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Power Metal Resources #POW – Exercise of Ontario Options – Magical and Enable Properties

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce that following due diligence work the Company has exercised its option to acquire both the Magical Property (“Magical”) and Enable Property (“Enable” together the “Properties”) located on the prospective Schreiber-Hemlo Greenstone Belt in north-western Ontario, Canada.

These are the final two of four gold exploration properties upon which the Company signed an exclusive option to acquire a 100% interest (as announced 26 January 2021) and follows the McKellar option exercise and the Coco East option exercise which were announced on 18th and  24th February 2021 respectively.

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

“The exercise of our options over the Magical and Enable properties concludes Power Metals’ current acquisition strategy over the Schreiber-Hemlo Greenstone Belt in Ontario. Power’s portfolio of exploration properties provides us the opportunity to build value, within a 120km strike length, of a prolific exploration belt.

We will now commence a phase of desk-based remote sensing targeting and exploration planning with a view to being in a position to initiate ground reconnaissance and target follow-up work after the snow thaw.  We look forward to providing further updates as plans progress.”

MAGICAL PROPERTY OVERVIEW

–  Magical is located 9km northwest of Barrick Gold Corporation’s Hemlo Mine which has produced more than 21Moz gold and has been operating continuously for more than 30 years1.

–  The property is located upon the North Limb of the Schreiber-Hemlo Greenstone Belt, the property is located at the prospective contact between the intrusive Gowan Lake Pluton and metavolcanic/metasedimentary rock packages, with a similar geological setting to the Hemlo deposit. Magical offers potential for orogenic style gold mineralisation.

–  The regional geophysics data shows a north trending regional scale magnetic structure intersects the intrusion within the centre of the property, defining a preliminary target for investigation.

–  Magical is largely unexplored apart from the easternmost Claim cell where, in 1995, Hemlo Gold Mines Inc drilled an induced polarisation (“IP”) geophysics anomaly. Diamond drill hole V95-2 reportedly intersected a 7m zone of silicification containing sericite and sulphides and 12.6m of feldspar porphyry with disseminated pyrite. 

–  Magical directly abuts and covers the westward strike extension of the Canadian listed junior Hemlo Explorers Inc (TSX-V: HMLO) North Limb Property2 .

MAGICAL CLAIM STATUS

–  The Magical property consists of a total of 14 Single Cell Mining Claims (“Claims”) covering an area of circa 3.0km2.

–  Claims are valid through to 27 July 2022 upon which they can be renewed on an annual basis. For renewal the Magical Claims will require an aggregate work spend of CAD$5,600 (circa £3,145) prior to the individual Claim renewal dates. 

ENABLE PROPERTY OVERVIEW

–  The Enable property is located on the western part of the Schreiber-Hemlo Greenstone Belt, at the contact of metavolcanic and volcano-sedimentary rock packages with the Terrace Bay Batholith. 

–  On a regional scale the Terrace Bay Batholith contact is spatially associated with at least 28 documented gold showings including the Northshore Property which has historical resources of 1.2Moz Au3. Northshore has recently been subject to open pit mining studies and is currently held by Canadian Securities Exchange listed Ready Set Gold Corp. (CSE:RDY).

–  Overburden cover has been attributed to the reason the Enable portion of the batholith contact remains unexplored. This presents an opportunity to discover new gold mineralisation utilising modern exploration technologies.

–  Access to the property is good, being 4km north of the town and railway stop of Terrace Bay and with the Trans-Canada Highway running within 200m of the eastern boundary. The centre of the property is crossed by a public highway with logging roads and a lake providing access to the western part of the property.

ENABLE CLAIM STATUS

–  The Enable property consists of a total of 41 Claims covering an area of circa 8.7km2.

–  Claims are valid through to 25 July 2022 upon which they can be renewed on an annual basis. For renewal the Enable Claims will require an aggregate work spend of CAD$16,400 (circa £9,210) prior to the individual Claim renewal dates.

ACQUISITION TERMS

The vendors of the Option (the “Vendors”) are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021.

In exercising the Option to acquire a 100% interest in the Magical and Enable properties POW will make the following cash and equity consideration:

Property Name

Cash (CAD$)

POW Shares (CAD$)

Note: POW Acquisition Shares to be issued

Total Consideration

(CAD$)

Magical

20,000

20,000

384,000

40,000

Enable

30,000

30,000

576,000

60,000

The POW shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share (“Acquisition Shares”).   The cash costs of the acquisition are funded from Power Metal’s existing Canadian Dollar cash account.

The Vendors retain a 2% net smelter royalty (“NSR”) on each property, Power Metal may purchase 1% of each NSR, at any time, by making a cash payment to the Vendors of CAD$500,000.

The Vendors will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities. 

EXPLORATION PLAN

–  Ongoing exploration spend will be at the discretion of Power Metal as the 100% owner of the properties. 

–  Preliminary exploration work is expected to include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.

–  The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost-effective basis.

Admission and Total Voting Rights

Application will be made for the 960,000 Acquisition Shares to be admitted to trading on AIM, which is expected to occur on or around 4 March 2021 (“Admission”). The Acquisition Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

Following Admission, the Company’s issued share capital will comprise 1,136,877,930 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

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.

Reference Sources

1: Barrick Gold Corporation, Hemlo Project webpage:  https://www.barrick.com/English/operations/hemlo/default.aspx

2: Hemlo Explorers Inc (TSX-V: HMLO) North Limb Property webpage: https://hemloexplorers.ca/projects/hemlo-north-limb/overview/  

3: Mineral resource estimate: Technical Report on the Mineral Resources of the Northshore Property, Thunder Bay Mining Division, Priske Township, Ontario, Canada with an effective date of 28 April 2014, by Giroux Consultants Ltd. and Minorex Consulting Limited.

