Commercial Update

RNS Number : 5429K

Power Metal Resources PLC

22 December 2022

 

22 December 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Commercial Update

Power Metal Resources PLC (LON:POW),  the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces a commercial update providing the latest position in respect of various corporate activities recently completed or underway.

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

"I am a resolute believer in the junior resource sector and its ability to deliver considerable returns for investors. The sector is, ultimately, driven by cyclicity caused by shifting supply and demand fundamentals for the underlying metals.

Over the past 4 years, Power Metal has assembled a unique and diverse global project portfolio which is ready for what I believe will be a longstanding and robust bull market for junior resource companies.

After a long-sustained bear market for resource juniors, I believe that the sector recovery has now begun as demonstrated by rising metal prices and the evident growing demand for metals in most industrial settings and for investment security.

In the last 6 months we have seen the IPO of Power Metal investee company First Class Metals PLC and completion of the Kanye Resources disposal to Kavango Resources PLC. These two transactions alone brought additional listed securities into the Power Metal portfolio that are together currently worth c.£4.1m (at the mid-market price on 21.12.22 market close).

Below you will see a further five transactions which each have the potential to add considerably to the Power Metal balance sheet. This corporate activity will complement our ongoing and successful exploration work at the Molopo Farms Complex and Tati Gold projects both located in Botswana and our Athabasca Basin uranium interests in Canada.

I would like to thank our professional teams for working so diligently on multiple complex transactions and positioning us where we are today.  I also want to thank our shareholders who have stayed with us, through this challenging part of the cycle, patiently supporting us while we continue to push the business forward in advance of the next bull market.

We approach the Christmas and New Year break with a heightened sense of excitement and optimism for 2023 and beyond."

