Australian Gold JV Corporate & Exploration Update

RNS Number : 9288H

Power Metal Resources PLC

09 August 2021

 

9 August 2021

Power Metal Resources PLC

("Power Metal" or the "Company")

Australian Gold Joint Venture - Corporate & Exploration Update

Ground Exploration Advances at Pace With Initial Drill Targets Identified and Listing Plans Now Focused on the London Market

Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces a corporate and exploration update in respect to its Australian gold joint venture, Red Rock Australiasia Pty Ltd ("RRAL" or the "Joint Venture").

Power Metal owns 49.9% of RRAL, with the other 50.1% being owned by Red Rock Resources plc ("Red Rock").

RRAL holds extensive gold exploration interests near the historic mining centre of Ballarat in the Victoria Goldfields, Australia.

The most recent update in regards to RRAL was provided by the company on 29 April 2021 and can be found at the link below.

Australia Gold Joint Venture - Update - 15:00:01 29 Apr 2021 - POW News article | London Stock Exchange

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

"The Joint Venture's technical team have gathered extensive evidence of gold mineralisation including several high-tenor kilometre-scale anomalies along strike and to the south of the Ballarat Gold Mine ¹.

Three exciting targets within the portfolio have now been designated for drilling, with more expected in the near term. The Company plans to commence inaugaral diamond drilling operations in late 2021.

The Joint Venture controls a substantial licence footprint in the Victorian Goldfields and we are intending to cover all areas held with systematic exploration. We believe there is good potential for major new gold discoveries within areas which have historic gold mines and known gold occurrences but which remain untested using modern exploration technologies.

Our work in respect of seeking a public listing for the core interests of RRAL continues, and  after further consultation and review, we are now focusing on a planned primary RRAL listing in London, with a proposed trading facility in North America as a secondary step.

There are a number of advantages to a primary UK listing, including for Power Metal the increased ease of a potential distribution of shares in the listed vehicle, something we have indicated previously was under consideration. In addition, timing, established relationships, familiarity with the processes, short lines of communications at a time of restricted travel, and the existence of suitable comparators were all factors in this decision.

Preparatory work in relation to the listing process is underway and notably, we have the technical Competent Person's Report ("CPR") ready, an important constituent part of the listing process.

Further updates to the market in respect of ongoing exploration and corporate developments are expected to flow more frequently going forward, as we now have momentum running across all areas of the Joint Venture." 

Highlights:

· Dedicated Victoria-based technical team in place which is led by exploration manager Dave Holden with over 30 years of project management experience across Australia. Mr. Holden was an integral part of the exploration teams that were credited with the gold discoveries of Nimary and Jundee in Western Australia, as well as Mt. Todd and Brocks Creek in the Northern Territory.

· Ongoing historical data compilation has led to the discovery of multiple overlooked historic mines, located within various granted tenements within the package, which are now designated for follow up ground-based reconnaisance and prospecting programmes.

· A number of ground-based programmes across the tenement package are in progress, including a extensive soil sampling programme targeting the possible southern extension of the Ballarat Mines. The soil sampling programme, uitilised a portable X-ray fluorescence spectrometer ("pXRF") to focus on arsenic distribution as this is a previously identified path finder to gold mineralisation at Ballarat. The results have produced several high-tenor kilometre-scale anomalies which trend along strike, south of the Ballarat Mines.

· Historical research, modelling of old mines, and confirmation from soil sampling data  has enabled RRAL to identify three drill ready targets (outlined below at Figure 1), with more expected within the coming months. Drill proposals are at various stages of finalisation in anticipation of  carrying out up to three drill programmes later In the year.

· After consulting with various parties, and a review of the optimal outcome for what the Company considers to be a highly valuable business interest, it has been decided that the best commercial path forward for RRAL is to obtain a London-based listing. This process has now been started and the Company will provide updates to the market periodically with regard to the listing process in the coming months.

