TIDMPOW
RNS Number : 8175B
Power Metal Resources PLC
04 February 2020
4 February 2020
Power Metal Resources plc ("POW" or the "Company")
Arizona USA - Alamo Project Update
Power Metal Resources plc (LON:POW) the AIM listed metals
exploration and development company is pleased to announce
developments in respect of the Alamo project (the "Project") in
Arizona, USA.
Readers are advised to review the Company's announcement in
respect of the Alamo Project dated 3 December 2019 and which can be
viewed through the following link:
https://www.powermetalresources.com/n/n169/arizona-usa-alamo-project-opportunity
HIGHLIGHTS:
-- Initial due diligence in respect of the Project has been
completed successfully, including a site visit by the POW Chairman,
POW CEO and the Company's Competent Person.
-- Project shows evidence of possible epithermal mineralisation
possibly related to a deep-seated porphyry intrusion. Evidence of
intrusive dykes and structural conduits support the Project's
prospectivity.
-- Presence of gold nuggets within the Project area was
confirmed during the POW visit. Under POW oversight an approximate
3m(2) test pit, up to 30cm deep, was excavated in an area of
undisturbed vegetated ground coinciding with the perceived trend of
intrusive dykes. Using a metal detector supplied by a local
prospector, three small gold nuggets were recovered from the
material excavated.
-- This sampling demonstrated the presence of coarse,
near-surface gold while the topographical surface morphology
supports a likely proximal hard-rock source for the gold. The
findings also provide some support to reports that some 60 ounces
of gold nuggets have been recovered within the Project area (the
largest nugget reportedly weighing approximately 5 ounces).
-- Findings of the POW visit also indicate that the package of
claims should be extended to include a sufficient buffer around the
prospective area.
-- The vendors have waived the previous extension fees
(comprising the issue of a further 2,911,387 new ordinary shares of
0.1 pence each ("New Ordinary Shares") to the vendors at a price of
0.4p per share (GBP11,646) for an additional 30 days added to the
due diligence period), and POW have agreed to spend a minimum of
US$20,000 to complete additional exploration work and secure
additional ground, in exchange for an extension to the due
diligence period to 20 April 2020.
-- Additional exploration work is likely to include the
acquisition and assessment of satellite remote sensing datasets to
obtain additional information on structure and alteration
mapping.
Paul Johnson Chief Executive Officer of Power Metal Resources
plc commented: "We are pleased with the progress made regarding our
assessment of the Alamo Project. The identification of a potential
porphyry engine for the phenomena seen at surface is of particular
interest.
In addition, we are encouraged by the confirmation of
near-surface gold nuggets, through a very limited metal detecting
exercise and the potential for a proximal bedrock gold source
within the Project area.
We now need to ensure that the claims package is complete and
covers the prospective ground with a sufficient buffer and will
undertake some additional work to ratify our assumptions to
date.
We will discuss in greater detail the terms of a potential
transaction upon conclusion of our due diligence.
I look forward to providing our shareholders with further
updates in due course."
VORS AND FORMATION OF SPECIAL ADVISORY COMMITTEE
The right to earn into the Alamo Project is held by the vendors
Joe Carrabba and Murray Nye (see below and the "Vendors")
Subject to successful completion of project due diligence and
POW exercising the right to earn into the Alamo Project, the
Company will form an advisory committee on which the Vendors will
collaboratively work alongside POW in the development of the
Project.
The respective experience of the Vendors in both operating and
developing mining projects through all phases of the development
curve, as outlined below, will prove valuable when assessing how
best to augment value in the Alamo Project.
Joe Carrabba
Mr Carrabba is a seasoned mining executive, who has held senior
positions in the industry including as a director of Newmont
Goldcorp Corp and as former President and Chief Operating Officer
of the largest independent iron ore producer in the U.S., Cliffs
Natural Resources Inc.
