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Power Metal Resources #POW – Business Financial Review and Warrant Update

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

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

“Power Metal has multiple exploration programmes underway alongside significant corporate activities in and around certain of our projects.

Given the extent of our activities I would like shareholders to also know that your Company is in a strong financial position and is well funded to complete all its currently planned exploration work, including drilling programmes underway at present.

Moreover, after the current programme of extensive exploration activities to 31 March 2021 are complete and paid for, the Company will still have significant financial resources and remain in a strong position.  This is further explained below with information regarding where we are with business operations, key financial exploration commitments and our underlying financial position.

In addition, I would draw shareholders attention to the “Warrant Update” section below which confirms Power Metal has successfully exceeded the price hurdle to enable acceleration of certain warrants.  Recognising Power Metal’s strong financial position we consider there is no requirement to exercise any right to accelerate warrants at this time.

Finally, the Company notes that in the Final Results for the year ended 30 September 2019 (announced 20 May 2020) reference was made to a planned fundraising in November 2020.  Given the £1 million raised in July 2020 and the receipt of warrant exercise monies since August, there was no need to undertake a fundraising in November 2020.”

BUSINESS AND FINANCIAL REVIEW

Power Metal’s working capital position as at 12 January 2021 was circa £2.72 million including Pounds Sterling, US Dollars, Australian Dollars and Canadian Dollars and the current value of the Company’s listed investments. Power Metal has no debt, and all trade creditor invoices received by 12 January 2021 have been deducted from the working capital figure above.

The Company’s anticipated exploration and corporate spending for the period to 31 March 2021 is currently estimated at circa £0.6 million and as a result following the completion of the period to 31 March 2021 the Company expects to still hold a robust working capital position.

The table below provides a further breakdown of the current operational and the cash funding position of each project in the Power Metal portfolio. For specific larger expenditure items we provide information of the cash commitments expected in the period to 31.3.21.

The inclusion of the table below is designed to increase transparency and detailed disclosure for shareholders enabling a fuller understanding of the cash requirements of the business in the coming months and helping to validate the strength of the Company’s underlying financial position as outlined above.

The assumptions underlying ongoing exploration and corporate costs are subject to change and are provided for guidance only.

Furthermore, should there be additional receipts of warrant monies the Company would be in an increasingly strong financial position and able to further accelerate project activities if deemed appropriate.

Table: Power Metal Detailed 2021 Project Operational and Financial Breakdown:

PROJECT

EXPLORATION FOCUS

POW

INTEREST

OPERATIONAL POSITION

PROJECT FINANCIAL INFORMATION(Cash Costs)

AUSTRALIA

Victoria Goldfields

JV with Red Rock Resources plc (LON:RRR)

 

Gold

49.9%

13 licence applications covering a footprint of 2,336 km2.. Prepared 11 historic project reports including exploration planning and a National Instrument NI 43-101 technical report covering 8 applications. Awaiting initial licence grants for 3 priority licence applications (EL007271/7281/7285) and progressing potential listing plans on a North American stock exchange and other possible joint venture initiatives.

Power Metal has paid in full all contributory costs into the Joint Venture (“JV”) to date. In the period to 31.3.21 we have provided for general cash costs to run the JV Ballarat office and for a step up in exploration activities in Q1 2021 subject to the receipt of granted licences.

BOTSWANA

Ditau Camp Project

SJV with Kavango Resources plc (LON:KAV)

 

Rare Earths

50%

2 licences (1,386km2) with Rare earths potential established from recent exploration work.  First stage orientation work complete and follow up work announced 4.1.21.

Power Metal has made  advance payments of US$150,000 to cover its 2-year sole exploration commitment under the strategic joint venture (“SJV”) agreement ahead of schedule.  Power Metal has also paid its £10,000 initial contribution to corporate restructuring costs for the SJV, with the intention of initiating the process for a potential  listing of the SJV in 2021.

BOTSWANA

Kalahari Copper Belt Project

(SJV with Kavango Resources plc (LON:KAV)

 

Copper

Silver

50%

2 licences (1,294km2 ) directly to the southwest of Sandfire Resources’ T3 and A4 Dome copper-silver discoveries. Soil sampling programme underway with initial samples identifying zinc pathfinder in x-ray fluorescence (“XRF”) analysis. Follow up work announced 23.12.20.

BOTSWANA

Molopo Farms Complex Project

 

Nickel

Copper

PGMs

Up to 50.96%

3 licences (1,780km2) with multiple targets identified from electromagnetic survey and ground geophysics. Drilling of four high profile targets underway with two holes complete and extensive technical analysis underway.  Thick ultramafic zones have been intersected and in hole KKME 1-6 visible sulphides have been identified as announced 11.1.21.

Power Metal is spending US$500,000 to earn into a 40% direct project ownership which along with its 18.26% project holding company interest, will give a 50.96% effective economic project interest to Power Metal.  To date circa US$292,641 has been paid with a further US$207,359 (circa £151,952) included in cash costs to 31.3.21.

CAMEROON

Cobalt Blue Project

 

Cobalt

Nickel

100%

4 licences adjacent to, or within 50km of the Nkamouna/Nada cobalt/nickel deposit.  Review of exploration and commercialisation options reaching an advanced stage.

Further update to follow regarding the Company’s plans and financial commitment.

CANADA

Silver Peak Project

 

Silver

 

Earn -in to 30%

Mineral claims over historical Eureka-Victoria Silver Mine and high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins.

Summer 2020 channel sample programme included a delineated bonanza grade silver up to 0.50m @ 14,937 g/t Ag, 3.05 % Cu & 11.95 % Pb. In November, drill hole SP2020-01intersected a rubbly vein zone between 1.52m to 1.83m which assayed 0.31m @ 5,270 g/t (169.5 troy oz/tonne) silver as announced 29.12.20.

Planned recommencement of drilling in Spring 2021.

 

As part of the earn-in to 30% Power Metal has committed to cover CAD$250,000 on exploration in the period to September 2021.  To date CAD $141,048 has been paid covering expected spend to 31.3.21 and leaving CAD$108,952 remaining later in 2021.

THE DEMOCRATIC REPUBLIC OF THE CONGO

Kisinka Project

 

Copper

Cobalt

70%

Exploration licence of 41 carrés miniers (each 84.95 ha) with a 6.8km copper/cobalt anomaly identified.

Geophysics programme launched in late 2020 (as announced 15.12.20) and finalising the conversion of the licence to a Permis d’Exploitation (production license) with a 25-year life.

Advance payments made to cover geophysical programme costs.   Further costs of circa US$30,000 are expected in the period to 31.3.21.

TANZANIA

Haneti Project

JV with Katoro Gold plc (LON:KAT)

 

Nickel

Copper

Platinum Group Metals (‘PGM’)

Gold etc

35%

Large polymetallic land package of c.5,000 km2 including 80km long ultramafic complex with drill ready nickel sulphide/PGM targets.  Currently undertaking Rotary Air Blast drill programme at Haneti (as announced 30.12.20).

Power Metals has already made advance payments towards maiden drill programme costs.  Balancing Power Metal drill costs are expected to be circa US$55,000 in the period to 31.3.21.

USA

Alamo Gold Project

 

Gold

Earn-in up to 75%

Package of mining claims covering c.946 acres prospective for gold following the discovery of native gold nuggets near surface. Follow on work underway (as announced 11.12.20 and after completion of the reconnaissance survey in summer 2020) with further update to market expected shortly.

Power Metal has committed to minimum exploration spend in the 12 months to July 2021 of US$100,000, of which US$50,000 has been paid and a further US$50,000 is expected in the period to 31.3.21.  In addition, a further US$25,000 of property payments to the vendor were made in December 2020 in accordance with the earn-in commitment.

 

WARRANT UPDATE

On 10 December 2019 Power Metal announced an Equity Placing and Subscription which included the grant of 175,000,000  warrants exercisable at a price of at 0.70p per new ordinary share of 0.1 pence each in the Company with an exercise period ending on 10 December 2021, (the “Financing Warrants”). 

The Financing Warrants were subject to an acceleration clause whereby should the volume weighted average share price (“VWAP”) exceed 2.25p for 10 consecutive trading days, the Company may write to warrant holders providing 10 working days’ notice of accelerated exercise, with 15 working days thereafter for payment.

The Company can confirm that in the 10 consecutive trading day period of 24 December 2020 to 11 January 2021 the Power Metal VWAP exceeded 2.25p and therefore the Company has the right to accelerate any unexercised Financing Warrants.

