TIDMPOW
RNS Number : 9744S
Power Metal Resources PLC
19 November 2021
19 November 2021
Power Metal Resources plc
("Power Metal" or the "Company")
Acquisition of Uranium & Rare-Earth Element Project -
Australia
Power Metal Acquires the Selta Uranium and Rare-Earth Element
Project, Located in the Northern Territory, Australia, through
Subsidiary First Development Resources Limited
Power Metal Resources plc (LON:POW), the London listed
exploration company seeking large-scale metal discoveries across
its global project portfolio, announces it has signed an Agreement
("Agreement") for the 100% acquisition (the "Acquisition") of the
Selta Project ("Selta" or the "Project"), located in the Northern
Territory, Australia.
A map showing the location of the Selta Project may be viewed
through the following link:
https://www.powermetalresources.com/selta-project-overview-map-2/
The Acquisition will be undertaken by Power Metal subsidiary,
First Development Resources Limited ("FDR"), in an all FDR share
transaction to acquire a 100% interest in URE Metals Pty Limited
("URE"), a private Australian company which wholly-owns the Selta
Project.
FDR is a special purpose company set up by Power Metal to act as
a vehicle for a planned listing on the London capital markets; with
a unique and high-impact portfolio of exploration interests.
FDR recently acquired outright First Development Resources
Australia Pty Limited ("FDR Australia") and its interests in the
Paterson Province of Western Australia. The announcement in respect
of the acquisition of FDR Australia is accessible through the
following link:
https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248
FDR is seeking to acquire additional strategic exploration
interests and the acquisition of the Selta Project announced today
is an important step in the completion of that process.
Note: No Power Metal shares will be issued for this transaction
with FDR utilising its own equity for the Acquisition.
HIGHLIGHTS
About the Selta Project
- The Selta Project, located in Australia's Northern Territory,
is considered to be highly-prospective for uranium ("U") and
rare-earth element ("REE") mineralisation. The Northern Territory
hosts some of Australia's best known and high-grade U and REE
deposits, including Arafura Resources' (ASX: ARU) world-class
Nolans Bore REE deposit - which is located less than 70km away from
the Selta Project. The State has a significant legacy of uranium
mining and exploration.
- The Project comprises three exploration licence applications
covering a total land area of 1,574.92km(2) , including EL 32737 -
780.85km(2) , EL 32738 - 312.17km(2) and EL 32755 - 481.90km(2)
.
- Previous surface sampling across the Selta Project has
identified elevated uranium results up to 3.8 parts per million
("ppm") U in soil samples, stream sediment samples up to 27.2ppm U
and rock chip samples up to 244ppm U.
- Assayed whole rock grab samples from the Selta Project have
yielded highly anomalous rare-earth element mineralisation
including 93ppm neodymium ("Nd") and 25ppm praseodymium ("Pr"), the
presence of which highlight the exciting exploration potential of
the Project. Encouraging historical results, combined with
underlying geological similarities between the Selta Project and
REE and uranium mineralisation at the nearby Nolans Bore deposit
have led to the investment decision to acquire the Project
outright.
- The Selta Project is also considered to be highly-prospective for base and precious-metal mineralisastion. Prodigy Gold's (ASX: PRX) Reynolds Range gold-copper project shares a 65km long contiguous border with Selta. Reynolds Range has recently delivered highly-encouraging drilling results, including 3.93g/t Au over 17m from borehole BRC100002(3) , which is located less than 8km from the Reynolds Range's claim border shared with the Selta Project.
The Key Agreement Terms
- FDR will acquire a 100% interest in URE for initial
consideration of up to AUD$25,000 (GBP13,465) cash payable by
31/12/2021 to cover historic expenses and GBP100,000 payable
through the issue of 1,499,250 FDR shares of one pence each in FDR
at a price of 6.67 pence each ("FDR Shares") (post share issue
3.85% of FDR issued share capital).
- Additional consideration will be due as each of the three
licence applications are granted, with an additional amount payable
of GBP400,000 should all licences be granted, again payable through
the issue of up to
5,997,001 FDR Shares.
- Should the total consideration of GBP513,465 be payable,
7,496,251 FDR Shares will be issued comprising 16.67% of FDR issued
share capital. At that point, and subject to any further
acquisitive transactions or events changing the share capital
structure, Power Metal will hold the balancing 83.33% of FDR issued
share capital.
