resources-pre-ipo-financing/15244131

The Golden Metal website is now live and can be viewed through the following link:

https://www.goldenmetalresources.com

The Golden Metal corporate presentation may be accessed directly through the following link:

https://www.goldenmetalresources.com/golden-metal-resources-presentation/

Company View:

The pre-IPO financing for Golden Metal was conducted at a pre-money valuation of £3.25million.  The intention is to secure an IPO listing at a premium to the pre-IPO valuation and launch Golden Metal with immediate high-impact exploration programmes planned across the portfolio.

Power Metal considers the Golden Metal package to be a highly attractive listing vehicle, offering UK-based investors access to North American exploration focused on the world’s top mining jurisdiction ⁵of Nevada, USA.

The Golden Metal package includes the Pilot Mountain Project, which hosts a significant JORC compliant Mineral Resource which we believe will underpin a strong valuation for Golden Metal going forward.

Golden Metal is a unique opportunity and the Company is looking forward to the planned listing and proactive exploration updates thereafter.

Power Metal acquired a 100% interest in First Development Resources Pty Ltd (“FDR Australia”) via its wholly owned subsidiary First Development Resources Limited (“FDR UK”).  The announcement in respect of this acquisition was released in October 2021 and may be viewed through the following link:

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

FDR Australia has a 100% interest in three exploration projects in the Paterson Province of Western Australia (comprising five granted exploration licences in total and covering a ground footprint of 751km²).

The three projects include the Wallal Project, Braeside West Project and Ripon Hills Project.  At the flagship Wallal Project, ongoing exploration work includes 2D seismic geophysics reprocessing and a passive seismic survey which is intended to help refine drill targeting within the Wallal Main licence area.

Drill targets comprise magnetic bullseye targets of similar geological nature to that drill tested by Greatland Gold plc leading to the discovery of the Havieron deposit also within the Paterson Province.

In November 2021 Power Metal announced that FDR UK had acquired URE Metals Pty Ltd (“URE”) an Australian private company and holder of the Selta Project, comprising 3 exploration licences in the Northern Territory, Australia.  The announcement may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/uranium-rare-earths-acquisition-australia/15219001

The acquisition of URE was almost entirely payable in FDR UK shares diluting Power Metal’s holding in FDR UK to 96.15% initially, and ultimately to 83.33% should all 3 Selta Project licences be granted.

The pre-transaction value of Power Metal’s interest in FDR UK was £2,500,000 and FDR UK is seeking a listing on the London capital markets.  Preparatory steps are being taken for the listing, which is targeting Q2 2022, including the recruitment of a suitable board, senior management team and suite of advisors to assist with the listing process. 

Specifically in respect of the board Tristan Pottas has been appointed as Chief Executive Officer of FDR UK and Craig Moulton as Non-executive Director.

Company view:

It is apparent from shareholder communications with Power Metal that FDR UK will be of great interest going forward.  The combination of the Wallal Project’s exciting magnetic bullseye targets together with the uranium/REEs exploration opportunity at the Selta Project in the Northern Territory, is drawing significant shareholder attention.

The Power Metal team are working hard to implement the preparatory measures needed to secure the listing of FDR UK and are looking forward to providing further updates in due course.

Power Metal announced the 100% disposal of its Schreiber-Hemlo interests to First Class Metals (“First Class”) on 7 September 2021 for a consideration of £1million.  With the shares received on the disposal, and following a subscription by Power Metal of £28,764 at £3/share in the pre-IPO raise, Power Metal currently has an interest of 36.3% in First Class (after reflecting the circa £400,000 pre-IPO raise undertaken by First Class).

First Class is seeking a listing on the London capital markets and is working on this currently targeting a listing for Q1 2022.

Power Metal is working with First Class to support their listing plans and looks forward to reporting further progress in this regard. On listing Power Metal will be a significant shareholder in First Class.

Company View:

The First Class Metals business offers investors through London, access to a Ontario, Canada, focused exploration vehicle with extensive exposure to highly prospective and strategically positioned projects. 

With the integration of the Power Metal Schreiber-Hemlo projects, the First Class Metals portfolio is potentially market leading and we believe will draw considerable interest on listing. 

The team at First Class Metals are doing a very effective job and we continue to work with them where required.

Power Metal as a business has an acquisitive mindset.  However, 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 as previously announced.

New acquisitions are likely to be restricted to additional projects to add into the FDR UK business in preparation for its planned IPO, new uranium opportunities and potentially additional gold/copper opportunities in North America or Australia.

Should Power Metal encounter exceptional new opportunities outside the above areas it will consider further acquisitions but only on the right commercial terms.  It should be noted that many of the Company’s previous acquisitions have used Power Metal equity as a large portion of consideration.  With the share price trading at a circa 55% discount to the high in January 2021, the Company is reluctant to utilise equity for acquisitions at this time and it makes commercial sense to limit any equity based acquisition approach at current share price levels.

Power Capital Investments  (“Power Capital”) continues to work on a number of initiatives targeting individual or smaller corporate owned opportunities. 

Limited information will be provided in respect of the above Power Capital projects to preserve commercial sensitivity, notably where work is needed to secure exploration licences or to protect commercial partners.

At present none of the Power Capital projects are considered material in the context of the Power Metal business overall.  Should they become so, further disclosures may be necessary.

NOTE: A maximum investment level of £100,000 per opportunity has been established and a minimum 50% Power Capital holding interest in any opportunity following Power Capital’s investment.