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)

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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently the subject of drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Stockbox Media interview with Power Metal Resources #POW CEO Paul Johnson

Stockbox Media interview Power Metal Resources #POW CEO Paul Johnson. The projects are discussed, and Paul shares his excitement about the scale of opportunity with the #POW portfolio.

 

Power Metal Resources #POW – Exercise of Ontario Option – Coco East Property

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce that following due diligence work the Company has exercised its option to acquire the Coco East Property (“Coco East” or the “Property”) located on the prospective Schreiber-Hemlo Greenstone Belt in north-western Ontario, Canada.

Coco East is the second of four gold exploration properties upon which the Company has an exclusive option to acquire a 100% interest, (the “Option”) (as announced 26 January 2021) and follows the McKellar option exercise which was announced 18 February 2021.

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

“Exercising the Option over the Coco East Property further strengthens Power Metals’ landholding in Ontario, following directly on from the acquisition of the McKellar Property which was announced last week. 

Coco East is sited upon the eastern end of the Big Duck Lake Porphyry intrusive which is associated with over twenty known gold and/or base metal occurrences including significant gold intersections which were drilled in a neighbouring property during 2017. The property is also directly east of Superior Lake Resources’ Pick Lake / Winston Lake Zinc Project which is currently advancing towards a high grade zinc mine restart.

We are continuing our due diligence review of the remaining two option properties and will provide a further update in due course.” 

COCO EAST PROPERTY OVERVIEW

  • Located upon the Schreiber-Hemlo Greenstone Belt, Coco East sits at the eastern end of a 4.5km long by 1km wide quartz feldspar porphyry intrusion (the ‘Big Duck Lake Porphyry’) that can be associated with up to twenty-two known gold and/or base metal occurrences.
  • Geology of the property consists of  intrusive porphyry, ultramafic, metavolcanic and metasedimentary rock packages prospective for both gold and volcanogenic massive sulphide (“VMS”) style copper-lead-zinc-silver mineralisation.
  • Regional magnetics survey data shows distinct areas of interest within the property including magnetic highs associated with the eastern end of the Big Duck Porphyry and magnetic ridges which may be indicative of structural faulting and deformation associated with the intrusive event.
  • Located approximately 3.5km east of the Coco-Estelle Deposit where diamond drilling during 2017 intersected significant intervals of gold mineralisation including 11m @ 1.96g/t Au from 42m and  5m @ 5.9g/t Au from 63m.1  This is part of the Big Duck Project held by Canada listed CBLT Inc (TSX-V:CBLT) which abuts the Coco western boundary.
  • Also 8.4km east of Australian listed Superior Lake Resources (ASX:SUP) high-grade Pick Lake / Winston Lake Zinc Project which has a Resource of 2.35 Mt at 17.7% Zn, 0.9% Cu, 0.38 g/t Au and 34 g/t Ag and for which a mine re-start Bankable Feasibility Study was published in August 2019. 2
  • Three historical drill holes are known to exist within the centre the property (on three Claims), these were drilled by Falconbridge Copper Corporation in 1984. Drill hole BD6 is reported to have assayed up to 1.74g/t Au although the exact nature of this intersection has yet to be verified by obtaining the historical core logs.  The remainder of the property is considered under explored.
  • Situated approximately 20 km due north of the town of Schreiber, Ontario on the Trans-Canada highway. Access to the property is via an old logging road and all-terrain vehicle (“ATV”) trails. Big Duck Lake is located on the western side of the property.

COCO EAST CLAIM STATUS

–  Consists of a total of 30 Single Cell Mining Claims (“Claims”) covering a total area of circa 6.4km2. 

–  Claims are valid through to 20 August 2022 upon which they can be renewed on an annual basis. For renewal the Coco East Claims will require an aggregate work spend of CAD$12,000 (circa £6,912) prior to the individual Claim renewal dates. 

ACQUISITION TERMS

The vendors of the Option (the “Vendors”) are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021.

In exercising the Option to acquire a 100% interest in the Coco East Property POW will make the following cash and equity consideration:

Property Name

Cash (CAD$)

POW Shares (CAD$)

Note: POW Acquisition Shares to be issued

Total Consideration

(CAD$)

Coco East

30,000

30,000

576,000

60,000

The POW shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share (“Acquisition Shares”).  The cash costs of the acquisition are funded from Power Metal’s existing Canadian Dollar cash account.

The Vendors retain a 2% net smelter royalty (“NSR”) on Coco East,  Power Metal may purchase 1% of the NSR, at any time, by making a cash payment to the Vendors of CAD$500,000. 

The Vendors will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities.

EXPLORATION PLAN

–    Ongoing exploration spend will be at the discretion of Power Metal as the 100% owner of Coco East.

–    Preliminary exploration work is expected to include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.

–   The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost-effective basis.

Admission And Total Voting Rights

Application will be made for the 576,000 Acquisition Shares to be admitted to trading on AIM, which is expected to occur on or around 2 March 2021 (“Admission”). The Acquisition Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

Following Admission, the Company’s issued share capital will comprise 1,133,718,730 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

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.