Murray Nye
Mr Nye has extensive experience in international corporate
finance and currently serves as the Chief Executive Officer of
Winston Gold Corp (CSE: WGC). Prior to Winston, Mr Nye was the
former CEO of RX Exploration Inc. ("RX") where he brought the
historic Drumlummon Gold/Silver mine back into production. During
Mr Nye's tenure, the market valuation of RX increased from a base
of circa $1.5m to circa $80m
REVISED TRANSACTION TERMS
The Project is currently 100% owned by Frisco Gold Corporation,
Bullhead City, Arizona, USA.
The Vendors currently hold an option for a right to earn in to
60% of the Project by covering property payments over a four-year
period and exploration expenditure over a three-year period, (the
"Option") as outlined below. POW has signed an agreement to acquire
the Option, subject to the satisfactory completion of due
diligence.
-- On 3 December 2019 POW entered into a 45-day due diligence
period to enable Project inspection and an initial work programme
including Nugget verification and geochemical sampling to validate
Project prospectivity (the "Due Diligence Period"). The fee payable
to the Vendors to enter into the Due Diligence Period is US$25,000
payable through the issue of 4,852,125New Ordinary Shares (the "Due
Diligence Shares") at price of 0.4p per share (GBP19,409).
-- The Due Diligence Shares are subject to a period of 4 months
where they may not be sold without the written approval of the
Company. Should POW shares trade at a volume weighted average price
("VWAP") of 1.5p or more for seven consecutive trading days, or
should POW decide not to acquire the Vendors' Option, the Due
Diligence Shares and Additional Due Diligence Shares would become
freely tradable.
-- The Due Diligence period has been extended to 20 April 2020,
to enable the acquisition of additional claims in the area of the
original claims package thus covering the zone of prospectivity
identified and to enable certain additional exploration work to be
undertaken to increase knowledge of the prospective
mineralisation.
-- To acquire the Option from the Vendors, on satisfactory
completion of due diligence, POW would pay the Vendors a further
US$250,000 payable through the issue of 38,814,500 New Ordinary
Shares (the "Consideration Shares") at a price of 0.5p per share
(GBP194,073) and grant a warrant over 38,814,500 New Ordinary
Shares (the "Consideration Warrants") at an exercise price of 1.0p
per share and with a three year life to expiry.
-- The Consideration Shares shall also be subject to a period of
four months where they may not be sold without the express written
approval of the Company. Should POW shares trade at a VWAP of 1.5p
or more for seven consecutive trading days, the Consideration
Shares would become freely tradable.
-- Upon acquiring the Vendors' Option, POW will be the operator
of the Project, working in conjunction with a newly appointed
advisory committee including Joe Carrabba and Murray Nye and will
seek to form an Operating Committee with the current project
owners.
-- Upon acquiring the Vendors' Option and establishment of the
advisory committee POW will award share options over 2,500,000 New
Ordinary Shares to Joe Carrabba and Murray Nye respectively (5
million options in total). The share options will be awarded for
advisory committee services and will be exercisable at 1.0p per New
Ordinary Share and have a life to expiry of three years. These
share options may however only be exercised if the share price of
POW exceeds a VWAP of 1.5p for seven consecutive trading days.
-- After acquiring the Vendors' Option, POW can earn into a 60%
interest in the Alamo Project by expending US$1,100,000 (circa
GBP850,000) on property payments over a four year period and
exploration work costs over a three year period. First year costs
are modest and would amount to US$150,000 (circa GBP116,232).
-- Upon completion of the earn into the Project, POW must
contribute to 60% of ongoing Project expenditure to maintain its
60% interest. Likewise, following the POW earn in, Frisco Gold
Corporation must contribute to 40% of Project expenditure to
maintain their 40% holding. If either party does not contribute in
line with their percentage ownership, they will dilute their
ownership percentage in line with a standard industry dilution
formula.
Competent Person's 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.
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 +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 exploring for the key metals
used in power generation, transmission, storage and utilisation.
The Board and team of advisors, who have proven expertise in
exploration, mining and project generation, have identified an
opportunity to utilise the Company's position to become a leader in
the London market for investors to gain exposure to the power metal
commodity suite, particularly cobalt, lithium, copper and
nickel.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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