For the avoidance of doubt Power Metal is not at this time proposing to utilise the above acceleration clause.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.  

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 – Canadian Silver Project – Exploration Update & Drilling Results

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce an exploration update from the Silver Peak silver project in British Columbia, Canada.

CHIEF EXECUTIVE OFFICER’S STATEMENT

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

“I am very pleased to announce the results of the revised man-portable drilling programme at Silver Peak conducted in November 2020.

We were eager to investigate high-grade vein continuity at Silver Peak hoping that positive exploration outcomes would build our knowledge base and potentially expedite the pathway to bringing what was a former high-grade working silver mine back into production.

The severely challenging weather conditions altered and curtailed the drill programme as announced, and notwithstanding the enhanced geological understanding of the silver mineralisation we gathered during the drilling exercise, the low number of samples collected meant it would be more difficult to establish any potential vein continuity as targeted. 

Moreover, with the weather impacted operating conditions on site, planned holes covering a number of possible high-grade vein continuity targets could not be completed and have been deferred until weather conditions improve.

The larger drill meterage originally planned is ultimately needed to ensure sufficient drilling is undertaken to potentially intersect any high-grade vein targets below the influence of near-surface weathering and to demonstrate vein continuity between the former Silver Peak mine portals.

Nevertheless, fortunately, even with the curtailed programme we have successfully delineated very high-grade silver (5,270 g/t or 169.5 troy oz/t silver per Table 1 below) in the Victoria Vein at a vertical elevation approximately 150m lower than the exceptionally high-grade channel sampling intersections from the summer due diligence programme (up to 14,937 g/t or 480 troy oz/t silver per Table 2 below).

Whilst we will still need to complete the previously planned programme as explained above and undertake deep diamond drilling to establish continuities within the high-grade zones between the two sampling areas, these preliminary results are very encouraging.

We are working with our partners to finalise the next stage ground operations, including the above diamond drilling, which we expect will commence following the Spring thaw around March/April.  We will communicate the updated exploration plan early in the new year.”

TECHNICAL SUMMARY:

  • Assay results for the revised shallow drilling programme at Silver Peak Project have been received from ALS Laboratories in Vancouver, with further high-grade silver confirmed in the Victoria Vein. The samples were assayed using ALS’s trace and Ore Grade Silver analytical packages (Ag-AA61, Ag-AA62 & Ag-GRA21), see results in Table 1 below.

  • Drill hole SP2020-01 collared at the sub-vein west of the Lower Portal at an elevation of 1,634m intersected a rubbly vein zone between 1.52m to 1.83m which assayed 0.31m @ 5,270 g/t (169.5 troy oz/tonne) silver. 

  • The SP2020-01 intersection is very encouraging given it confirms high silver grades occur in the Victoria Vein system over at least 150m of vertical extent.  Precious metal vein systems can often show a high degree of silver grade zonation in the vertical dimension.

  • The revised drill programme consisted of 6 short diamond drill holes which were collared in close proximity to the bifurcating vein system around the Lower Victoria portal. (The Lower Portal is 158m vertically below the Upper Portal which was the subject of a channel sample programme which delineated bonanza grade silver up to 0.50m @ 14,937 g/t Ag, 3.05 % Cu & 11.95 % Pb as announced 22 September 2020).

  • Five other holes were collared in close proximity to other branches of the vein system with lower silver results (up to 7g/t Ag); however, these holes are considered inconclusive as core recovery was poor in these vein intersections due to the effects of near surface vein weathering.

  • Chip samples from surface vein material and oxidised facture zones around the Lower Portal also returned lower silver values (up to 8.4g/t Ag) indicating a high degree of zonation in the vein mineralisation.

  • Tracing of the high-grade zones between the Upper Portal and Lower Portal will require further geological and structural mapping and mineralogical study in conjunction with the planned deep diamond drilling to assess the geological controls on the bonanza grade mineralisation.

  • As announced on 10 November 2020 and 24 November 2020 due to issues with the tracked drill rig accessing the planned drill pads and due to the onset of winter conditions Power Metal’s local partners undertook a smaller sampling programme employing man-portable drill equipment and surface sampling.

 

Table 1: Silver Peak Portable Drill Sample Assay Results

Hole ID

From (m)

To (m)

Interval

Silver Grade (Ag ppm)

(by ALS assay method)

Ag-AA61

Ag-AA62

Ag-GRA21

SP2020-01

1.52

1.83

0.31

>100

>1,500

  5,270.00

SP2020-02

0.00

0.43

0.43

0.60

SP2020-02

0.43

0.53

0.10

<0.5

SP2020-02

0.53

poor recovery

0.60

SP2020-02

2.60

poor recovery

1.80

SP2020-03

2.74

poor recovery

2.90

SP2020-04

0.30

poor recovery

7.00

SP2020-05

1.50

poor recovery

5.10

SP2020-06

1.22

poor recovery

1.30

All Holes drilled to ci rca 3.66m (12ft).  Poor sample recovery in weathered rock and vein material resulted in inconclusive interval widths

 

Table 2: Summary of Assay Results for Power Metal Due Diligence Sampling on Victoria Vein, Silver Peak Project (as announced 22 September 2020)

ALS Global Analytical Method

Ag-GRA22

Ag-CON01

Cu-OG46

Pb-OG46

Sample ID

 

Channel Sample Length

(m)

Ag

(ppm)

Ag

(ppm)#

Cu

(%)*

Pb

(%)*

SP20-001

0.50

>10,000

10,718

2.14

2.99

SP20-002

0.50

6,010

1.71

2.87

SP20-003

0.50

7,530

1.57

2.07

SP20-004

0.60

5,540

1.38

SP20-005

0.70

7,880

1.94

3.16

SP20-006

0.50

>10,000

14,937

3.05

11.95

SP20-007

0.80

5,330

1.26

SP20-008

0.55

1,595

1.78

SP20-009

0.45

4,110

SP20-010

0.65

1,755

1.71

SP20-011

N/A Grab sample

660

* Cu and Pb results rounded to two decimal places. 

# Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01. 

FURTHER INFORMATION

Silver Peak Project

The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.

Power Metal Earn-In

On 14 September 2020 the Company announced the exercise of an option agreement announced 17 August 2020 (the “Earn-In”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.

The full terms of the Earn-In were outlined in the 14 September 2020 announcement, and included a CAD$250,000 Exploration Commitment within the 12 months of the option exercise.  To date Power Metal has paid CAD$141,048 of this Exploration Commitment with CAD$108,952 (circa £63,000) remaining and due by 17 August 2021.

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

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 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 – Company Q&A

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide the questions and answers to a number of investor queries received recently by the Company. Where possible the question below is that presented to us, however where multiple questions involve similar themes, we have consolidated into a single question to avoid duplication.

Power Metal also notes that investors wishing to understand the current position of the Company may refer to the recently uploaded Investor Presentation which is available on the Company’s website and may be viewed through the following link:

https://www.powermetalresources.com/p/193/presentations

COMPANY Q & A

Power Metal Resources has received numerous investor queries recently and we are pleased with the increasing interest shown in our activities.  Where possible questions have been grouped into categories as outlined below.

Project Operations – Exploration and Corporate Activities

QUESTION

RESPONSE

Botswana – Molopo Farms Complex

 

Regarding drill #1 – why was the drill stopped when the anomaly identified via geophysics indicated an anomaly stronger with depth? 

 

The hole was angled at 60 degrees and was over 500m in length and passed between harder and softer rock as it descended.

The possibility of some deviation as we drilled makes it possible that we have missed by a few metres a steeply dipping target identified by geophysics.

The mudstones encountered could be generating a conductive anomaly but are likely to cover a greater areal extent as they are a known horizon in the Molopo Farms Complex of rocks, so this would be inconsistent with the areally restricted conductive anomaly identified from our geophysical work.

One possibility is that the geophysics took a gently dipping anomaly and a steeply dipping anomaly, the latter being our target, and modelled the two as being one.

It was more logical given the above to stop the hole at the target depth and move on to drill the next hole while analysing the core and doing down-hole geophysics.  If we had carried on drilling, we could have possibly drilled right past our target.

With the downhole geophysics we can look around and below the hole for 300m in each direction and so get a more accurate 3-D geophysical model and interpret the dip and orientation of the strata encountered in the drill core.

Unless results do not justify it, we will return to the hole and if necessary, deviate from it or drill deeper to test the assumed target.  

 

Botswana – Molopo Farms Complex

Is the geological model for the Molopo Farm Complex looking for geology similar to the Bushveld Igneous Complex, the Great Dyke in Zimbabwe or some other large ultramafic complexes?