Reference Sources

1: GTA Resources and Mining Inc announcement, 29 January 2018 https://www.gtaresources.com/assets/jan-29-2018-big-duck-final-re-run-gold-sample.pdf

2: Superior Lake Resources Pick Lake / Winston Lake Zinc Project: https://superiorlake.com.au/pick-lake-winston-lake-zinc-project/#:~:text=The%20Project%20is%20a%20high,ASX%20announcement%2028%20August%202019

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)

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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently the subject of drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Power Metal Resources #POW – Audited Results for the Year Ended 30 September 2020

Power Metal Resources plc (LON:POW), the AIM listed mineral resources exploration and development company, is pleased to announce its consolidated audited results for the year ended 30 September 2020 for the Company and its subsidiaries, Cobalt Blue Holdings (“CBH”), Regent Resources Interests Corp. (“RRIC”), and Power Metal Resources SA, (“PMR”), (together the “Group”).

Highlights from the year under review:

Operational

  • A strategic Australian gold joint venture was formed with Red Rock Resources plc (LON:RRR), with Power Metal Resources holding 49.9%.  By year end the joint venture holding company, Red Rock Resources Australasia (Pty) Limited (“RRAL”) had lodged 12 licence applications covering some 2,188 km2 in the Victoria goldfields region. Various technical work was completed in the year including project reports for 11 of the licence applications and a National Instrument 43-101 report for 8 of the licence applications as a group. A new office was secured in Ballarat town and an exploration manager appointed to the joint venture company;
  • Following completion of ground geophysics in 2019 and the delineation of key drill targets, Power Metal Resources elected on 31 December 2019 to earn in to a 40% project holding at the Molopo Farms Complex Project, Botswana by expending US$500,000 on exploration, notably key target drilling in 2020.  A maiden drill programme commenced in October 2020;
  • A new strategic joint venture was formed between Power Metal Resources and Kavango Resources Plc (LON:KAV) in respect of the Kalahari Copper Belt and Ditau Camp Projects in Botswana, with each party having a 50% interest;
  • Review work was undertaken in respect of the exploration and commercialisation options in respect of the Cobalt Blue nickel/cobalt project in Cameroon. No formal conclusions as to the way forward were reached in the financial year, with deliberations continuing post year end and leading to a decision to impair the value of the of the Cameroon project in full (£970,000);
  • A new earn in agreement was formed over the Silver Peak Project, including a former working silver mine, in British Columbia, Canada.  Due diligence programme sampling demonstrated bonanza grade silver from channel sampling;
  • A pitting, sampling and mapping work programme was undertaken successfully at the Kisinka Project in The Democratic Republic of the Congo. X-ray fluorescence testing of the samples confirmed the presence of copper, with samples dispatched to South Africa for analysis and results received post year end.  The results announced in November 2020 demonstrated high grade copper and cobalt values; 
  • Power Metal Resources increased its interest in the Haneti Nickel Project by 10% to 35% in the financial year and worked with joint venture partner AIM Listed Katoro Gold plc (LON:KAT) to plan for commencement of maiden drilling for nickel sulphide and Platinum Group Metals (“PGMs”) at the Project;
  • An agreement was signed in respect of the Alamo Gold Project in Arizona USA which saw Power Metal Resources acquire an option to earn in to a maximum 75% interest in the project.  An initial reconnaissance survey conducted following the acquisition identified additional prospective areas which were pegged and added to existing claims, increasing the project footprint;
  • A further strengthening of the Board saw Edmund Shaw, an experienced City finance professional, join the Board as Non-executive Director in February 2020;
  • At the year-end 30 September 2020 the Company held a private and listed shares/warrants portfolio worth circa £1,481,000, including a £415,000 fair value uplift in the valuation of the portfolio of listed investments in other junior natural resource companies held by the Company over the course of the year;
  • · At the year end the Company held cash in GBP, USD, AUD and CAD of £913,000 in GBP equivalent.

Financial

  • Loss for the year to 30 September 2020 of £1.4 million (2019: £1.6 million);
  • Pre non-controlling interest total equity of £3.6 million at the year-end (2019: £1.8 million); and
  • Raised £1.7 million (before issue costs) in new equity financing during the financial year, from a combination of new and existing shareholders, including the Directors, and an additional £266,000 of cash received by the Company during the year from exercises of Power Metal share warrants.

Post-year end

Expansion of exploration and activity across the Company’s project portfolio including:

  • Drilling programme commencement at the Molopo Farms Complex Project in Botswana (announced 15 October 2020), the Silver Peak Project in Canada (announced 10 November 2020) and the Haneti Nickel Project in Tanzania (announced 30 December 2020);
  • Next stage exploration programmes commenced at the Kalahari Copper Belt and Ditau Projects in Botswana, the Alamo Gold Project in Arizona, USA and the Kisinka Project in The Democratic Republic of the Congo (“DRC”);
  • Continuation of corporate activities since the year end with participation in a rights issue for Kalahari Key Mineral Exploration (Pty) Limited and expansion of the Australian Gold Joint Venture with an application to increase the JV footprint by a further 148 km2 surrounding the Ballarat mine area; and
  • Option agreement signed in January 2021 providing 60 business-days for due diligence which if successful would lead to the acquisition of First Development Resources Pty Limited, a private Australian company with copper-gold exploration interests in Paterson Province, Australia.
  • Agreement signed by Power Metal Resources in January 2021 to acquire a package of gold exploration properties in Ontario Canada, followed by an option agreement providing 30 days for due diligence which if successful would lead to the acquisition of four additional exploration projects also in Ontario, Canada. In February 2021, the Company announced it had exercised the Option to acquire the McKellar Property by transferring total consideration of CAD$100,000 in cash and shares;
  • In February 2021 RRAL received confirmation that three licence applications had been granted enabling the commencement of ground exploration in the Victoria Goldfields, Australia;
  • In February 2021, the Company announced, subject to shareholder approval, a capital reduction to take place in order for distributions to be made to shareholders; and
  • Warrant exercises since the year end have raised a further £2,638,470 for the Company. 