Figure 1 highlights the location of the various project areas and areas of Interest discussed below and may be viewed through the following link on the Company's website:

https://www.powermetalresources.com/rral-project-area-locations/

Project Specific Updates:

DeReel Prospect

Re-evaluation of historical data at DeReel (EL007327) has led to the discovery of the Golden Reef line of mineralisation which was actively mined at the turn of the last century. The mining (identified primarily as the DeReel Mine) exploited a high-grade lode gold system. Mining followed the gold bearing quartz veins (or "reef") down to approximately 80 metres vertical depth and extended along strike for roughly 300 metres.

Initial investigations suggest the geology is similar to other typical geologies around the  Ballarat and Bendigo mining centres. A well-defined anticline to the west and the major steeply west dipping Pinchgut fault cross-cutting the anticline has produced quartz saddle reefs in the fold hinge with associated flat lying quartz spurs. 

A similar second structure west of the main reef may be an upper bounding structure and offers an opportunity for a second line of reef not previously exploited with the possibility of further mineralisation developing between the two structures.

Ambiguities over early production suggest some of the gold may be fine and associated with sulphides and may not have been recoverable by original mining efforts. 

An initial diamond drill programme is planned for late 2021 of up to 1,200m of drilling looking for the along strike and down plunge extensions of the historic mines operating along the Golden Reef line.

Mt Bute Prospect

Re-evaluation of historical data at Mt Bute (EL007301) has identified a linear arsenic geochemical soil anomaly with associated elevated gold values centred on a small cluster of historical shafts south of Linton, Victoria.  The prospect is part of a much longer zone informally referred to as the Linton trend which may extend many kilometres.

Metex Resources in the 1990's enhanced the prospectivity of the Mt Bute prospect by conducting a limited shallow reverse circulation drilling through the centre of the arsenic anomaly.  Metex's mandate was to search for suitable oxide material at or near surface with a view to high-tonnage low-grade open pit recovery, which did not focus on the structural or mineralogical elements that diamond drilling may have identified.  RRAL believes that high-grade narrow quartz reef mining is more likely suitable at the Linton trend based upon other known deposits in the area and anticipates more coherent and elevated grade to occur below the surficial weathering.

Three dimentional modelling of the geology, drill results and other data sets currently available are providing a valuable visual support to drill planning.  RRAL is working towards a maiden diamond drill programme at the prospect before the end of the current year comprising at least 600 metres. 

In addition, RRAL is looking to extend its regional pXRF programme to the north and east of Mt Bute to cover folded and faulted Ordovician age rocks to the east and along strike from the known Mt Bute prospect.

In the centre of the tenement, another previously overlooked historical mine has presented further opportunities for advanced exploration.  The Gribbles/Linton mine extends down to approximately 65 metres and produced gold from both quartz reefs and 'flat makes' (shallow dipping quartz veins). Further ground-based work is planned.

O'Laughlins Prospect 

Preliminary results from the recently completed pXRF soil geochemical survey has produced well-defined arsenic anomalies in areas south of the main Ballarat and Scotsburn lines of gold mineralisation. One advanced target, which has been confirmed by the recent geochemical sampling, marks the southern end of the Scotsburn line of gold workings. The elevated arsenic values returned coincide well with historical workings, structural trends and a potassic anomaly identified from airborne radiometric data from the late 1980s.

The planning and permitting process is under way for the inagural drilling campaign on the prospect planned for late 2021. Further mapping and sampling is also being undertaken in advance of drilling to develop a more detailed picture of the Scotsburn line of mineralisation. 

Of immediate focus for drilling is the western side of the O'Laughlins Prospect where numerous workings are identified as the historic Enfield reef.  Little historical literature exists for these workings other than a single reference to a reef where processing of gold was associated with sulphide in quartz. There are clear structural targets for mineralisation in this area where regional structural trends align north-northeast and steeply dip to the west .

Variations to the traditional Ballarat geological model at Enfield Reef are now considered possible where east -west striking flatter-lying quartz veins and steeply dipping east-west striking dykes have been mentioned  at the turn of last century in other writings on the regional geology.