- Detailed Agreement terms outlined below.
Next Steps
- FDR is planning to list on the London capital markets in Q1 2022.
- FDR is in late stage discussions to further expand its project
portfolio in preparation for listing, including additional
precious, base and strategic-metal opportunities.
- FDR is undertaking exploration work on its existing interests
in the Paterson Province of Western Australia, and will now
commence preparatory exploration work on the Selta Project in the
Northern Territory in preparation for licence grants.
Paul Johnson Chief Executive Officer of Power Metal Resources
plc commented:
"This latest acquisition further builds the First Development
Resources portfolio which now includes four distinct project
interests. This dynamic portfolio includes the Wallal Project
located in the prolific Paterson Province of Western Australia,
with exciting magnetic bullseye gold-copper drill targets - and now
the Selta Project, located in the Northern Territory, within a
region highly prospective for U and REE mineralisation, evidenced
by the nearby Nolans Bore deposit held by Arafura Resources.
We are seeking a listing of FDR on the London capital markets,
and this latest acquisition is an important piece of the FDR
portfolio which is being finalised in advance of that proposed
listing. We intend to create a unique vehicle with a number of
high-impact interests in top-tier mining jurisdictions, which on
listing, will launch into multiple active exploration programmes
where the results of such exploration may be transformational for
shareholders.
Alongside the portfolio developments, we are working with some
intensity on preparatory exploration, most significantly at the
Wallal Project, where 2D seismic geophysics reprocessing and
passive seismic results are awaited.
Further announcements in respect of ongoing exploration and the
FDR portfolio build are expected in the near future."
ACQUISITION TERMS
FDR UK will acquire the entire share capital of URE Metals Pty
Limited and all URE's interests from current URE shareholders.
Capital Restructuring FDR
Prior to the transaction, Power Metal has a 100% interest in FDR
which currently has a single issued share owned by Power Metal.
A capital restructuring of FDR is to be undertaken to increase
its authorised share capital in preparation for the listing process
(the "Capital Restructuring"). After this capital restructuring,
Power Metal's holding in FDR will be 37,481,259 FDR Shares. At this
point the loans provided by Power Metal to acquire the interests of
FDR UK will be written off into the Capital Restructuring.
Initial Consideration
For the immediate outright acquisition of a 100% interest in URE
and all its interests FDR will pay consideration of up to
AUD$25,000 cash (GBP13,465) payable by 31/12/2021 and GBP100,000
payable through the issue of 1,499,250 FDR Shares after completion
of the Capital Restructuring equating to 3.85% of FDR ("Initial
Consideration").
Additional Consideration
Additional consideration will be due as each of the three
licence applications comprising the Selta Project are granted, with
additional consideration of GBP400,000 should all licences be
granted, again payable through the
issue of up to 5,997,001 FDR shares after completion of the Capital Restructuring ("Additional Consideration").
This Additional Consideration is payable on licence grants as
follows:
L icence Application Application Application Consideration FDR Shares
Number Size (Blocks) Size (Km(2) Payable (GBP) Issued as
) Payment
EL 32737 250 780.85 198,321 2,973,328
--------------- ------------- --------------- -----------
EL 32738 100 312.17 79,285 1,188,681
--------------- ------------- --------------- -----------
EL 32755 155 481.90 122,394 1,834,992
--------------- ------------- --------------- -----------
Total 505 1,574.92 400,000 5,997,001
--------------- ------------- --------------- -----------
Should the Initial Consideration and all Additional
Consideration of GBP513,465 be payable, 7,496,251 FDR Shares will
be issued comprising 16.67% of FDR issued share capital. At that
point, and subject to any further acquisitive transactions or
events changing the share capital structure, Power Metal will hold
the balancing 83.33% of FDR issued share capital.
Royalty
The Shareholders of URE will retain a 2% net smelter return
royalty ("NSR") over all licences included in this transaction and
FDR will have the right to purchase 1% of this NSR for
A$1,000,000.
Note: For the period 1 July to 21 October 2021 URE had a loss
from ordinary activities of AU$2,918 and as at 21 October 2021 had
net liabilities of AU$9,745.