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

“The audited results for the year ended 30 September 2020 demonstrate the pace of business development at Power Metal.   

In the previous financial year the Company emerged from the refinancing in February 2019 with a new sense of energy and a promise to deliver an exciting investment proposition in resource exploration and development.  As at today’s date Power Metal is a global exploration company with precious and base metal projects across three continents.

Much of the development achieved in the Company was undertaken in the year ended 30 September 2020 and since then we have seen the launch of proactive exploration and corporate activities across multiple projects including district scale opportunities.

Power Metal is well funded with a strong working capital position and an objective to continue to build our “balance sheet” working capital to move the Company toward financial self sustainability.

We believe that 2021 and the coming years presents a great opportunity for junior resource opportunities and where possible we intend to take full advantage.”

Notice of Annual General Meeting and Distribution of Accounts to Shareholders 

The Company’s Annual General Meeting will take place at 11.00 am on 30 March 2021 at Abbey House, 282 Farnborough Road, Farnborough, Hampshire, GU14 7NA.  The Company’s Annual Report and Accounts for the year ended 30 September 2020 will be posted to shareholders this week. Copies of the Notice of AGM and the Annual Report and Accounts will also be available on the Company’s website at www.powermetalresources.com in due course.

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. 

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 20 7583 8304

SP Angel Corporate (Nominated Adviser and Broker)

Ewan Leggat

+44 (0) 20 3470 0470

SI Capital Ltd (Broker)

Nick Emerson

+44 (0) 1483 413 500

First Equity (Joint Broker)

David Cockbill/Jason Robertson 

+44 (0) 20 7330 1883

Power Metal Resources #POW – Botswana Molopo Farms Complex – Drilling Update

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to provide a further update from the Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key”) Molopo Farms Complex Project (the “Project” or “MFC Project”), which is targeting prospective massive nickel sulphide and platinum-group metal (“PGM”) mineralisation in Botswana.

Paul Johnson Chief Executive Officer of Power Metal Resources commented:

“Identification of additional visible sulphides deeper in hole KKME 1-6 gives further encouraging signals to the prospect of discovering significant mineralisation within the Molopo Farms Complex.

So far we are encouraged by the indications from core logging, and await assay results and mineralogical studies to confirm the sulphide minerals present. To be absolutely clear we make no assumption as to which sulphide minerals are present and await the assay results, and those results will likely guide the next exploration steps.

The identification of up to 14 new targets for ground exploration in the feeder zone from the Aster Mapping also adds to the evidence of district scale prospectivity.

Substantial new data continues to be generated on a relatively untested environment, advancing a journey of discovery in a geological setting where there is the clear potential for large scale metal deposits.”

Highlights:

  • The second diamond drill hole at the MFC Project, KKME 1-6, has been continued from 547m to a  final depth of 598 metres in ultramafic rocks.  The extra hole depth will provide further core from the geophysical target depth and will assist in further geophysical interpretation.
  • Core from KKME 1-6 and from the first drill hole at KKME 1-14 has been transported to Lobatse where it is being cut by the Botswana Geoscience Institute. Selected half core samples will be sent to a South African assay laboratory for base and precious metal analysis, this week. 
  • Logging KKME 1-6 cut core has identified disseminated sulphide mineralisation below 500m drill hole depth, notably in the section marked as a target by the geophysics. This is further to disseminated sulphide mineralisation identified around 308-313m drill hole depth from the initial KKME 1-6 core inspection (announced 11 January 2021). 
  • An agreement has been signed with the University of Witwatersrand in Johannesburg and selected quarter core samples will be sent to the University’s Geology Department this week for mineralogical and thin section analysis. 
  • A report received from Aster Funds Ltd (“Aster”) based in Toronto entitled ‘Satellite-Based Long Wave Infrared (LWIR), Short Wave Infrared (SWIR) and Synthetic Aperture Radar (SAR) Mapping, Molopo Farms Exploration Licences has identified about 14 new targets in the feeder zone, with priority targets recommended to be ranked for follow-up ground exploration.
  • Down-hole geophysics data is expected to be acquired in the next phase of the current programme, this should help identify any massive sulphide mineralisation proximal to the  disseminated sulphides encountered at around 308-313m drill hole depth and below 500m drill hole depth, in angled hole KKME 1-6.

OWNERSHIP STRUCTURE – MOLOPO FARMS COMPLEX PROJECT

Power Metal currently has an 18.26% shareholding in Kalahari Key and has elected to earn in (“Earn-In”) to a 40% direct interest in the MFC Project by funding US$500,000 of exploration expenditure by 30 April 2021, notably the diamond drilling of selected targets (the “Drill Programme”).  To date Power Metal have paid US$392,641 leaving a balance remaining of US$107,359 (approximately £76,801) which is fully covered by Power Metal cash resources.

THE DRILL PROGRAMME

The Drill Programme was for an initial planned 2,505m across four diamond core drill holes with planned target hole depths varying from 525m to 710m.  Ultimate meterage to be drilled will be determined in due course.

The Drill Programme is designed to intersect four high priority targets prospective for massive nickel sulphide mineralisation, delineated by both Time Domain Electromagnetic (“EM”) and Natural Field Audio Magneto Telluric (“NF-AMT”) geophysics surveys.

DRILL HOLE KKME 1-14

The first drill hole KKME 1-14 at the MFC Project attained a target depth of 515.8m.  The hole was completed safely and securely and achieved near 100% core recovery. 

KKME 1-14 was sited in the Jwaneng-Makopong Shear/Feeder zone to the east of the main Molopo Farms Complex intrusion.

KKME 1-14 supports the geological proposition that the geology at Molopo Farm is that of a feeder zone.