 

 

Each ultramafic complex has its own characteristics depending on the conditions that produced it. We are drilling a satellite ultramafic intrusive which is part of, and of similar age to, the Large Bushveld Igneous Province, as described on this page of the KKME website: https://www.kalaharikey.co.uk/mopo-farms-project/geology-of-the-molopo-farms-complex/ .

Australia – Victoria Goldfields

What is the status of the Australia gold JV and will shareholders receive a distribution from Power Metal if the Australian Joint Venture Company is listed on a North American stock exchange?

 

 

 

We have various work streams underway in respect of the Australia gold joint venture and it is a very proactive period for this important part of the Power Metal business.

 

Our immediate focus is the advancement of the technical project information and exploration planning in preparation for the launch of efficient and targeted ground exploration which can only commence on the grant of licence applications.

 

In parallel we continue to work on the potential listing of some or all of the interests on a North American stock exchange as announced to shareholders.

 

In all discussions our focus is rapid advancement of exploration and significant commitment by any potential partners to ground exploration where we believe considerable value can be added through proactive implementation of exploration programmes.

 

The potential listing could generate an asset of considerable value given the strategic nature of the ground under application in Victoria.  That valuation would increase, perhaps significantly, with the grant of licences and the ability to launch ground exploration to validate our geological propositions. There is clear evidence of significant gold mineralisation across the licence application footprint.

 

The question of whether we would specifically seek to distribute any listed activity gains from the Australia JV, or indeed from any other corporate transaction undertaken by Power Metal or its partners, is a little early to definitively answer at this stage.

 

It is fair to say that we are attracted to the distribution model, which allows shareholders to see a return from their investment in Power Metal in addition to the appreciation in Power Metal share value that commercialisation of our interests could provide.

 

There are many elements to consider in this including what is best to advance the projects, the approach of any partners to transactional structuring, positioning Power Metal to enable distributions and considering the taxation elements to seek distribution efficiency from a tax planning perspective.

 

There are many work streams to complete if Power Metal were to consider distributions, but they can be run concurrently, and they could include seeking the approval of shareholders at a General Meeting.

 

 

Australia – Victoria Goldfields

How does Power Metal value its interests in the Australian Joint Venture Company and particularly its licences?

 

 

 

This is a complicated exercise as valuation depends on many factors including inherent geological and commercial potential, market conditions, granted or application status, historic and future spend and perhaps significantly the strategic significance of the JV interests.

 

We are developing valuation metrics, however for a real sense of valuation in the current market we can only look at recent transactions for similar interests and gain a feel for what might be achievable.

 

As stated previously a major factor for us is the commitment to significant ground exploration and financial investment to support that exploration work. We believe that proactive exploration stands a very good chance of identifying gold mineralisation and that will be a major uplift to any project valuation.

 

As you can see we are working with so many variables, but we know that having identified and built such an important and strategic land package in Victoria, we now have a duty to manage this professionally and seek the highest returns reasonably achievable from this unique opportunity.

 

Australia – Victoria Goldfields

Will Power Metal be seeking an income stream from any commercial transactions in respect of the Australian interests?

 

 

 

The main objective is the pursuit of exploration and corporate transactions that will maximise the capital return from the opportunity.  Income wise, we will likely focus on royalty income streams from interests as and when we involve third parties in a project or projects.

 

Australia – Victoria Goldfields

There is a lot of interest being shown in Victoria gold projects including ECR Minerals plc one of your neighbours.  Is this something you are also experiencing for the gold JV in Victoria?

 

 

 

It is increasingly clear that the Victoria Goldfields is a particularly attractive destination for gold exploration. 

 

The strategic nature of our Australia gold JV, with the size of land package assembled and the extent of prospectivity that’s evident from our published technical work, means that there will be interest and we have stated this previously.

 

Australia – Victoria Goldfields

Are there plans to re-process mine dumps in the Victoria Gold Fields in Australia once appropriate licences are granted?

 

 

This is not something we have looked at so far, but as licenses are granted, we will investigate the evidence at surface where there has been previous mining activity, which may include small gold-bearing dumps or tailings.

USA – Alamo Gold Project

Do you expect to be able to mine nuggets of gold from near the surface at the Alamo gold project in Arizona?

 

As announced by the Company via RNS on 20 November 2020, the plan is to undertake mini-bulk sampling alongside other exploration techniques in December 2020.  That should tell us more about project mineralisation including the prospectivity for gold nuggets near surface.

We are also looking at the potential for other mineralisation and the potential bedrock source of the gold mineralisation that, as we have clearly established to date, exists near-surface.  The latter was also demonstrated during our January 2020 due diligence field trip where we identified gold nuggets during the digging and metal detecting of shallow pits at the project.

This is early stage exploration and the prospect of mining, although ultimately our principal objective, is something we must build towards with exploration.  If successful, that exploration will confirm gold mineralisation of a magnitude to support permit applications and associated studies that would be the precursor steps to the launch of mining operations.

 

Tanzania – Haneti Project

You have announced that mobilisation is underway but when will drilling actually commence at the first drill location?

 

Power Metal has a communications approach that articulates through regulatory news announcements the status and progress on all of our material project interests.  This includes Haneti which is a very material opportunity for the Company.

Power Metal, with our partners Katoro Gold plc have announced pre-mobilisation, mobilisation of drilling and intend to announce an update on full drill commencement as appropriate, including if possible images on our website photo gallery showing the drill in action at the drill location.

 

Tanzania – Haneti Project

Why has Haneti not been drilled before if it is such an important strategic opportunity?

 

On a general level the junior resource sector has been experiencing challenging conditions for some time and in many cases, there has not been the financial capital around to pursue project acquisitions or impactful exploration activities.

Many great discoveries have, in our view, been made in scenarios where projects have not been able to attract sufficient project capital to enable progression of exploration.

Haneti is however a project that has received exploration capital over many years and has built to a position where the next stage is drilling.

Importantly Haneti now has two public companies working together to operate and finance drilling. 

Given the level of interest shown in the project, and in nickel sulphide exploration opportunities generally, it makes commercial sense all round to crack on with drill programmes which is what is happening at Haneti.

 

Canada – Silver Peak

When do you expect to receive assay results from the work undertaken recently?

 

As with all our projects we push for the receipt of assay data as soon as possible.  With the Covid-19 restrictions around the world in 2020 the Company has not been in a position to accurately confirm timescales around the receipt of assay data from third parties. As soon as assay results are received and interpreted by the Company, an announcement will be made to shareholders.

 

Canada – Silver Peak

Given we are now in winter season, how do you expect to take Silver Peak project forward?

 

We generated highly positive exploration findings from the summer due diligence sampling work including bonanza grade silver and significant copper and lead.  We await the assays from limited follow up drilling and sampling we were able to undertake in the short programme that we recently announced was curtailed by poor weather conditions.

Using the above and the historic exploration data available to us, we will, with our partners, determine the next exploration and corporate steps for the Silver Peak project.

We believe the Silver Peak project has great potential and now must identify the appropriate pathways for its development.

 

Canada – Silver Peak

Were you disappointed with the weather disruption at Silver Peak and what can you do to get the project back on track?

 

Absolutely. Power Metal is keen to push each project as hard as possible and we put a lot of work into drill programme design and implementation.  The weather hit us twice with storms damaging access and meaning our original programme with a larger rig could not go ahead.  Then the snow brought our man-portable rig operation to an abrupt and early conclusion.

We believe shareholders prefer a proactive approach to exploration and clearly, we pushed hard to get the Silver Peak drilling done whilst ensuring safety of operations at the site in the more challenging conditions.

 

DRC – Kisinka

Is it possible to extract value from the Kisinka project in the DRC and are you not concerned that money invested may be locked in?

 

We have operations around the globe in different jurisdictions and the DRC is one country that we believe investors perhaps do not fully understand or appreciate.  We think that will change.

The Company’s experience to date has been very positive however and suggests to us that there is real value to be created in the DRC, not least because of the immense metal prospectivity across the country.

Power Metal is pursuing a potential new copper-cobalt district at Kisinka which is situated near to Lubumbashi in the south-east of the country.

The quality of technical reports that we receive from operations at Kisinka is extremely good demonstrating the professionalism of our partners. 

Also, based on our experience the ability to secure licences and permits for operations is in many respects more straightforward than many jurisdictions where the process is more complex and takes longer.

Added to all this there are many international companies that are operating producing mines in the DRC including Ivanhoe’s Kamoa-Kakula under development now and which is expected to become one of the largest global producing mines.

