TIDMPOW
RNS Number : 9103K
Power Metal Resources PLC
07 September 2021
7 September 2021
Power Metal Resources plc
("Power Metal" or the "Company")
Sale of Schreiber-Hemlo Interests for GBP1 million
Power Metal Sells its 100% owned Schreiber-Hemlo Interests to
First Class Metals Ltd which is planning to list in London in
2021
Power Metal Resources plc (LON:POW), the London listed
exploration company seeking large-scale metal discoveries across
its global project portfolio, is pleased to announce the sale of
its Schreiber-Hemlo project interests in Ontario, Canada to First
Class Metals Ltd ("First Class" or "FCM").
HIGHLIGHTS
-- Sale of Power Metal's Schreiber-Hemlo project interests to
First Class for GBP1 million consideration payable through the
issue of 333,334 new ordinary shares of GBP1 each in First Class
Metals Ltd ("First Class Shares") at a price of GBP3 per share.
-- First Class is a UK private company with an existing
portfolio of interests in the Schreiber-Hemlo region held through
its Canadian operating subsidiary First Class Metals Inc. and is
currently seeking a listing on a recognised stock exchange in
London, targeted for late 2021.
-- Power Metal is also to invest CAD$50,000 (circa GBP28,764) to
acquire 9,588 additional First Class shares in First Class's
pre-IPO financing currently underway at GBP3 per share.
-- After the above Power Metal's holding in First Class will
amount to 342,922 shares or circa 39.9% based on currently issued
share capital of FCM.
-- Power Metal has the right but not the obligation up to IPO to
maintain its percentage holding in FCM at a minimum of 35.5%.
Whilst it is the intention of First Class to pursue a listing on
a recognised stock exchange in London targeted for late 2021, there
is no guarantee that the IPO of First Class will proceed, whether
it will be able to raise additional equity funding or at what price
it will issue new shares to potential investors.
James Knowles, Executive-director of First Class Metals Limited
commented:
"First Class Metals is delighted to have executed this agreement
with Power Metal Resources. The combination of our asset bases in
the Hemlo Schreiber Greenbelt Belt offers great synergies in
joining together two highly prospective exploration packages which
are located in one of the best mining postcodes globally.
Of particular interest is the combination of both companies
adjoining interests in North Hemlo into what we now see to be a
'district sized' exploration block. The North Hemlo project is in
close proximity to Palladium One (TSXV:PDM) ultra high grade
nickel/copper Tyko discovery on it's Eastern flank and Panther
Metals (LSE:PALM) in the West.
We look forward in the near term to the planned listing of First
Class Metals in London and advancing the enlarged package of land
this agreement brings together in a cohesive and strategic
manner.
Paul Johnson, Chief Executive Officer of Power Metal Resources
plc commented:
"Power Metal is pleased to confirm the sale of its
Schreiber-Hemlo interests into First Class which is currently
preparing for a listing in London in the near future.
First Class has itself assembled a strategic footprint of ground
in the Schreiber-Hemlo region and has already secured a joint
venture with Palladium One just to the north of Power Metal's Hemlo
North Project.
Bringing our Schreiber-Hemlo interests together with First Class
will create a larger more diverse exploration package and on
listing Power Metal will hold a strategic stake.
Given the geological prospectivity and burgeoning interest in
the Schreiber-Hemlo region, we feel that First Class, with its team
and their evident commitment, has the potential to perform well as
a listed vehicle in London.
We therefore look forward to First Class achieving its London
listing as soon as possible."
ABOUT FIRST CLASS METALS
First Class Metals Limited is a minerals exploration company
focused on proving & developing the significant potential of
the Pezim Blocks, Esa & Sugar Cube Gold/Base Metal Exploration
Projects in Ontario, Canada.
These projects totalling 579 mining cell claims are located
close to the Barrick Hemlo Gold Mine and adjacent to the Harte Gold
Sugar Zone, within the Western portion of the Wawa-Abitibi Gold
Belt of Ontario, Canada.
TRANSACTION TERMS
Properties
Power Metal Resources plc, through its 100% owned subsidiary
Power Metal Resources Canada Inc ("Power Canada") holds seven Hemlo
Schreiber properties as follows (the "Properties"):
- Hemlo North Gold Project (25.82 km2):
-- Roger Lake (50 claims)
-- Olga Lake (42 claims)
-- Dotted East (30 claims)
- McKellar Project (12.3km2)(58 claims)
- Coco-East Project (6.4km2)(30 claims)
- Enable Project (8.7km2)(41 claims)
- Magical Project (3km2)(14 claims)
The book value for the Properties as at the date of transaction
was GBP231,837.
Acquisition Terms
First Class will acquire a 100% interest in the Properties as
outlined above and the consideration for the acquisition will be
GBP1,000,002 to be satisfied through the issue of 333,334 First
Class Shares at GBP3.00 per share.
POW Participation in FCM Pre-IPO Financing
Power Metal is also subscribing for CAD$50,000 of First Class
shares in the pre-IPO financing round (circa GBP28,764 for 9,588
new ordinary First Class Shares).
POW Pre-emptive Rights
Power Metal have the right but not the obligation up to the IPO
to maintain its proportionate group shareholding at a minimum of
35.5% of FCM issued share capital on the same terms as any new FCM
shares are issued.
Additional Terms
Power Metal and Power Canada and their professional corporate,
licensing and geological teams will continue to work with First
Class to assist with claim transfer, the IPO process and ongoing
business support.
Power Metal may nominate a Non-executive Director to the board
of First Class.
First Class and their subsidiaries agree to adopt the existing
Net Smelter Return Royalty ("NSR") for all properties acquired from
Power Metal, which are held by a consortium led by established
local prospector Brian Fowler. Details of the NSR was announced on
21 January 2021 and 26 January 2021.
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) +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)
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 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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