The Board currently comprises:

Scott Richardson Brown – Interim Non-executive Chairman

Paul Johnson – Chief Executive Officer

Ed Shaw – Non-executive Director

Power Metal is seeking to appoint new board members and expects to make additional announcements in this regard in the current quarter.

The Company operates a hub and spoke operational management style coordinating and controlling global business operations from its UK operational head office based in Farnborough, UK. 

In 2021 with the growth of our business portfolio, and the success of exploration and commercial ventures, we have built the Head Office team with additional team members covering:

–       exploration management,

–       commercial management,

–       financial and administrative support, and:

–       marketing & communications

We are seeking to optimise resources, and our Head Office team will be deployed to support Power Metal central activities and also to support spin-out vehicles, managerially and administratively, sharing the Power Metal team operational costs with spin-out vehicles.

Power Metal is actively seeking to bring new team members in to support the growth in business activities and has launched a “Join-Us” page on the Company’s website with further details.  This may be viewed through the following link:

https://www.powermetalresources.com/join-us/

Power Metal Financial Assets

The core of the Company’s assets, as with many other exploration companies, is a portfolio of capitalised project acquisition and exploration costs for ongoing projects or loans to subsidiary companies in respect of project expenditure (“Project Assets”).

As at 30/11/2021 the Project Asset value was £3,354,847 in the Company’s internal unaudited management accounts.

The Company’s assets also include the planned spin out/disposal project vehicles (“Pre-IPO Assets”) which includes:

–       First Class Metals (Hemlo-Schreiber projects sold to FCM Sept 21)

–       Golden Metal Resources (Nevada exploration/development)

–       First Development Resources (Australia exploration)

–       New Ballarat Gold Corporation (Australia exploration). 

Each spin-out/disposal, on successful listing is expected to add material value to the Company’s balance sheet.

As at 30/11/2021 the Pre-IPO Asset value was £3,709,777 in the Company’s internal unaudited management accounts. This value does not include the valuation uplift from acquisition cost to pre-IPO value.

Power Metal also holds listed investments including shares and warrants of currently listed junior resource companies (“Listed Assets”). The Listed Assets are readily tradable and provide the Company with a source of cash if needed.

As at 30/11/2021 the Listed Asset value was £1,079,128 in the Company’s internal unaudited management accounts.

In addition to the above the Company maintains material cash balances which includes GBP, USD, CAD, AUD and Pula currencies (“Cash Assets”).

As at 30/11/2021 the Cash Asset value was £1,962,561 in the Company’s internal unaudited management accounts (including the November 2021 financing, which was received in full in December 2021).

Overall, as at 30/11/2021 including all categories listed above the total unaudited assets of the Company amounted to £10,106,313.   Note: this asset figure does not include the uplift in value of Golden Metal Resources or First Development Resources to reflect the current pre-IPO valuations of both vehicles, with both vehicles included at acquisition cost only. 

Working Capital

The Company considers Working Capital to be the money available to deploy on payment of corporate operational, notably exploration expenditure.  It comprises cash held and listed investments only and at 30/11/2021 as outlined above amounted to £3,041,689.

As Working Capital management is vital, we monitor this on a weekly basis and as at 31/12/2021 this amounted to £2,907,686.  This is a robust amount of cash and listed investments as the Company enters 2022.

Future Financing Sources

The Company has multiple sources of additional financing. 

As demonstrated in November 2021, traditional equity financing can be undertaken to raise additional sums where considered necessary.

Furthermore, the Company has issued warrant instruments during financings and project acquisition transactions, some of which are currently in-the-money, but most are at higher prices to the current mid market share price. 

In addition, the Company has issued options to management, staff, advisors and consultants, as part of team incentivisation.

Table 1 below provides a full breakdown of all warrants and options outstanding as at 31/12/2021.

The warrants and options above, if exercised in full, will bring £8,406,213 additional cash into the Company, largely at exercise prices considerably higher than the current market share price (or £9,406,213 if Thor Mining plc exercise their 4p warrants within 12 months and exercise replacement warrants at an exercise price of 8p).

In addition to the above, the Company will benefit from the planned listing of four 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. Subject to any applied lock-in on listing, the shares held on IPO will form part of listed asset investments and provide an additional pool of working capital to the Company.

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.  The level of such corporate activity is dependent on demand for new vehicles, predominantly in the London capital markets, and also the level of M&A activity in the junior resource sector.  In the latter regard the Power Metal board, from acquisitive interest already demonstrated across the Company’s portfolio, expect a heightened level of corporate activity in 2022.

Power Metal continues to work with One Advisory, its financial and compliance service partner, to liaise with auditors PKF, and the financial results for the year ended 30 September 2021 are expected to be published in February 2022.

Power Metal continues to bolster its Environmental, Social and Governance initiatives and expects to publish further information in this regard in the coming quarter covering the various measures implemented.

In 2020 the Company undertook a Finance, Administration and Compliance Protocols and Procedures Review to further improve its underlying Governance.  This review is being updated currently to ensure all areas are fully updated with business developments.  As part of this the Company has now completed detailed business process mapping across all key corporate activities.  In addition, Power Metal has recruited a new Commercial Manager onto the team to prepare business organisational structure charts, detailed business process flows, a live corporate and licence database and a full business information managed database.

These measures are considered necessary as the Company expands in size, scale and breadth of corporate and exploration activities.