 

DRC – Kisinka

When do you expect to complete the geophysics and start drilling?

 

The high-grade copper and cobalt from assays recently announced means that Kisinka is a key project interest and we are looking to commence follow on exploration as soon as possible. 

As announced 20 November 2020 the Company is working on setting up a ground magnetic survey and a ground electromagnetic survey, to detect both low magnetic and chargeable lithologies and indicate structures and faulting and areas of carbonate rocks, in order to generate precise drill targets with our in-country partners. 

The Company will make a further announcements to the market as appropriate in respect of the proposed programme at Kisinka.

 

Botswana – Kavango Resources JV

When will we hear more about the exploration work from the Kalahari Copper Belt?

 

As announced in the Company’s ‘Project Portfolio Update’ on 5 October 2020 the Company is awaiting the results of a soil sampling programme.  An update on that programme, its findings and the next steps will be released to the market once results have been received and interpreted.

 

Botswana – Kavango Resources JV

Have you refined your plans for a listing of the JV on a Canadian or UK stock exchange?

 

Plans remain on track and we have been putting in place the steps to achieve our listing objective.

We will provide an update on this to the market as appropriate.

 

General – Project Valuations

Do you have anything you could provide to investors with valuation indications on the projects, such as project NPVs?

 

We have a portfolio of early stage project interests, albeit some are in a more advanced stage with drill programmes running.  It is more difficult to ascribe valuations to earlier stage projects.

A similar situation exists on discovery, where the full extent of a project’s valuation will only be developed as projects are progressed and more is understood about the scale and type of mineralisation.

To a certain extent the involvement of third parties on project earn-in or joint ventures can assist with an assessment of likely value also.

In addition, project spinouts especially involving compensation in marketable assets such as listed equity will also help the developing value assessment.

As soon as we can start to attribute specific values to project interests and investments we will seek to do so.

 

General – New Opportunities

Are you still looking for new opportunities and are you limited in the regions you would operate in and the commodities you would explore for?

 

The Company actively assesses any new opportunities it is presented with although it has to be said we have already noted a rise in vendor expectations regarding project valuations. 

We are of the belief that we would not have been able to assemble our current portfolio of projects on the same terms today given the stronger natural resources environment.

We were given a tremendous opportunity by the difficult market conditions of 2019/2020 and now shareholders have the advantage of a portfolio constructed in challenging markets, as those same markets move into what we believe will be a stronger phase.

We want to develop the Company around clear themes, demonstrating consistency and clear strategic rationale.  Therefore, we think it’s wise to follow the overall business structure of precious metals in North America and Australia and base metals in Africa. 

 

 

Business Management

QUESTION

RESPONSE

How is the Company able to manage 9 projects and commit adequate management time to each?

 

Whilst the management of a number of projects is a challenge, the Company ensures that it is adequate staff and management time available for each project as appropriate. The Company is also enhancing management oversight to ensure regular engagement of London plc with the project management and operational teams running each of our interests.

 

We also have support with back office including financial accounting and compliance through an external provider.  In addition, we have assistance to manage and coordinate our extensive external communications.

 

We will bring in further bespoke managerial resources as our business expands and our working capital grows. 

 

 

Should Power Metal spin out interests will there be a continuing involvement in management and if so how will that be possible given the management requirements of the core business?

 

It depends on the nature and type of transaction undertaken.  Where needed we will of course apply our management time and other resources to assist. 

 

However, our focus is on ensuring any spin outs or similar are into wrappers or deal structures that come with experienced management able to deal holistically with the commercial challenges without relying too heavily on Power Metal central resources.

 

What measures do you have in place to ensure your management and operations team have due regard for environmental protection and the protection of local communities?

 

This is absolutely vital especially as our business expands its active operations in the field. We already have a keen focus on health and safety, environmental and community protection and that will continue.

 

We seek to follow best practice across the above areas and generally from a corporate governance perspective reflective of the resources available to a smaller company. 

 

To add further weight to this we are currently reviewing a number of trade associations from whom we can secure further support on best practice. 

 

We expect to join trade associations in the near term to further demonstrate our desire to remain proactive in this area.

 

By way of example our Australian JV has just employed a community relations and environment officer as its second employee showing the high priority we give to these matters.

 

 

Financing Strategy

QUESTION

RESPONSE

You have disclosed your working capital position and appear confident you are in a strong financial position, however how reasonable is this given the large spread of projects and work being undertaken on them?

 

The answer revolves around more than just the absolute amount of working capital we hold and also includes how we spend our money, the level of fixed financial commitments and our access to additional working capital sources.  The latter point we deal with in the next question so for now we will focus on the matters of spending and financial commitments.

 

We are quite keen on the control of spending and have our main areas of spend under control.  Much of a junior resource company spend falls into central overhead and exploration spend. When corporately acquisitive, then acquisition costs can also be material.

 

For central overheads the direct costs in relation to the exchange listing and advisors surrounding that are largely fixed and need to be budgeted for. We pay our central costs promptly and carry almost no trade creditors for any material periods.  We have no material debt.

 

Much central cost in junior resource companies relates to director salaries and expenses.  At Power Metal, we believe against our peers in the sector we are modestly paid and have very little outlay for director personal expenses.

 

The aim for us (as holders beneficially interested in approximately 14% of the Company’s issued share capital) is to see money invested in the ground to make exploration and commercial progress including major metal discoveries. 

 

If we do that our shareholdings may rise considerably in value and the financial returns from that would be way more beneficial to directors than excessive board salaries in the early stages of the Company’s development.

 

Turning to exploration spending, for the vast majority of our project spend, our exploration outgoings are flexible and generally entirely at our volition.  This means we can spend if we wish to, but curtail exploration spend across our business if we wish to, for whatever reason.  That spend control is important.

 

Equally for new acquisitions we have always been controlled and not overly exposed ourselves with heavy acquisition terms.  We have used cash as part of acquisition terms but only modestly as cash is king in our sector. 

 

Generally, where possible we have also used our shares for new acquisition vendor payments.  So far that model has worked well to preserve cash and acquire opportunities on reasonable terms (with shared upside for vendors who hold interests in Power Metal stock and benefit as the shares increase in value).

 

Where do you feel most additional working capital will be generated; from financings, warrant exercises or asset disposals?

 

It’s difficult to be precise on future working capital sources but we do have some degree of expectation subject of course to market conditions and buoyancy in the junior resource sector.

 

Power Metal could undertake financings and the Board are confident that money could be raised as required.  This has been amply demonstrated by the £2.7m raised in financings since February 2019 and, save for the initial restructuring in February 2019, Power Metal financings in December 2019 and July 2020 were conducted at the then market price. 

 

Discounted financings are not what Power Metal seeks to undertake as that we consider that potentially damaging for shareholder value and confidence in general.

 

Ideally, we are seeking to build our working capital to become financially self-sustaining.  This would mean that we would not need to undertake financings unless we chose to do so on strong terms or to value-adding institutional investors.

 

Warrant exercises have provided a considerable amount of additional working capital.  The amount raised through warrant exercises since August 2020 has enabled the company to be aggressive with its exploration and corporate plans.  In essence each warrant exercise provides us with funds to accelerate our operational activities.

 

Alongside the above we have a strategic investment portfolio that is growing in value and should that continue, it would provide a source of further working capital should this be needed for operations.

 

The area where we feel considerable working capital could be generated is from spinouts or other similar commercial transactions where we exchange some of our direct ownership of an interest for mainly cash or shares in other entities. 

 

If those entities are liquid listed vehicles, then the effect is to have an asset easily translatable into cash when and if needed to fund our own operations.

 

Can you explain the warrant exercise process, its impact on shareholder dilution and whether there are any restrictions on the warrants?

 

Power Metal receives an exercise form from a warrant holder and checks the validity of this to an underlying warrant register. If acceptable this exercise is reconciled to a receipt of cash into the Company’s bank account.

 

For all valid exercises we secure board approval to issue equity, prepare a market announcement and an AIM admission form for the new equity to be admitted to trading on AIM.

 

The end result is a market announcement confirming the warrant exercises and cash received.

 

The new shares are generated by the registrar and admitted to trading on AIM thereafter. 

 

The warrant exercises increase the issued share capital with such information provided in the requisite market announcement at the time and the increased amount of shares is updated to the Company’s website AIM Rule 26 page on the Investors’ section of the site accordingly.

 

 

Can you provide further information on all outstanding warrants and options to give a better understanding of potential dilution?