DRILL HOLE KKME 1-6

Hole KKME 1-6, the second hole, attained a target depth of 597.8m. The hole was designed to intercept the upper side of a conductive body modelled from geophysical survey data to commence around 500m down-hole depth.

KKME 1-6 is located in the project’s Tshepo (Hope) Central Target Area, approximately 20km west-southwest of the programme’s first drill hole KKME 1-14 and along strike on the shear zone interpreted as the Molopo Farms Complex Feeder Zone.

The Tshepo (Hope) Central Target Area lies within the centre of the interpreted feeder zone inside the near-surface sub-crop of the Molopo Farms Complex in Licence PL311/2016.

FURTHER INFORMATION

Kalahari Key have signed agreements with Aster Funds Ltd (“AFL”) and Bell Geospace Ltd (“Bell”) to integrate innovative exploration survey and processing techniques with the existing Kalahari Key airborne, AMT ground and downhole geophysical datasets with a view to accelerating and refining the exploration targeting process for future drill testing.

AFL employ satellite-based Aster Thermal Imagery to provide target mapping through longwave infra-red (“LWIR”) and shortwave infra-red (“SWIR”) Spectral Analysis and electromagnetic (“EM”) conductivity analysis based on Synthetic Aperture Radar. These systems complement Kalahari Key’s geophysical datasets and will help in the rapid determination of both the near-surface geology and alteration minerals which could be linked to underlying mineralised systems.

The collaboration with Bell will facilitate the integration and analysis of the KKME airborne and ground geophysical data with Bell’s high-resolution Zeppelin airship-supported gravity data collected over the three Kalahari Key Molopo Farms Complex licence areas (PL202/2018, PL310/2016, PL 311/2016). 

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/ 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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently subject to drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Power Metal Resources #POW – Warrant Update & Extension of Insider Warrants

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide a warrant update for shareholders.

Update Regarding Exercise of Warrants Expiring February 2021

On 18 February 2019 the Company issued warrants (the “February 2019 Warrants”) as part of the refinancing of the Company as outlined below:

Description

Number of Warrants

Exercise Price

Financing Warrants

200,000,000

1.0p

Advisor Warrants

5,000,000

1.0p

Debt Settlement Warrants

6,000,000

0.5p

All February 2019 Warrants carried a two-year life which ended yesterday on 18 February 2021.

Power Metal can now confirm that, save for the 40 million Financing Warrants held by insiders and connected parties, further details of which are provided below (the “Insider Warrants”), the Company has received valid exercise notices for 100% of all the February 2019 Warrants.

The Company is currently processing exercise notices and will provide an Exercise of Warrants market announcement in the coming days. 

Warrant Exercise Proceeds and Working Capital Summary

In total the exercise of the February 2019 Warrants to date has raised an additional £1.68 million for the Company and in total all warrant exercises in 2020/2021 have raised circa £2.9million. 

This inflow of monies has significantly increased the Company’s working capital, including cash and listed investments, which currently stands at circa £3.28 million.

Extension of Insider Warrants

As at 18 February 2021 the following February 2019 Warrants held by Directors or their related parties  remained outstanding (“Insider Warrants”):

Warrant Holder

N umber of Warrants

Exercise Price

Paul Johnson

10,000,000

1.0p

Andrew Bell

10,000,000

1.0p

Red Rock Resources plc

20,000,000

1.0p

The Insider warrants were issued following participation in the February 2019 Financing.

The Company is currently finalising its audited financial statements for the year ended 30 September 2020, which Power Metal expects will be announced to the market in the week commencing 22 February 2021, consequently the Company is in a close period.

In addition the Company is currently managing numerous exploration programmes and corporate activities across its portfolio, including matters pertaining to its Australian gold joint venture, Red Rock Australasia Pty Limited, in which the Company holds a 49.9% interest (with joint venture partner Red Rock Resources plc (LON:RRR) holding 50.1%).

As a result, the February 2019 Warrants held by Paul Johnson (Chief Executive Officer of Power Metal), Andrew Bell (Chairman of Power Metal and Red Rock Resources plc) and those held by Red Rock Resources plc, could not be exercised on the expiry date of 18 February 2021 and may be extended under the warrant instrument, as outlined below.

Under the February 2019 Warrant instrument clause 2.3 provides that should any February 2019 Warrant holder be in the possession of price sensitive information and be thereby precluded from exercising warrant subscription rights, the exercise period shall be extended until 20 business days following the date on which the Warrant holder ceases to be an insider.

Given the level of ongoing operational activity there is a material likelihood that the receipt of price sensitive information could frequently restrict the ability of Paul Johnson, Andrew Bell and Red Rock Resources plc to exercise the February 2019 warrants.

Reflecting the above the Company has extended the Insider Warrants expiry date by three months to a new expiry date of 18 May 2021. 

RELATED PARTY NOTE

The extension of the Insider Warrants held by Paul Johnson, Andrew Bell and Red Rock Resources Plc as outlined above, have been treated as a related party transaction for the purposes of AIM Rule 13.  

Scott Richardson Brown and Edmund Shaw, being the independent Directors for the purposes of the extension of the expiry date of the Insider Warrants held by Paul Johnson and Andrew Bell and Red Rock Resources Plc consider, having consulted with the Company’s nominated adviser, SP Angel, that the extension of the warrant expiry date to 18 May 2021 to such related parties is fair and reasonable insofar as the Shareholders are concerned.

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)

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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently subject to drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Power Metal Resources #POW – Exercise of Ontario Option – McKellar Property

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce that following due diligence work the Company has exercised its option to acquire the McKellar Property (“McKellar”) located on the prospective Schreiber-Hemlo Greenstone Belt in north-western Ontario, Canada. McKellar is one of four gold exploration properties upon which the Company has an exclusive option to acquire a 100% interest (as announced 26 January 2021).

