Financing Raises £1,000,000

RNS Number : 1432S

Power Metal Resources PLC

06 July 2020

 

6 July 2020

Power Metal Resources plc ("Power Metal" or the "Company")

Financing Raises £1,000,000

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  announce that it has raised £1,000,000 through a subscription (the "Financing") to support strategic expansion of exploration activities and commercialisation of selected project interests. 

HIGHLIGHTS

· The Financing will support the acceleration of project exploration across the Company's current portfolio of interests and enable proactive and robust negotiations in respect of commercialisation activities where the Company is seeking to crystallise value and further bolster its 'balance sheet' (see below for an outline of the Company's plans);

· Power Metal has raised £1,000,000 at price of 0.475p per share (the market closing mid-price at on Friday 3 July 2020) through the issue of 210,526,316 new ordinary shares of 0.1 pence each in the Company (the "Subscription Shares") ;

·   Each Subscription Share will have an attaching warrant with an exercise period of two years from admission of the Subscription Shares and exercisable at 0.75p per new ordinary share of 0.1 pence each in the Company ("Ordinary Share"), creating 210,526,316 new warrants (the "Financing Warrants") which are subject to an acceleration clause whereby should the Company's volume weighted average share price exceed 3.00p for 5 consecutive trading days, the Company may at any time write to warrant holders providing 10 working days' notice of accelerated exercise, with 10 working days thereafter for payment;

· POW Board members have subscribed for a total of 31,710,526 Subscription Shares for an amount invested of £150,625, with Paul Johnson CEO, investing £95,000 through his family company Value Generation Limited;

· The funds raised will increase the available working capital (cash and listed financial instruments only) of the Company to over £1.5 million.

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

"The £1 million raised today, when added to our existing material working capital, changes the dynamic for Power Metal, enabling us to boldly go forward and invest strongly in the avenues we anticipate can create real value for the Company and its shareholders.

We raised at the market price, which is notable, as the protection of existing shareholders is important to us.  Moreover, board members have invested £150,625 in the Financing standing alongside our shareholders to demonstrate belief in the vision we have for the Company.

Our strategic aims underlying that vision are clear.  We are aiming for a major discovery or discoveries in our portfolio of projects, not an easy feat but possible with the support of shareholders and new investors in the manner we have seen today.  However, being reliant on the market for finance is not enough and is perhaps the one area that makes junior resource companies vulnerable. So, another strategic aim is to strengthen our working capital rapidly by crystallising value from some of our interests and building our Company 'balance sheet'. By doing so we are aiming for financial self-sufficiency, another challenging target but one we are striving for in earnest.

We aim to do things differently, to surprise the market with innovation and a level of driven determination rarely matched by our peers."

COMPANY PLANS POST FINANCING

BUSINESS AREA	PROPOSED ACTION PLAN/AREAS OF POTENTIAL NEWSFLOW
Arizona US - Alamo Gold Project (Gold)	Power Metal is in discussions with the vendors of an option to acquire a Right to Earn-in to the Alamo gold project in Arizona, USA.  We will seek to conclude discussions at the earliest opportunity, and if successful we will look to implement an early exploration programme across the project.
Australia JV - Victoria Goldfields (Gold)	Joint Venture partners Power Metal (49.9%) and Red Rock Resources plc (50.1%) will seek to: -  Finalise a project database confirming the extent of gold mineralisation and historical production across all ten licence application areas -  Utilise database to further enhance and target expeditious exploration plans in preparation for licence grant -  Work proactively with our land management advisors and Earth Resources Victoria to seek the grant of priority licence application areas -  Continue review of the potential to list the JV Company on a North American Stock Exchange -  Pursue proactively other crystallisation events in respect of the interests
Botswana - Ditau Camp Project (Rare Earths)	Power Metal and its technical advisers will seek to expedite the Ditau project due diligence which if successful will see the Company holding a 51% interest and partner Kavango Resources plc (LON:KAV) holding 49%.  On successful due diligence completion the partners would work together to launch a follow up exploration programme.
Botswana - Molopo Farms Complex (Nickel - Copper - PGMs)	Planning continues for drilling at the Molopo Farms Complex project.  By expending US$500,000 to undertake the drill programme Power Metal will earn a 40% direct project interest (effective economic interest 50.96% as Power Metal also owns 18.26% of Kalahari Key Mineral Exploration Pty Ltd, the ultimate holding company of the project). Approval of the Environmental Management Plan is the next step and when received will allow final preparations including contractor selection and mobilisation.  Drill targets and holes are defined and the programme will seek the discovery of a major nickel sulphide deposit.
Cameroon Project (Cobalt - Nickel)	Review work to be accelerated to outline the next steps for the 100% owned project, including the potential to undertake additional exploration after the rainy season and/or commercialisation of Power Metal's 100% interest.
The DRC - Kisinka Project (Copper - Cobalt)	Following the confirmation and extension of the 6.8km copper anomaly recently and positive X-ray fluorescence results indicating the presence of cobalt and copper, the company is awaiting receipt of assay results.  This will complete the exploration dataset from the H1 2020 programme and help drive the next steps, which are expected to involve geophysics and further pitting, leading to drilling of key targets at this Power Metal 70% owned project.
Tanzania - Haneti Project (Nickel - PGMs - Gold - Lithium)	Power Metal will continue to work with joint venture partner Katoro Gold plc (LON:KAT) in respect of operational plans for  Haneti which is 25% held by Power Metal, and 75% by Katoro Gold.  Power Metal may increase its holding to 35% by paying Katoro Gold £25,000 in cash by 31 August 2020. Power Metal also notes the interest of third parties in respect of Haneti and notes therefore that third party involvement in the project, if occurring, could materially change the joint venture partners' plans.