 

Details of all warrants issued by the Company can be found in regulatory announcements released by the Company and within the Company’s Financial Report and Accounts.

 

Additionally, the Company will be adding to its new website in due course a full schedule of all financial instruments including all warrants and options held generally by investors and also those held by the board of directors. 

 

This schedule will include all final exercise dates and any special terms including accelerators whereby the company can elect to expedite the use of warrants by holders and if not used, cancel the remainder warrants although, as noted above, all such information can be found within the relevant announcements made by the Company.

 

What amount of revenue do you expect to generate from your projects and how will that revenue be derived?

 

Power Metal is generally seeking capital returns where an increase in the value of projects is secured through exploration or corporate structuring.

 

In some cases that value may be crystallised through a disposal of some or all of a project interest for cash or shares in an acquiring company.

 

In respect of any disposals we are also keen on longer term consideration that could be described as “revenue” including royalties from interests disposed where Power Metal would receive payments should an interest enter production. 

 

Royalties can be a highly valuable source of income or revenue over the longer term so potentially could become a valuable part of our business asset base.

 

In addition, royalty income streams can be sold for material cash sums, providing optionality to Power Metal on how value should be crystallised.

 

When do you anticipate institutional investors will be interested in Power Metal?

 

There are of course institutions of all shapes and sizes, with varying business rationales and many are not suitable partners for our company.

 

We are open to reputable and recognised institutional investment but are also comfortable without it. 

 

Well regarded institutional finance can increase investor confidence in Power Metal, however we are well funded presently and are entirely comfortable with our access to future working capital as outlined in some detail above.

 

 

 

Marketing and Communications

QUESTION

RESPONSE

Can you produce company level and project specific factsheets to help investors understand the business and its constituent elements?

 

The Company intends to undertake this exercise once the website update has been completed.  

Will you be having updated analyst reports prepared for Power Metal?

 

Yes, we expect our brokers will provide updated research to the market as they deem appropriate.

 

 

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 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 – Silver Peak Exploration Update

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce an exploration update from the Silver Peak silver project in British Columbia, Canada.

 

CHIEF EXECUTIVE OFFICER’S STATEMENT

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

“In what continues to be a highly active period at Power Metal Resources, I am pleased to announce the safe completion of a revised drill and sampling programme at the Silver Peak Project notwithstanding very challenging operating conditions as described below.

Our summer due diligence review at Silver Peak clearly highlighted the Project’s potential, as validated by bonanza grade silver (including channel samples yielding up to 14,937 g/t Ag) and significant copper and lead we identified from our summer due diligence channel sampling programme.

We wanted to follow up expeditiously with further work before the weather window closed, gathering additional information to aid preparation for the Project’s next stage of development. To do this we have worked closely with our partners to adapt very rapidly to changeable weather forecasts.

I would like to thank the exploration team for persevering despite the stormy conditions, followed up by snowfall, the heaviness of the latter bringing the work programme to an early conclusion. 

The additional work undertaken by the team has added to our geological understanding of the silver mineralisation and we have secured samples which have now been delivered to the laboratory for assay testing.

Given the highly positive project data, reinforced by exploration to date, we are working closely with our partners to determine next steps for Silver Peak, from both exploration and corporate perspectives. There is palpable demand for high grade silver projects in the market at present.”

SUMMARY OF REVISED DRILL AND SAMPLING PROGRAMME

  • The team undertook a rock chip sampling programme at the Project and despite challenging weather conditions completed six diamond drill holes utilising man-portable drilling equipment to an average depth of 12 feet per hole.
  • Forecast heavy snowfall, resulted in an early cessation of the programme and the team safely left the site, with all equipment and samples collected, before the snows fell.
  • In total 10 diamond core samples   were prepared for testing from the 6 holes drilled and 11 rock chip samples have been prepared from the field work and all samples have been delivered to ALS laboratory in North Vancouver, British Columbia for assay testing.
  • During the programme vital information was collated on the nature of the bifurcating vein system across different levels of the system.  This information will be utilised to develop future project exploration programmes.

EVENTS LEADING INTO THE REVISED PROGRAMME

  • On 22 October 2020 Power Metal announced the signing of the drilling contract for an initial 500m confirmatory diamond core drill programme to test the Victoria Vein at the Silver Peak Project. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
  • On 30 October 2020 Power Metal announced that the drilling contractor had mobilised the drilling rig, bulldozer and ancillary equipment from northern British Columbia to the local town of Hope where the Silver Peak Project is based and then the planned movement of the drilling rig and support equipment from Hope up the valley, on the upgraded access, to the project and the first drilling pad.
  • The mobilisation was attempted but the area had experienced significant poor weather which caused a degradation in conditions at the project and limited access to the property.  Some of the impacts were dealt with, including the removal of fallen trees, however given the size of the rig and supporting equipment and the conditions encountered it was not considered safe to proceed with the original plan of moving the larger rig up onto the drilling pad.
  • As announced on 10 November 2020 rather than not proceeding and delaying the drill programme entirely Power Metal’s local partners secured smaller man-portable drill equipment and this, together with associated support equipment was installed at the Project and the team commenced drilling.
  • The local team were aiming to drill test at least twenty vein intersections, with hole depths of circa 6m/20 feet (120m of drilling overall) in a 6 to 8-day programme dependent particularly on weather conditions in the Project area.
  • Given the depreciation in local weather, conditions for drilling worsened, and 6 holes were completed to around 60% of planned depth.  Working time on-site was reallocated to the collection of rock chip samples from accessible veins and assessment of the property to gather additional geological information.
  • The team safely left the site due to a forecast of heavy snowfall, with all equipment and rock samples.  The site was subsequently covered in significant snow.

PROJECT BACKGROUND AND EARLIER DUE DILIGENCE PROGRAMME FINDINGS

Background

On 14 September 2020 the Company announced the exercise of an option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.

Prior to option exercise the Company undertook a due diligence exploration programme including sampling at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.

The assay results from the due diligence channel sampling were reported on the 22 September 2020 and are set out in Table 1 below:

Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak Project

ALS Global Analytical Method

Ag-GRA22

Ag-CON01

Cu-OG46

Pb-OG46

Sample ID

Channel Sample Length

(m)

Ag

(ppm)

Ag

(ppm)#

Cu

(%)*

Pb

(%)*

SP20-001

0.50

>10,000

10,718

2.14

2.99

SP20-002

0.50

6,010

1.71

2.87

SP20-003

0.50

7,530

1.57

2.07

SP20-004

0.60

5,540

1.38

SP20-005

0.70

7,880

1.94

3.16

SP20-006

0.50

>10,000

14,937

3.05

11.95

SP20-007

0.80

5,330

1.26

SP20-008

0.55

1,595

1.78

SP20-009

0.45

4,110

SP20-010

0.65

1,755

1.71

SP20-011

N/A Grab sample

660

* Cu and Pb results rounded to two decimal places. 

# Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01.

Project Overview

The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.

Earlier Due Diligence Exploration Programme

The due diligence work programme previously conducted by Power Metal included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit.

The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information.

A portable X-ray fluorescence analyser (“pXRF”) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate.

The due diligence work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from Power Metal’s 12 month Project exploration spend commitment of C$250,000.

 

 

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

 

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 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 – Drilling Commences at Canada Silver Project

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce drilling has commenced at the Silver Peak silver project in British Columbia, Canada.

CHIEF EXECUTIVE OFFICER’S STATEMENT

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented

“I am extremely pleased to announce the commencement of drilling at the Silver Peak project enabling us to secure sample core for laboratory assay testing and complimenting the work undertaken to date including the summer channel sampling which produced bonanza silver grades and significant copper and lead grades.

As you will see below the original drilling plan had to be altered, and we have implemented a different approach using equipment appropriate to the new circumstances.  I thank our partners for their quick thinking adaptability that has enabled a revised drill programme to be implemented.

Given the significant results from the sampling programme we conducted recently we are obviously eager to see the assay results from this drilling programme.”