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

“Exercising the option over the McKellar Property strengthens Power Metals’ landholding over a part of Ontario which is currently seeing heightened junior exploration company activity. 

Our due diligence data review has shown McKellar complements Power Metal’s existing Dotted East, Olga Lake and Roger Lake Projects, notably adding ground with indications of VMS style mineralisation sited in association in a structurally prospective fold-hinge setting.

We are continuing our due diligence review of the remaining three option properties and will provide a further update in due course.”

MCKELLAR PROPERTY OVERVIEW

–  McKellar covers the under explored core of a geologically prospective regional scale anticlinal fold hinge structure. Located upon the Schreiber-Hemlo Greenstone Belt the geology of McKellar consists metavolcanic and metasedimentary rock packages prospective for both gold and volcanogenic massive sulphide (“VMS”) style copper-lead-zinc-silver mineralisation. 

– The property includes several strong Versatile Time Domain Electromagnetic (“VTEM”) geophysics anomalies identified by survey work in 2007, these anomalies have either not yet been drill tested or were inconclusively drilled by shallow holes or trenched by previous claim holders.

– The most recent work within the property was undertaken in 2017, this included soil sampling, outcrop sampling and geological mapping.  This work identified an hitherto unmapped exhalative rock unit and geochemical alteration prospective for VMS mineralisation with sample assay data indicating anomalous Au, Zn, Mn, Cd and Ba associated with an undrilled VTEM anomaly.  This work concluded further fieldwork with follow-up ground induced polarisation (“IP”) geophysics and drill testing could be warranted.

– Historical sampling undertaken by Noranda Exploration Company Ltd in 1989 at the historical Little Pick Silver Mine reported a channel sample of 1.4m @ 13.0% Zn, 7.1% Pb & 678.0 g/t Ag and a trench sample of 1.1m @ 32.3% Zn, 1.1% Pb & 68.4 g/t Ag, with the VMS style mineralisation reportedly being traced over a 600m strike.

– Located approximately 50 km east of the town of Schreiber and 40 km NW of the town of Marathon, Ontario on the Trans-Canada highway. Access within the property is afforded by all-terrain vehicle (“ATV”) trails. A major power line and the Canadian Pacific railway occur within 1 km of the property.

MCKELLAR CLAIM STATUS

– Consists of a total of 58 Mining Claims (“Claims”) (49 Single Cell Mining Claims and 9 Boundary Cell Mining Claims) covering a total area of circa 12.3km2.

– Claims are valid through to between 7 June 2021 to 26 April 2022 upon which they can be renewed on an annual basis. For renewal the McKellar Claims will require an aggregate work spend of CAD$23,600 of which CAD$15,200 has already been applied.  Therefore, an additional net aggregate work spend of CAD$8,400 (circa £4,838) is required prior to the individual Claim renewal dates. 

ACQUISITION TERMS

The vendors of the Option (the “Vendors”) are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021.

In exercising the Option to acquire a 100% interest in the McKellar Property Power Metal will make the following cash and equity consideration to the Vendors.

Property Name

Cash (CAD$)

POW Shares (CAD$)

Note: POW Shares

Total Consideration

(CAD$)

McKellar

50,000

50,000

960,000

100,000

The Power Metal shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share (“Acquisition Shares”).   The cash costs of the acquisition are funded from Power Metal’s existing Canadian Dollar cash account.

The Vendors retain a 2% net smelter royalty (“NSR”) on McKellar,  Power Metal may purchase 1% of the NSR, at any time, by making a cash payment to the Vendors of CAD$500,000. 

The Vendors will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities.

EXPLORATION PLAN

–  Ongoing exploration spend will be at the discretion of Power Metal as the 100% owner of McKellar.

–  Preliminary exploration work is expected to include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.  

–  The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost-effective basis.

Admission And Total Voting Rights

Application will be made for the 960,000 Acquisition Shares to be admitted to trading on AIM, which is expected to occur on or around 25 February 2021 (“Admission”). The Acquisition Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

Following Admission, the Company’s issued share capital will comprise 1,119,992,730 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

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/   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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently the subject of drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Power Metal Resources #POW – Shareholder Distributions Update

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce it is to take steps to enable the Company to make distributions to shareholders.

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

“Power Metal continues to advance its business model centred around two key objectives, namely, to seek large scale metal discoveries through project exploration and to pursue financial self-sufficiency by building the Company’s “balance sheet” working capital.

We have made a good start and as of close of business on Friday 12 February 2021 the Company’s working capital including cash and listed investments amounted to circa £2.98 million.  The Company has no debt and is either on track or ahead of schedule with project funding requirements.

We now have ground exploration underway across multiple projects and expect to deliver a series of technical findings to the market, including the results of drill programmes, in the near future. 

With extensive exploration now underway we are also undertaking corporate work that we expect will see some of the Power Metal interests spun-out into their own vehicles listed on recognised stock exchanges in North America and the UK.  This will help us to organically build our working capital by exchanging certain project interests for a blend of shares and warrants in the listed entities, and various project level financial interests such as royalties in spun out projects.

Alongside building corporate working capital, and dependent on the quantum of any proposed spin out transactions the Company may wish to undertake distributions to shareholders.  To enable distributions to occur the Company must take certain preparatory steps which are outlined in further detail below”.

BACKGROUND

Within Power Metal’s project portfolio there are a number of business interests where the Company is considering disposals, joint ventures or other commercial agreements. This includes business interests that may become the subject of disposal into separate listed vehicles.