Figure 2 shows arsenic soil sample results and may be viewed through the following link on the Company's website:

https://www.powermetalresources.com/rral-arsenic-soil-sample-results/

Kilmore Prospect

RRAL has also commenced work on the easternmost tenement immediately north of Melbourne. Within this tenement, strong structural folding and faulting identified by historical mapping appear to correlate well with strong antimony anomalism identified in regional ASTER² remote sensing data.

In addition, first pass historical research has uncovered the Donnybrook gold field, where production from the identified mine was from narrow (sub 0.25m) veins which reportedly returned very high grades of about 4 ounces a ton (approx. 120g/t gold). 

Further work by the in-country operations team on this prospect is ongoing with a view to determining if the structures develop at depth and along strike.  Drilling is anticipated early in the new year pending the outcomes of the ongoing geological reconnaissance investigations.

FURTHER INFORMATION

Joint Venture Company - RRAL

RRAL is a joint venture company 50.1% owned by Red Rock and 49.9% owned by Power Metal. Paul Johnson, CEO of Power Metal and Andrew Bell Chairman of Power Metal are directors of RRAL.

Granted Licences

RRAL has a seven granted exploration licences as listed below. These licences cover high priority areas where RRAL has early drill targets and in which exploration has already started.

Licence Number	Project Name	Area (km2)
EL007271	Blue Whale	133
EL007281	Blue Chip	74
EL007285	Blue Ribbon	8
EL007327	Dereel	60
EL007385	Sardinia	4
EL007329	Kilmore	484
EL007301	Pitfield/Mt Bute	85
Total		848

Applications

RRAL has applications in process for nine gold exploration licence areas covering approximately 1,458km² in the Victoria Goldfields of Australia as follows:

Licence Application Number	Project Name	Area (km2)
EL007282	Blue Sky	489
EL007294	Red Queen	130
EL007328	Blue Yonder	164
EL007330	Blue Angel	202
EL007460	Kilmore West	325
State land within EL007271 [EL007505 EL007506 EL007507]		[9 9 8]
EL007540* (3 competing applications)	Outer Ballarat	148
Total		c 1,458

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

The following applications have been made in Western Australia. The two where there is another applicant will be subject to a ballot.

Licence Application Number	Project Area	Area (km2)
EL45/5859 (One competing application)	Paterson	227
EL45/5885	Pilbara/Paterson	70
EL45/5881 (One competing application)	Pilbara/Paterson	33

COMPETENT PERSON STATEMENT

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

References & Notes

1  The Ballarat Gold mIne is a modern underground mine operated below the city of Ballarat by Golden Point Group PTY Ltd (see https://ballaratgoldmine.com.au ).  For a history of gold mining in and around Ballarat in Victoria also see https://earthresources.vic.gov.au/geology-exploration/minerals/metals/gold/gold-mining-in-victoria  

2  ASTER: Advanced Spaceborne Thermal Emission and Reflection Radiometer (ASTER) is a satellite bourne intrument. ASTER data is used for a range of applications, including mapping alteration patterns or specific mineral assemblages known to be associated with mineral systems and the generation of digital elevation models .

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc
Paul Johnson (Chief Executive Officer)	[phone]
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat	[phone]
SI Capital Limited (Joint Broker)
Nick Emerson	[phone]
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson	[phone]

NOTES TO EDITORS

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration and development Power Metal Resources plc (LON:POW) is an AIM listed metals exploration company which finances and manages global resource projects and is seeking large scale metal discoveries.

The Company has a principal focus on opportunities offering district scale potential across a global portfolio including precious and base metal exploration in North America, Africa and Australia.

Project interests range from early-stage greenfield exploration to later-stage prospects currently subject to drill programmes.

Power Metal will develop projects internally or through strategic joint ventures until a project becomes ready for disposal through outright sale or separate listing on a recognised stock exchange thereby crystallising the value generated from our internal exploration and development work.

Value generated through disposals will be deployed internally to drive the Company's growth or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.

 

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