HIGHLIGHTS:

  • On 22 October 2020 Power Metal announced the signing of the drilling contract for an initial 500m confirmatory diamond core drill programme to test the Victoria Vein at the Silver Peak Project. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia.
  • On 30 October 2020 Power Metal announced that the drilling contractor had mobilised the drilling rig, bulldozer and ancillary equipment from northern British Columbia to the local town of Hope where the Silver Peak Project is based and then the planned movement of the drilling rig and support equipment from Hope up the valley, on the upgraded access, to the project and the first drilling pad.
  • The mobilisation was attempted but the area had experienced significant poor weather recently which caused a degradation in conditions at the project and limited access to the property.  Some of the impacts were dealt with, including the removal of fallen trees, however given the size of the rig and supporting equipment and the conditions encountered it was not considered safe to proceed with the original plan of moving the larger rig up onto the drilling pad.
  • Rather than not proceeding and delaying the drill programme entirely Power Metal’s local partners secured smaller man-portable drill equipment and this, together with associated support equipment has been installed at the Project and the team have now commenced drilling.
  • The portable core drill being utilised produces a 48mm core (of similar size to that originally intended from the larger rig) and will be used to test multiple targets initially focused on the top of the lower Victoria portal.
  • The local team are aiming to drill test at least twenty vein intersections in a 6 to 8-day programme dependent particularly on weather conditions in the Project area.
  • Hole depth is expected to be circa 6m (20 feet) as the smaller drill enables collaring to be undertaken close to the vein.
  • As such, the total drill programme is now aiming to complete approximately 120m of drilling rather that the proposed 500m of diamond core drilling as announced on 22 October 2020, with a significant consequent reduction in programme cost.
  • If successfully completed as outlined the drill programme will provide core from more locations across the property than the original programme would have provided.
  • The grade of each core sample will be tested using a handheld X-ray Fluorescence (“XRF”) unit to get an estimate of silver grades prior to assay testing at an accredited local laboratory.

 

FURTHER INFORMATION

Background

On 14 September 2020 the Company announced the exercise of an option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.

Prior to option exercise the Company undertook a due diligence exploration programme including sampling at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.

The assay results from the due diligence channel sampling were reported on the 22 September 2020 and are set out in Table 1 below:

Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak Project

ALS Global Analytical Method

Ag-GRA22

Ag-CON01

Cu-OG46

Pb-OG46

Sample ID

Channel Sample Length

(m)

Ag

(ppm)

Ag

(ppm)#

Cu

(%)*

Pb

(%)*

SP20-001

0.50

>10,000

10,718

2.14

2.99

SP20-002

0.50

6,010

1.71

2.87

SP20-003

0.50

7,530

1.57

2.07

SP20-004

0.60

5,540

1.38

SP20-005

0.70

7,880

1.94

3.16

SP20-006

0.50

>10,000

14,937

3.05

11.95

SP20-007

0.80

5,330

1.26

SP20-008

0.55

1,595

1.78

SP20-009

0.45

4,110

SP20-010

0.65

1,755

1.71

SP20-011

N/A Grab sample

660

* Cu and Pb results rounded to two decimal places. 

# Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01.

Project Overview

The Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.

Earlier Due Diligence Exploration Programme

The due diligence work programme previously conducted by Power Metal included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit.

The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information.

A portable X-ray fluorescence analyser (“pXRF”) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate.

The due diligence work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from Power Metal’s 12 month Project exploration spend commitment of C$250,000.

 

 

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

 

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 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 – Canadian Silver Project – Drill Mobilisation Update

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce a drill mobilisation update from the Silver Peak silver project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada.

HIGHLIGHTS:

· On 22 October 2020 Power Metal announced the signing of the drilling contract for an initial 500m confirmatory diamond core drill programme to test the Victoria Vein at the Silver Peak Project. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia. 

· The drilling contractor has now mobilised the drilling rig, bulldozer and ancillary equipment from northern British Columbia to the local town of Hope where the Silver Peak Project is based.

· The drilling rig and support equipment is being moved from Hope up the valley, on the upgraded access, to the first drill pad during the course of today with a view to commencing diamond core drilling before the end of the week. 

CHIEF EXECUTIVE OFFICER’S STATEMENT

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented

“Following the logistics involved with shipping the drilling rig and equipment from northern British Columbia to the local town of Hope and finishing the final access from the road head to the drill pads, the team is mobilising up the valley and orientating the drill rig ready to commence the first hole during the course of today.

This is an exciting time for the Power Metal team and our partners as we launch our first silver focused drill programme.

We are targeting the Victoria Vein where Power Metal due diligence sampling returned bonanza silver grades (up to 480 troy oz/tonne) with significant copper and lead grades. The information which will be secured from this drilling programme will be key to directing the next development steps for the project.

Further updates to market in respect of this exciting silver project opportunity are expected in the near term.”

FURTHER INFORMATION

BackgroundOn 14 September 2020 the Company announced the exercise of an option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.Prior to option exercise the Company undertook a due diligence exploration programme including sampling at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.The assay results from the due diligence channel sampling were reported on the 22 September 2020 and are set out in Table 1 below:Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak ProjectALS Global Analytical MethodAg-GRA22Ag-CON01Cu-OG46Pb-OG46Sample IDChannel Sample Length (m)Ag (ppm)Ag (ppm)#Cu (%)*Pb (%)*SP20-0010.50>10,00010,7182.142.99SP20-0020.506,010
1.712.87SP20-0030.507,530
1.572.07SP20-0040.605,540
1.38
SP20-0050.707,880
1.943.16SP20-0060.50>10,00014,9373.0511.95SP20-0070.805,330
1.26
SP20-0080.551,595
1.78
SP20-0090.454,110

SP20-0100.651,755
1.71
SP20-011N/A Grab sample660

* Cu and Pb results rounded to two decimal places.  # Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01.
Project OverviewThe Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.
Earlier Due Diligence Exploration Programme The due diligence work programme previously conducted by Power Metal included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (“pXRF”) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The due diligence work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from Power Metal’s 12 month Project exploration spend commitment of C$250,000. 

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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 – Canadian Silver Project – Diamond Drilling Contract Signed

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce the signing of the drilling contract for an initial 500m diamond core confirmatory drill programme to test the Victoria Vein at the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia. 

HIGHLIGHTS:

· Drilling contract signed with an experienced Canadian drilling company for an initial 500m diamond core programme.

· Contractor is expected to mobilise within the next few days with a view to commencing drilling next week.

· Initial programme will entail drilling from two pads with planned core intercepts to test the Victoria Vein where POW due diligence sampling returned bonanza silver (Ag) and significant copper (Cu) and lead (Pb) grades from two 0.5m long surface channel samples as announced 22 September 2020 and as follows:

–  0.50m @ 10,718 g/t Ag (345 troy oz/tonne), 2.14 % Cu & 2.99 % Pb, and;

–  0.50m @ 14,937 g/t Ag (480 troy oz/tonne), 3.05 % Cu & 11.95 % Pb).

· Core drilling will employ a NQ size drilling bit, for a 48mm diameter core sample, with a winter capable track mounted rig operated on a double 12 hour shift basis.

· Drilling oversight, core logging and sampling will be conducted by an experienced independent geologist, with half core samples sent to an accredited independent laboratory for analysis.

· Programme is expected to be completed within a two week window prior to the onset of winter conditions.  The rig will be supported by a bulldozer on site.

CHIEF EXECUTIVE OFFICER’S STATEMENT

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented

“I am very pleased to report the signing of the drilling contract for an initial diamond core programme at Silver Peak, where the recently announced channel sampling returned exceptionally high silver assays.

The team in-country are now focused on mobilisation and commencement of drilling and we are naturally eager to see the outcome of this programme, given the results we achieved from the sampling programme recently announced.

My thanks go to our partners in Canada who have worked incredibly hard to organise this programme and put us in a position to undertake this work prior to the weather window closing.  The expeditious work undertaken has given us an opportunity to assess this unique high-grade silver project through drilling, far earlier than we initially thought possible.”

FURTHER INFORMATION

BackgroundOn 14 September 2020 the Company announced the exercise of an option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.Prior to option exercise the Company undertook a due diligence exploration programme including sampling at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.The assay results from the due diligence channel sampling were reported on the 22 September 2020 and are set out in Table 1 below:Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak ProjectALS Global Analytical MethodAg-GRA22Ag-CON01Cu-OG46Pb-OG46Sample IDChannel Sample Length (m)Ag (ppm)Ag (ppm)#Cu (%)*Pb (%)*SP20-0010.50>10,00010,7182.142.99SP20-0020.506,010
1.712.87SP20-0030.507,530
1.572.07SP20-0040.605,540
1.38
SP20-0050.707,880
1.943.16SP20-0060.50>10,00014,9373.0511.95SP20-0070.805,330
1.26
SP20-0080.551,595
1.78
SP20-0090.454,110

SP20-0100.651,755
1.71
SP20-011N/A Grab sample660

* Cu and Pb results rounded to two decimal places.  # Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01.
Project OverviewThe Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.
Earlier Due Diligence Exploration Programme The due diligence work programme previously conducted by Power Metal included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (“pXRF”) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The due diligence work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from Power Metal’s 12 month Project exploration spend commitment of C$250,000. 