As payment in respect of commercial transactions the Company would expect to receive a financial return which will likely include a combination of cash, shares, warrants, royalties or similar.

The receipt of cash and other assets will help to achieve the Company’s objective of building working capital toward financial self-sustainability.  However, the Company may also wish to distribute cash or blocks of shares issued as consideration to Power Metal shareholders and with that in mind we need to take steps to enable the Company to have the ability to undertake distributions.

At present the Company has carried forward losses and under UK company law cannot undertake distributions unless it undertakes what is technically called a Capital Reduction process (see below).

This process first requires the approval of shareholders at a General Meeting which we intend to undertake in due course, possibly in conjunction with the Company’s Annual General Meeting following the release of the audited Financial Results for the year ended 30 September 2020.  In addition, the Company has to secure approval from the High Court of England and Wales (the “High Court”), further details of which are provided below.

Overall, this is a modest cost exercise and the Power Metal Board consider it should be undertaken to put the Company in a state of preparedness for any potential future shareholder distributions.

The taking of these measures does not imply that the Company intends to make such distributions in the near future.

CAPITAL REDUCTION (the process required to enable shareholder distributions to be undertaken)

The intention of the Company is to undertake a Capital Reduction exercise (the “Capital Reduction”) to implement a reduction in the share capital of the company by cancelling the existing deferred shares and reducing or cancelling the share premium account.

The Capital Reduction is a standard and largely administrative process and will not change the number of ordinary shares in issue.

The Capital Reduction when complete simply permits a company carrying historical retained losses to distribute cash or other assets to shareholders.

This could not be done otherwise because UK company law prohibits such distributions when a company’s accounts show historical retained losses.

In order to undertake the proposed Capital Reduction, the Company will require shareholder approval at a General Meeting (“GM”).  Further details on this GM will be announced in due course when the documentation has been prepared.

In addition, the Capital Reduction requires High Court approval and the Company’s lawyers will undertake this element on behalf of the Company.

Following and subject to shareholder and High Court approval, and compliance with the court order so issued from the High Court, the Company would be able to pay dividends or make distributions to shareholders.

DISTRIBUTION POLICY

The Company’s initial priority is to build its “balance sheet” working capital through spin outs to further increase the financial strength of the Company.

Thereafter and subject to the approval of shareholders and the High Court of the Capital Reduction, the Company may wish to distribute cash or other assets to shareholders. This may occur in various circumstances and could include where the Company disposes of an interest or interests for cash or equity and wishes to return some of the value generated to shareholders. Such distributions may also require further shareholder approval under market rules.

To be clear any such distributions would only be made by reference to shareholders on the register at a specified record time and date.

The Company reserves the right to announce distributions without notice and it is the Company’s intention that, subject to relevant laws and regulations, any distribution announcement will incorporate a contemporaneous record date.

DISTRIBUTION TAXATION REVIEW

The Company is to undertake a full review of taxation in respect of distributions to ensure the optimal distribution strategies whilst remaining in full compliance with UK tax law.

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)

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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metal exploration in North America and Australia together with base and strategic metals exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently subject to drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

Power Metal Resources #POW – Discovering Large Scale Metal Deposits Around The World

Brand CEO Alan Green talks to Power Metal Resources #POW CEO Paul Johnson. Paul lays out the medium and long term strategy. for the company, before running through each project, including the Red Rock #RRR Australasia RRAL JV, Paterson Province Australia, the Botswana KCB and Ditau joint ventures with Kavango Resources #KAV, & Molopo Farms project, the Cameroon Cobalt project, the Canada Silver Peak and new Hemlo Gold belt projects, the DRC Kisinka Copper project, the Haneti Nickel JV with Katoro Gold #KAT in Tanzania and the Alamo Gold project in the USA. Paul discusses the strong funding position enjoyed by Power Metal, and explains how being a major shareholder in the company is his key motivation. We end with some key takeaway points for investors to consider.

Power Metal Resources #POW – Australia Gold Joint Venture – Exploration Commences

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce an update in respect of Red Rock Australasia Pty Ltd (“RRAL”) a joint venture company with gold exploration interests near the historic mining centre of Ballarat in the Victoria Goldfields.

Power Metal has a 49.9% interest in RRAL, with Red Rock Resources plc (LON:RRR)  holding a 50.1% interest.

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

“As promised with the grant of licenses as announced yesterday RRAL have moved quickly to launch ground exploration with further information on the initial programmes outlined below.

Given over 12 million ounces of mined gold in the Ballarat West and Ballarat East mining camp, we are particularly eager to expedite exploration as RRAL targets a major gold discovery in the Victoria Goldfields, Australia.”

Background

RRAL announced on 2 February 2021 the grant of three of its exploration licence applications in Central Victoria, Australia – EL007271, EL7281 and EL7285.

The granted tenements comprise approximately 215km2 and form a key part of RRAL’s central to south Ballarat project group.  These tenements (along with current applications) surround and overlie the existing Ballarat West and Ballarat East mineralized lode systems – a mining camp reported to have produced over 12 million ounces.  Modern production continues today at the Ballarat East mine.

RRAL is beginning work immediately on evaluating previously identified areas of interest within all tenements.  A map showing the granted licenses and providing the location of prospects named below may be viewed on the POW website through the following link:

https://www.powermetalresources.com/p/238/exploration-map-1

INITIAL TARGETED EXPLORATION PROGRAMME

Granted License EL007271

Coincident geochemical and radiometric anomalies from early work along with historical reconnaissance mapping and sampling has already identified three strong prospects in EL 007271 to the south of Ballarat.  These prospects are considered as possible southern extensions to the main lode systems of Ballarat.  All three (O’Laughlin, Scotsburn and Enfield) are a high priority for immediate work.

