Acquisition - Canadian Gold Exploration Properties
21 January 2021
Power Metal Resources PLC
("Power Metal" or the "Company")
Acquisition of Canadian Gold Exploration Properties
Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce the Company has signed an agreement to acquire a 100% interest in a package of three gold exploration projects located in the prospective Hemlo North area of Ontario, Canada (together the "Project").
The Project includes three contiguous exploration projects Roger Lake, Olga Lake and Dotted East which together cover an area of 25.82km2 centred approximately 29km north-east of Barrick Gold Corporation's Hemlo Mine which has produced more than 21Moz of gold to date1.
The Project map may be viewed on the Company's website through the following link:
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
"The acquisition of three exploration projects covering a significant portion of prospective greenstone belt in mining and investment friendly Ontario is a significant development for Power Metals.
The acquisition comes at a highly competitive time when this part of Canada is attracting a significant amount of investment from Canadian listed junior explorers.
The Project has the potential for both gold and base metal discoveries in an under explored area which offers Power Metal, as a proactive exploration company, the potential to add significant value through early stage exploration success."
- The Project presents an early stage exploration opportunity prospective for hosting both gold and base metal mineralisation, situated over an underexplored part of the very prospective Hemlo-Schreiber Greenstone Belt.
- The Project consists a total of 122 Single Cell Mining Claims ("Claims") being vended as three contiguous claim packages (exploration projects); Roger Lake (50 Claims); Olga Lake (42 Claims); and Dotted East (30 Claims).
- The 122 claims cover a total area of 25.82km2 and are valid through to between 24 July 2022 to 12 December 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Project claims will require an aggregate work spend of CAN$48,800 (circa £28,113) staged prior to the individual claim renewal dates.
- Access into the area is good with a gravel road running through the centre of the project leading south to Hemlo.
- The Project footprint is located directly adjacent, to west of the Palladium One Mining Inc (TSX-V:PDM) Tyko Ni-Cu-PGE Project where a 2020 drilling programme intersected massive sulphides grading up to 7.5m @ 4.5% Ni, 2.9% Cu & 1.0g/t PGE from 5.3 meters down-hole2 over a mineralised target striking 270m.
- Adjacent and east of the Panther Metals PLC (LSE:PALM) Dotted Lake property where recent surface sampling confirmed high grade gold (18.9g/t Au) at surface3.
The Acquisition Terms:
- The vendors of the Project (the "Vendors") are established local prospectors who will continue to work with Power Metal in the local management of the Project; the development and implementation of exploration plans and the identification of new opportunities.
- The cost of acquisition of the Project is CAD$120,000 (circa £69,130) of which CAD$60,000 (circa £34,565) will be paid in cash and CAD$60,000 through the issue to the Vendors of 1,152,233 new Ordinary Shares of 0.1p each in the Company at an issue price of 3.0 pence per share ("Acquisition Shares").
- The cash costs of the acquisition will be funded from Power Metal's existing Canadian Dollar cash account.
- The Vendors will retain a 2% net smelter royalty ("NSR") in respect of the Exploration Properties. Power Metal may purchase 1% in total of this NSR at any time by making a cash payment of CAD$500,000 to the Vendors.
The Exploration Plan:
- Ongoing exploration spend is at the discretion of Power Metal as the 100% owner of the Project.
- Preliminary exploration work planned for the project will include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.
- The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost effective basis.
ADMISSION AND TOTAL VOTING RIGHTS
Application will be made for the 1,152,233 Acquisition Shares to be admitted to trading on AIM, which is expected to occur on or around 28 January 2021 ("Admission"). The Acquisition Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.
Following Admission, the Company's issued share capital will comprise 1,062,775,868 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O'Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules - Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.
Source 1: Barrick Gold Corporation https://www.barrick.com/English/operations/hemlo/default.aspx
Source 2: Paladium One Mining Inc announcement https://www.palladiumoneinc.com/assets/docs/news/2021-01-19-NR-PDM-B1D54LTo0P.pdf
Source 3: Panther Metals PLC announcement https://polaris.brighterir.com/public/panther_metals/news/rns/story/x5ojz0r
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)
+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.