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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 – Project Portfolio Update

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

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

“Power Metal has built a diverse portfolio of interests and has multiple projects in the active exploration phase.  The latest position for all our project interests is outlined below, together with details of targeted near-term news flow across our business.

To assist investors and shareholders keep track as we push ahead with multiple exploration programmes we continue to enhance our communications tools embracing both public and investor relations disciplines.  The Company’s corporate website is being updated at present and a new website is to be launched in the coming month.  We are also looking to launch or enhance project level websites where appropriate.

We work hard to keep our corporate presentation fully up to date with each Company announcement, so it should remain a primary tool for shareholders wishing to learn more.  Today we are also launching  a Project Dashboard for shareholders which will be held on our website and contain an updated overview of each project, its status and near-term plans.

Power Metal are seeking large scale metal discoveries through active exploration, much of which is currently underway or about to commence.  Given the level of activity it’s important we remain open to feedback.  Therefore, should shareholders have any questions, or suggestions, please let us know via info@powermetalresources.com.”

Project Information Sources for Shareholders:

Further details in respect of Power Metal’s nine project interests can be found on the Company’s website https://www.powermetalresources.com/s/30/projects

The Company maintains a frequently updated Corporate Presentation which provides an overview of each project and additional corporate information and this may be viewed through the following link:

https://www.powermetalresources.com/p/193/presentations

Recognising the breadth of the Company’s projects, and the ongoing active exploration across numerous projects, Power Metal have today launched a Project Dashboard.  This provides an updated list of Company’s projects, their current status and each project’s targeted near term newsflow.

The Dashboard is now embedded into the Company’s website and a pdf copy may be downloaded through the following link:

https://www.powermetalresources.com/Uploads/8668-POW_Project_Summary_Updated.pdf

The latest project status and targeted news flow is also outlined below.  Shareholders should note that the targeted outcomes and plans may be impacted by a variety of factors, of which readers will be aware the continuing Covid-19 pandemic remains a material factor.  Power Metal works with its in-country partners to mitigate and manage all risks proactively and efficiently to ensure where possible the safe continuation of ground operations.

Power Metal Project Status and Targeted News Flow:

PROJECTMETALPOWINTERESTCURRENT STATUSTARGETED KEY NEWS 2020
     
AUSTRALIAVictoria Goldfields Joint Venture Gold49.9%12 applications over (2,188 km2.) Completed historic project reports, exploration planning and NI 43-101. Potential grant of exploration licences, starting with first 3 priority applications, then launch of exploration programmes.Progress updates for listing on North American stock exchange.
BOTSWANADitau Camp Project Rare Earths50%2 licences (1,386km2) Rare earths potential established from recent exploration work.Commence orientation study to assist in the characterisation and exploration vectoring for the Ditau Project carbonatite ring-structures potentially hosting rare earths.
BOTSWANAKalahari Copper Belt Project CopperSilver50%2 licences (1,386km2) southwest of Sandfire Resources’ T3 and A4 Dome copper-silver discoveries.Exploration results from soil sampling, then ground magnetic surveying, and possibly airborne electromagnetic surveying, leading into drill target development.
BOTSWANAMolopo Farms Complex Project NickelCopperPGMsUp to 50.96%3 licences (1,780km2) with multiple targets identified from electromagnetic survey and ground geophysics. Planned launch of maiden drill programme and thereafter delivery of results from drilling to the market including on-site findings and laboratory assays.
CAMEROONCobalt Blue Project CobaltNickel100%4 licences adjacent to, or within 50km of the Nkamouna/Nada cobalt/nickel deposit.  Announce findings from review of exploration strategies and potential commercialisation options.
CANADASilver Peak Project Silver 30%Mineral claims over historical Eureka-Victoria Silver Mine and high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins.Planned launch of drill programme targeting high grade silver veins and following channel sampling in September 2020 which highlighted bonanza grade of up to 14,937g/t (482 oz/t).
DRCKisinka Project CopperCobalt70%Exploration licence of 41 carrés miniers (each 84.95 ha) with a 6.8km copper anomaly identified.Copper/cobalt assay results pending from 2020 pitting programme.C onversion of the licence to a Permis d’Exploitation (production license) with a 25 year life.
TANZANIAHaneti Project NickelCopperPGMsGold etc35%Large polymetallic land package of c5,000 km2  including 80km long ultramafic complex with drill ready nickel sulphide/PGM targets.Planned launch of maiden drill programme and thereafter delivery of results from drilling to the market including on-site findings and laboratory assays
USAAlamo Gold Project GoldUp to 75%Package of mining claims covering c766 acres prospective for gold following the discovery of native gold nuggets near surface.Planned follow on exploration programme after initial short reconnaissance survey conducted successfully in August 2020.

REGULATORY STATEMENT

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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 – Canadian Silver Project – Bonanza Silver Grades from Due Diligence Sampling

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the assays results from the due diligence sampling programme at the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia. 

HIGHLIGHTS:

·    Ten channel sample and one grab sample assay results received from ALS Canada laboratories for the recently completed due diligence sampling on the Victoria Vein at the Silver Peak Project (programme completion reported on 9 September 2020). Sampling was conducted by a contract geologist and was documented for Power Metal by photographs and video.

·   The purpose of the sampling was to validate historic reports of vein grade and the results received have satisfied Power Metal that historic data appears representative. 

·    Bonanza silver (Ag) and significant copper (Cu) and lead (Pb) grades returned from two 0.5m long channel samples taken across the Victoria Vein;

Ø SP-20-001: 0.50m @ 10,718 g/t Ag, 2.14 % Cu & 2.99 % Pb; and 

Ø SP-20-006: 0.50m @ 14,937 g/t Ag, 3.05 % Cu & 11.95 % Pb

·    Other standout channel sample assay results include:

Ø SP20-005: 0.70m @ 7,880 g/t Ag, 1.64 % Cu & 3.16 % Pb; and

Ø SP20-003: 0.50m @ 7,530 g/t Ag, 1.57 % Cu & 2.07 % Pb.

·    Average silver grade across all 11 samples >6,000g/t silver.  Full results summary set out in Table 1 below.

·    Channel samples were cut across the width of the vein, perpendicular to the vein strike, using a petrol driven water cooled disk cutter, sample sites were selected where vein material was deemed to be representative of silver mineralisation;

Ø Channel Samples SP-20-001 to 007 were taken as a series of parallel channel samples taken across the Victoria Vein over a circa 4m strike length; and

Ø Channel samples SP-20-008 – 010 were taken as a series of parallel samples across the Victoria Vein at a point circa 16m along strike from samples 1-7.  Grab sample SP-20-011 was taken at an intermediary point along the vein.

CHIEF EXECUTIVE OFFICER’S STATEMENT

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

“We are very pleased to report the assay results from Power Metal’s recent due diligence sampling programme have confirmed the very high silver values historically reported on the Victoria vein, one of two main veins located at the Silver Peak Project in British Columbia, Canada.

Bonanza grades of silver with significant copper and lead have been confirmed by channel samples, assayed by ALS Global and these exciting results reinforce and confirm the historical reported assays and underpin Power Metal’s decision to progress with the project earn-in. 

With preparations currently being made on site to further upgrade access for equipment, we look forward to providing details of the follow-on programme plans at Silver Peak shortly.”

ASSAY RESULTS

A summary of certificated assay results with analytical method, for the eleven samples submitted to ALS Canada Ltd are set out in Table 1 below:

Table 1: Summary of assay results for samples taken during Power Metal Due Diligence sampling on Victoria Vein, Silver Peak Project

ALS Global Analytical MethodAg-GRA22Ag-CON01Cu-OG46Pb-OG46
Sample IDChannel Sample Length (m)Ag (ppm)^Ag (ppm)#^Cu (%)*Pb (%)*
SP20-0010.50>10,00010,7182.142.99
SP20-0020.506,010 1.712.87
SP20-0030.507,530 1.572.07
SP20-0040.605,540 1.38 
SP20-0050.707,880 1.943.16
SP20-0060.50>10,00014,9373.0511.95
SP20-0070.805,330 1.26 
SP20-0080.551,595 1.78 
SP20-0090.454,110  
SP20-0100.651,755 1.71 
SP20-011N/A Grab sample660  

* Cu and Pb results rounded to two decimal places.  