Company/Operations	POW %	Status
First Class Metals PLC (LON:FCM) Exploration in the Schreiber-Hemlo region of Ontario, Canada. www.firstclassmetalsplc.com	27.91%	Following the disposal of Power Metal's Schreiber-Hemlo interests to FCM in September 2021, FCM successfully secured admission to the Official List (by way of a Standard Listing under Chapter 14 of the Listing Rules), on 29 July 2022. Power Metal holds a total of 18,516,097 FCM shares, which are subject to a hard lock-in agreement until 29 July 2023, with a further 12-month orderly market arrangement thereafter. The Company also holds 517,705 warrants to acquire new FCM ordinary shares at a price of 10p and with an expiry date of 29 July 2023. At the closing market mid-price of 17p on 21 December 2022 the value of Power Metal's shareholding in FCM is £3,194,027.
Kavango Resources PLC (LON:KAV) Exploration in Botswana www.kavangoresources.com	9.85%	Following completion of the disposal of Power Metal's interest in the Kanye Resources joint venture back to partner KAV, as announced in November 2022, Power Metal's interests in KAV, which is also on the Official List of the London Stock Exchange, include: -  69,500,000 KAV ordinary shares. -  Warrants to acquire 4,750,000 KAV ordinary shares at a price of 2.5p (expiry April 2023) -  Warrants to acquire 30,000,000 KAV ordinary shares at a price of 4.25p (expiry January 2025) -  Warrants to acquire 30,000,000 KAV ordinary shares at a price of 5.5p (expiry January 2025) In addition, Power Metal holds a 1% net smelter return ("NSR") royalty across all Kanye Resources properties as at 8 July 2022. At the closing market mid-price of 1.5p on 21 December 2022 the value of Power Metal's shareholding in KAV is £1,042,500.
Golden Metal Resources PLC (GMT) Exploration and development in Nevada, USA. www.goldenmetalresources.com	83.13%	During 2021, Power Metal acquired outright three projects located in Nevada, USA (Pilot Mountain, Garfield and Stonewall) and secured an option to acquire a 100% interest in a fourth project (Golconda Summit). The projects were acquired through GMT, then a wholly-owned subsidiary of Power Metal and a vehicle incorporated in advance of a planned listing in the London capital markets. A subsequent Pre-IPO financing for GMT raised £750,000 before expenses. Power Metal currently holds 49,874,437 GMT shares or 83.13% of GMT issued share capital. GMT has now completed the pre-IPO work required and a listing document has now been prepared (subject to final data additions) and the IPO financing is underway. A series of roadshow meetings have been undertaken with interested parties including institutions based in Canada and the UK and to date the GMT business model and listing proposal has been well received. These meetings will continue over the coming weeks and into the new year, allowing those with conflicts during the holidays to finalise their interest in the IPO early in the new year. GMT is looking to complete the IPO Financing and, subject to standard regulatory approvals, the final listing steps in early 2023.
First Development Resources PLC (FDR) Exploration in Western Australia and the Northern Territory of Australia. www.firstdevelopmentresources.com	62.12%*	During 2021. Power Metal acquired three exploration projects in Western Australia (Wallal, Braeside West and Ripon Hills), The projects were acquired through FDR, then a wholly-owned subsidiary of Power Metal and a vehicle incorporated in advance of a planned listing in the London capital markets. Subsequently, in 2021, FDR acquired an additional exploration project in the Northern Territory of Australia (Selta).  Additional commercial transactions were undertaken by FDR in 2022 with the acquisition of a 100% interest in Pardoo Resources Pty Ltd (a project holding company) and the purchase of NSR royalties retained by the vendors of the vehicles holding the above projects. Power Metal currently holds 38,605,697 FDR shares or 62.12%* of FDR issued share capital. FDR is nearing completion of all the IPO work streams and is finalising the listing document in preparation for a planned IPO financing roadshow which is expected to commence in early 2023.
New Ballarat Gold PLC (NBGC) Exploration in the Victoria Goldfields of Australia. https://www.powermetalresources.com/project/victoria-goldfields/ .	49.9%	In 2020 Power Metal established a joint venture with Red Rock Resources PLC (LON:RRR) focused on exploration projects in the Victoria Goldfields, Australia. The joint venture has secured a ground footprint in the Victoria Goldfields comprising 1,841km2 of granted licences and 493km2 of exploration licence applications awaiting grant. The footprint includes two former high-grade working gold mines (Ajax and Berringa), with Berringa currently the subject of an ongoing diamond drilling programme. A National Instrument 43-101 technical report has been prepared covering 7 of the licences, as an underlying document in preparation for listing of NBGC. The joint venture has a local operational team and is based out of Ballarat, Victoria. Across the footprint extensive evidence of historical gold workings exist, and outside of the footprint boundaries numerous positive exploration updates have been noted by fellow exploration companies.  For example, we note recently the discovery of extensive gold mineralisation by Southern Cross Gold Ltd (a spin-out listing from Mawson Gold Ltd) included an intersection of 305.8m at 2.4g/t gold at their Sunday Creek project situated 5km east of the Kilmore project held by NBGC. Link here: https://wcsecure.weblink.com.au/pdf/SXG/02612149.pdf With the increasing confidence in the market and support for high-quality gold exploration investment opportunities, Power Metal is working with partner Red Rock Resources PLC to identify the best commercial structure and expeditious pathway to enable the planned listing to proceed.
NewCo Exploration in Queensland's Mount Isa copper belt and in South Australia. NewCo to be incorporated shortly to allow the merger of three companies and their interests in South Australia and Queensland as per POW RNS 15.12.22). NewCo website under development.	20% ^	Power Metal announced on 15.11.22 the merger of its wholly owned Australian holding company which holds a 100% interest in the Wilan Project located in South Australia, with two other Australian exploration companies with 100% owned interests in the Mount Isa copper belt region of Queensland, Australia. The intention is to secure a planned new listing on a recognised stock exchange of the new merger company NewCo, comprising the South Australia and Queensland interests, or to dispose of the new merger company into a currently listed or to be listed vehicle. Work is underway now to consider all available options and updates will be provided to the market in due course.
Uranium Energy Exploration PLC (UEE) Uranium exploration in the Athabasca region of Canada www.uraniumenergyexploration.com	50-55%~	Power Metal has agreed the disposal of two uranium properties to UEE subject to completion of a planned listing of UEE. Following discussions with UEE, Power Metal has agreed to extend the period for completion of the planned listing by 3 months to 31 March 2023. The intention is to list on a different exchange to that previously planned and to add further uranium projects to the UEE portfolio prior to the planned listing. As a result, UEE is now actively reviewing additional opportunities within the uranium space to bolster their portfolio in advance of the planned listing. The proposed business model (Uranium exploration focused on the Athabasca Basin area of Saskatchewan, Canada) has the support in principle of proposed investors in an IPO financing and would bring the first Athabasca focused investment proposition to the London capital markets. Further updates to follow as plans continue to advance.

^{^} subject to completion of Merger announced 15.12.22.

^~ subject to completion of disposal of Reitenbach and E-12 properties, announced on 8.8.22 and 4.11.22, respectively.

^* reducing to 58.59% on issue of equity for NSR buyout announced 5.12.22

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 - Background

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, base and strategic 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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