RELATED PARTY DISCLOSURE

The subscriptions by each of Andrew Bell, Paul Johnson and Edmund Shaw in the Financing constitute related party transactions under Rule 13 of the AIM Rules for Companies. The Directors (other than Andrew Bell, Paul Johnson and Edmund Shaw) consider that, having consulted with the Company's nominated adviser, the subscription by Andrew Bell, Paul Johnson and Edmund Shaw in the Financing is fair and reasonable in so far as shareholders are concerned.

The shareholdings of Andrew Bell, Paul Johnson and Edmund Shaw on Admission will be as follows:

Director	Shares Currently Held	Subscription Shares	Total Shares After Admission of Subscription Shares	% of Total Issued Share Capital
Andrew Bell	17,770,000	4,210,526	21,980,526	2.88%
Paul Johnson	33,600,000	20,000,000	53,600,000	7.02%
Edmund Shaw	5,000,000	7,500,000	12,500,000	1.64%

The warrant holdings of Andrew Bell, Paul Johnson and Edmund Shaw on Admission will be as follows:

Director	Number of Warrants	Warrant Exercise Price	Expiry Date
Andrew Bell	10,000,000	1.00p	15/02/2021
	6,250,000	0.70p	17/12/2021
*	4,210,526	0.75p	20/07/2022
Paul Johnson	10,000,000	1.00p	15/02/2021
	6,250,000	0.70p	17/12/2021
*	20,000,000	0.75p	20/07/2022
Edmund Shaw	6,250,000	0.70p	17/12/2021
*	7,500,000	0.75p	20/07/2022
*  Financing Warrants granted pursuant to the Financing

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the Subscription Shares to be admitted to trading on AIM which is expected to occur on or around 20 July 2020 ("Admission"). Following Admission of the Placing and Subscription Shares, POW's ordinary issued share capital will comprise 763,216,542 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.

PDMR ('Person Discharging Managerial Responsibilities") DISCLOSURES

The notifications below, made in accordance with the requirements of the EU Market Abuse Regulation, provide further detail on the director's share dealing.

1	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	1.  Andrew Bell
2	Reason for the notification
a)	Position/status	1.  Executive Chairman
b)	Initial notification /Amendment	Initial Notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Power Metal Resources Plc
b)	LEI	213800VNXOUPHTX53686
4	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument	ordinary shares of 0.1p each
	Identification code	ISIN: GB00BYWJZ743
b)	Nature of the transaction	1.  Subscription for shares 2.  Grant of Warrants pursuant to the Fundraising
c)	Price(s) and volume(s)
			Price(s)	Volume(s)
			1.  0.475 pence	4,210,526
			2.  0.75 pence	4,210,526
d)	Aggregated information
	- Aggregated volume	Price(s) Volume(s) 1.  0.475 pence 4,210,526 2.  0.75 pence 4,210,526
	- Price
e)	Date of the transaction	6 July 2020
f)	Place of the transaction	XLON

1	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	1.  Paul Johnson
2	Reason for the notification
a)	Position/status	1.  Chief Executive Officer
b)	Initial notification /Amendment	Initial Notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Power Metal Resources Plc
b)	LEI	213800VNXOUPHTX53686
4	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument	ordinary shares of 0.1p each
	Identification code	ISIN: GB00BYWJZ743
b)	Nature of the transaction	1.  Subscription for Shares 2.  Grant of Warrants pursuant to the Fundraising
c)	Price(s) and volume(s)
			Price(s)	Volume(s)
			1.  0.475 pence	20,000,000
			2.  0.75 pence	20,000,000
d)	Aggregated information
	- Aggregated volume	Price(s) Volume(s) 1.  0.475 pence 20,000,000 2.  0.75 pence 20,000,000
	- Price
e)	Date of the transaction	6 July 2020
f)	Place of the transaction	XLON

1	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	1.  Edmund Shaw
2	Reason for the notification
a)	Position/status	1.  Non-executive Director
b)	Initial notification /Amendment	Initial Notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Power Metal Resources Plc
b)	LEI	213800VNXOUPHTX53686
4	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument	ordinary shares of 0.1p each
	Identification code	ISIN: GB00BYWJZ743
b)	Nature of the transaction	1.  Subscription for Shares 2.  Grant of Warrants pursuant to the Fundraising
c)	Price(s) and volume(s)
			Price(s)	Volume(s)
			1.  0.475 pence	7,500,000
			2.  0.75 pence	7,500,000
d)	Aggregated information
	- Aggregated volume	Price(s) Volume(s) 1.  0.475 pence 7,500,000 2.  0.75 pence 7,500,000
	- Price
e)	Date of the transaction	6 July 2020
f)	Place of the transaction	XLON

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)	[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 company seeking a large scale discovery of precious or base metals.

The Company has a portfolio including key interests in Australia, Botswana, Cameroon, The DRC and Tanzania.  The interests represent large scale exploration projects targeting mainly cobalt, copper, gold, nickel and platinum group metals. 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 metals exploration.

 

END

 

 

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