# Two over limit silver samples were analysed >10,000 ppm Ag by method Ag-GRA22 were reanalysed using method Ag-CON01.

^ ppm is parts per million, and equivalent to g/t

FURTHER INFORMATION

BackgroundOn 14 September 2020 the Company announced the exercise of the option agreement announced 17 August 2020 (the “Option Agreement”) in respect of the Silver Peak Project, gaining the right to earn-in to a 30% interest in the Project.As part of this due diligence process the Company undertook an exploration programme at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.The assay results from this sampling work are outlined in the current release.
Project OverviewThe Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.
Due Diligence Exploration Programme The work programme included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (pXRF) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from the C$250,000 12-month project exploration spend as Power Metal has exercised the Option. 

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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 – Canadian Silver Project – Option Exercised

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce the Company has exercised its option (the “Option”) to earn-in to the Silver Peak Project (the “Silver Peak Project” or the “Project”) in British Columbia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Columbia. 

HIGHLIGHTS:

·   Review of Project data, including a recently conducted due diligence exploration programme, has provided positive outcomes enabling Power Metal to exercise the Option within the 30-day Option period;

· Exercise of the Option enables Power Metal to earn-in to a 30% interest in the Project on terms outlined below and including an additional CAD$225,000 committed by POW on ground exploration;

· Power Metal are now working with the Project vendors to continue a technical review focused on launching next stage exploration work including a Project drilling programme;

· The Project earn-in, when complete, will provide Power Metal with an interest in a high-grade silver exploration property in Canada, including a former working silver mine;

· Further updates to the market are anticipated in the near term in respect of the ongoing technical review and further exploration programme.

CHIEF EXECUTIVE OFFICER’S STATEMENT

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented “The decision to exercise this Option, on schedule, provides Power Metal with its first, potentially high impact, silver exploration project interest.

The cash component costs of earn-in exploration and Option exercise payments are fully covered by recent warrant exercises that have brought additional cash into Power Metal, meaning the exercise of warrants and the money generated has been applied to the expansion of our business.  This is a theme we intend to continue with warrant monies enabling growth in the Power Metal business model.

The Silver Peak project is a material addition to the Power Metal portfolio, bringing a strategic silver project into our business, and one that offers much potential upside from positive future exploration work.

Power Metal, alongside the vendors, intend to push ahead expeditiously with exploration on the ground. 

I would like to thank the vendors and the ground operational team for their work and commitment and it is a pleasure to work with proactive and supportive partners.  We have achieved much in just a month and look forward to continuing progress as we gather more Project knowledge through imminent planned exploration.”

FURTHER INFORMATION

Option Agreement and Due Diligence Exploration Programme

BackgroundOn 17 August 2020 the Company announced it had entered into an option agreement (the “Option Agreement”) in respect of the Project.The Option Agreement provided Power Metal the Option of a 30-day exclusivity period for due diligence in respect of the Project providing Power Metal, on Option exercise, with a right to earn-in to a 30% interest in the Project.As part of this due diligence process the Company undertook an exploration programme at the Project to gather further information and to assist the Company in its assessment of project prospectivity and potential.
Project OverviewThe Silver Peak Project consists of a portfolio of mineral claims (the “claims”) over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka-Victoria Silver Mine, at Silver Peak in southern British Columbia, Canada.  
Due Diligence Exploration Programme The work programme included various elements including channel sampling at close intervals perpendicular to the existing known high-grade veins and grab samples from a main target area between the lower elevations and the Victoria Adit. The work also included enhancement of road accessibility to the exploration area, and the collation of detailed photographic and video evidence of the project area for cross referencing to existing project technical information. A portable X-ray fluorescence analyser (pXRF) was utilised to provide in-field, geochemical analyses, in conjunction with confirmatory laboratory assay testing where appropriate. The work programme cost totalled C$25,000 (£14,512) and the amount expended will be deducted from the C$250,000 12-month project exploration spend as Power Metal has exercised the Option. 
Option ExercisePower Metal has now exercised the Option and can earn-in to a 30% Project interest.  The transaction costs relating to Option exercise and the earn-in to the Project interests are outlined below.
Next StepsContinue ongoing technical review and plan, prepare and launch an exploration drilling programme at the project, subject to the receipt of relevant approvals and permits.

THE TRANSACTION TERMS

The Vendor

The Project is currently 100% owned by private vendors Michael Nugent and Jo Shearer (the “Vendors”).

Right to Earn-in

Power Metal will now make a payment of £129,683 to the Vendors comprising CAD$30,000 (£17,183) cash and £112,500 through the issue of 9,000,000 new Ordinary Shares (the “Option Exercise Shares”) at a price of 1.25p per Option Exercise Share.

In addition, the Vendors will be granted 9,000,000 warrants to subscribe for new Ordinary Shares in the Company at a price of 1.75p with a three-year life to expiry.

Power Metal must then spend CAD$250,000 (£143,193) on Project exploration, within 12 months  (the “Exploration Spend”) and of this amount CAD$25,000 has already been expended on the due diligence exploration programme, leaving CAD$225,000 (£128,874) outstanding.

Acquisition of Project Interest

Subject to meeting the Exploration Spend and the receipt of satisfactory findings from exploration work, and by 31 August 2021, Power Metal may elect to acquire a 30% interest in the Project by making a final payment of CAD$200,000 (£114,554 and the “Final Payment”) with Power Metal having a choice to pay this in cash, or in Company shares, as follows.

Final Payment payable in cash:

–  Power Metal can make a final cash payment of CAD$200,000.

–  Should Power Metal make the Final Payment as cash, warrants will also be issued to the Vendors in such volume as equates to CAD$100,000 divided by the 7-trading day volume weighted average price of (“VWAP”) of Power Metal shares immediately preceding the day of announcing the acquisition of the Project interest and at a price that equates to a 30% premium to the 7-day VWAP and with a three year life to expiry.

Note: by way of example if the Acquisition of Project Interest Final Payment is paid as cash. 

If the CAD/GBP translation rate on the acquisition date is 0.57277 then CAD$100,000 equals c.£57,277.  If at that time the 7-day VWAP of Power Metal is 3.0p, then £57,277 divided by 3.0p would equate to 1,909,233 warrants to be issued, and the warrant exercise price would be 3.9p.

Final Payment payable in shares:

–  By payment of CAD$200,000 (£114,554) through the issue of Power Metal shares at a price based on the 7-trading day VWAP preceding the date of announcing the acquisition of the Project interest (“Final Payment Shares”).

–  Should Power Metal elect to make the Final Payment in Power Metal shares then the Vendors will be granted warrants to subscribe for new Ordinary Shares in such volume as equates to 50% of the Final Payment Shares and at an exercise price equating to a 30% premium of the issue price of the Final Payment Shares and with a three year life to expiry.

Note: by way of example if the Acquisition of Project Interest Final Payment is paid as shares. 

If the CAD/GBP translation rate on the acquisition date is 0.57277 then CAD$200,000 equals £114,554.  If at that time the 7-day VWAP of Power Metal is 3.0p, then £114,554 divided by 3.0p would equate to 3,818,467 new Ordinary Shares being issued to the Vendors.

In addition, 50% of the new Ordinary Shares would equate to 1,909,233 warrants to be issued, and the warrant exercise price would be 3.9p.

After the Acquisition of Project Interest

After completion of the Final Payment the ownership structure will be the Project Vendors 70% and Power Metal 30%.  Both parties must contribute to exploration costs thereafter, in line with their ownership percentage, or dilute in accordance with standard industry dilution provisions.

The Vendors will retain a 2% Net Smelter Royalty over the total Project.

Summary of Transaction Costs

For ease of reference the Option exercise and earn-in costs are summarised below:

When payableBenefit EarntVendor  Exploration Overall %
   Payments  Spend Totalof
   £  £ £Total
          
         
Option ExerciseRight to Earn-in129,683    129,68333.5
Within 12 monthsRight to Earn-in   143,193 143,19337.0
On acquisition of Interest30% Project Interest114,554    114,55429.5
          
          
 Overall Total (1)244,237  143,193 387,430100%
          

(1)   Excluding warrants issued in respect of the transaction, further details of which are provided above.

NEXT STEPS

Continue review of Project technical information, leading into an exploration drill programme at the Project.

COMPETENT PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 9,000,000 Option Exercise Shares to be admitted to trading on AIM which is expected to occur on or around 21 September 2020 (“Admission”). Following Admission of the Option Exercise Shares, POW’s ordinary issued share capital will comprise 810,066,542 ordinary shares of 0.1 pence each.

This number will represent the total voting rights in the Company, and following Admission, 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. The new shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

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 metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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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