The O’Laughlin prospect is coincident with a broad potassic anomaly and weakly anomalous geochemical signature.  It covers minor hard rock historical workings that remain largely undocumented whilst areas of alluvial workings exist in the valleys on the side of the main ridge confirm the likelihood of gold shedding from within the prospect area.  Nearby, Scotsburn displays a similar geochemical and radiometric signature and sits north along strike from O’Laughlin.

The Scotsburn prospect comprises a more consolidated line of workings for over a kilometre to the well-known Locomotive Extended mine and shafts north of Buninyong (southeast of Ballarat).

The Enfield prospect (or Monmouth prospect) covers the historical area of the Monmouth and Happy Thought mines which are also largely undocumented however the prospect area is considered potentially to cover the southern extension of the Ballarat West lode system.

RRAL has already initiated a comprehensive soil sampling program over the areas in conjunction with detailed field mapping. The sampling is using both traditional MMI (mobile metal ion) low level analytical methods as well as evaluating the efficacy of portable XRF as a cost-effective alternative allowing a significantly higher number of samples to be collected with a shorter turnaround for results. In conjunction with the extensive soil sampling, field mapping and discrete sampling of quartz veins both within workings and newly identified at surface will be undertaken. It is anticipated that the outcomes of the first phase of exploration, if successful, will lead to confirmation that significant mineralization is present and will allow drilling to commence later in the year.

Granted License EL 007285

To the north EL007285 is considered to hold the northern extension of the Ballarat West lode system and further work on compiling historical data into a 3D model to facilitate drill planning is under way.

Satellite Data Analysis

A further exploration tool in use is satellite data from the Aster and Sentinel-2 satellites, where using machine learning, our consultants have trained five statistical classifiers, called Linear Discrimination Functions (LDFs), on the Au occurrences to recognize gold mineralization from 16 spectral abundances unmixed from the Aster mosaic, and have similarly created a classifier from the ten reflective bands (unmixed into 16 spectral abundances) from the Sentinel data.

This satellite thermal and high spatial resolution VNIR/SWIR (visible and near-infrared/short-wave infrared) imagery may be used to extrapolate gold occurrence information out to the rest of the project area. Identification of minerals in the scene from spectral unmixing may also inform geological understanding of the area.

This extra exploration layer, continuously refined, along with geophysics, geochemistry and geological interpretation may improve drill targeting and the odds of discovery in a brownfields environment such as the Ballarat Gold Fields

THE BALLARAT PROJECT AREA

Geology

In general terms, the geology of the Ballarat South project comprises a thick sequence of Ordovician turbidite sediments. The sediments have been folded and subsequently faulted under east/west compression.  During the compressional phase, some brittle deformation occurred, resulting in the development of several reverse faults.

These reserve faults as well as bedding plane slip within shales have acted as conduits for fluid flow from within the metamorphosed sedimentary pile.  Gold hosted quartz veins formed as a result, often in complex arrays of orientations within a broadly mineralized envelope.

Overlying the sediments in part is extensive flows of Tertiary age volcanism.

Previous Exploration

The Ballarat region has seen exploration activity since the initial discovery of gold in the 1850s with mining progressing from surface alluvial mining to deep lead mining to some hard rock mining over a period of 80 years. From the 1980s onwards interest in the area renewed as explorers completed first phase surveys including broad airborne geophysical surveys, soil sampling, and mapping.

Their work included minor exploration drilling focused largely upon the Ballarat East and West lodes.  Whilst they did identify numerous other targets, limited technology for evaluating mineralisation beneath the cover particularly the lava flows restricted much of the exploration.  This coupled with a fluctuating gold price has left much of the region surprisingly underexplored.

As a result, RRAL can now capitalize on the positive results reported in the previous literature and continuously learn from the progress of current exploration in the region, and is fast tracking exploration efforts with an initial focus on already identified prospects.

FURTHER INFORMATION

Joint Venture Company – RRAL

RRAL is a joint venture company 50.1% owned by Red Rock and 49.9% owned by Power Metal Resources plc (“POW”). Paul Johnson, CEO of POW and Andrew Bell are directors of RRAL.

Applications

RRAL has lodged applications for sixteen new gold exploration license areas covering approximately 2,336 km2 in the Victoria Goldfields of Australia as follows:

License Application Number

Project Name

Area (km2)

EL007271

(granted)

Blue Whale

133

EL007281

(granted)

Blue Chip

74

EL007282

Blue Sky

489

EL007285

(granted)

Blue Ribbon

8

EL007294

Red Queen

130

EL007301

Mt Bute

85

EL007327

Blue Stocking

60

EL007328

Blue Yonder

168

EL007329

Evergreen

486

EL007330

Blue Angel

202

EL007385

Sardinia

  4

EL007460

Kilmore West

349

State land within EL007271

 

[EL007505

EL007506

EL007507]

 

 

[9

9

8]

EL007540*

(3 competing applications)

Outer Ballarat

148

Total

c 2,336

 

* Balmaine Gold Pty Ltd, Mercator Gold Australia Pty Ltd, and Loddon Gold Pty Ltd have put in competing applications the same day as RRAL for the ground covered by EL007540. The application considered to have greatest merit will eventually be given priority.

The technical information relating to planned exploration in this report is compiled by David Holden, BSc, MBA, MEM,  who is a member of the Australian Institute of Geoscientists. Mr Holden has experience in the style of mineralisation and type of deposit under consideration. Mr Holden is the Exploration Manager of RRAL.

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)

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 (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious metals exploration in North America and Australia together with base metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage prospects currently subject to drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company’s position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.

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