SELTA PROJECT - BACKGROUND
The Selta Project, considered to be prospective for uranium and
rare-earth elements, is located in Australia's Northern Territory
within the prospective but largely under-explored central Aileron
Province, between the Georgia and Ngalia Basins, in a region the
Northern Territory Government has declared prospective for uranium
mineralisation.
The Project comprises three exploration licence applications
covering a total land area of 1,574.92 km(2) including EL 32737 -
780.85km(2) , EL 32738 - 312.17 km(2) and EL 32755 - 481.90 km(2)
.
The Northern Territory hosts some of Australia's best known and
high-grade uranium deposits and has a long history of uranium
mining. In addition, the Aileron Province is a major exploration
target for base metals including nickel ("Ni") and copper ("Cu"),
REE and orogenic gold ("Au") with numerous companies actively
exploring within the region.
The Selta Project borders Prodigy Gold NL (ASX:PRX), IGO Ltd
(ASX:IGO) and Canadian listed Megawatt Lithium and Battery Metals
Corp (CSE:MEGA); and is less than 70km northwest of Arafura
Resources (ASX:ARU) high-grade, world-class Nolans Bore REE
deposit.
The Nolans Bore rare-earth elements-phosphate-uranium-thorium
deposit is one of the largest deposits of its kind in the world
with a JORC (2012) compliant Mineral Resource of 56 million tonnes
at an average grade of 2.6% total rare-earth oxides and 11%
phosphate (P(2) O(5) ). Commercial production is targeted for late
2024, with the Feasibility Study considering a 4,440 tonne per
annum NdPr oxide producing open pit mining operation with a 38 year
mine-life and an NPV(8%) of US$1.011B.(1)
The Selta Project's southern claim boundary abuts the Megawatt
landholding. Promising surface samples collected within the
Megawatt property coupled with a known radiometric trend which
links Megawatt with Arafura's ground to the south-east, are
indicators of uranium mineralisation. The Selta Project area is
currently located along strike to the NW of that radiometric trend
and future work will seek to extend that trend within the
property.
The underlying geology within the Selta Project is interpreted
to be comparable to the Nolans Bore deposit with REE and U
mineralisation at Nolans Bore being hosted within G6 granites which
are compositionally similar to the G5 granite prevalent across the
Selta Project.
Notably, within 5km of the Selta Project's eastern boundary are
three REE occurrences up to 543ppm Nd and 148ppm Pr hosted within
the G5 granite. Selta's exploration potential has been enhanced by
encouraging historical surface sampling results of up to 3.8ppm U
in soil samples, 27.2ppm U in stream sediment samples and up to
244ppm U in rock chip samples, all of which led to a study by The
Australian Mineral Development Laboratories(2) stating:
"...the amount of uranium moved by solution or erosion is large
enough for there to be several potentially economic orebodies."
In addition to uranium the Selta project has significant
exploration potential for Cu, Au and silver (Ag).
Prodigy Gold's Reynold Range Gold Copper Project, which
intersects the Selta Project's lease area, has delivered
encouraging results across four prospects for Cu, Au and Ag with
reverse circulation drilling intercepts yielding 29m @ 2.32g/t Au
(Falchion Prospect) and 17m @ 3.93g/t Au (Sabre Prospect) and
surface samples of up to 7.5g/t Au, 783g/t Ag and 19.3% Cu
(Scimitar Prospect) and 0.55g/t Au, 271g/t Ag and 20.3% Cu at the
Reward Prospect.(3)
NEXT STEPS
FDR will work with the Vendors to secure grant of the three
licence applications comprising the Selta Project. The exploration
work outlined below will be undertaken as appropriate, before or
after granting of licences.
FDR will commence a review of all historic drilling and
geophysics reports and where necessary reprocess the data to
improve resolution in anticipation of initiating a targeted high
resolution electromagnetic survey along with an airborne gamma-ray
spectrometry survey.
The newly acquired geophysics combined with the validated
historical data will enable the Company to identify priority
targets for mineralisation that can potentially be
drill-tested.
References:
(1) Arafura Resources Limited Annual Geneeral Meeting
Presentaion, 21/10/2021 . Available at:
https://wcsecure.weblink.com.au/pdf/ARU/02438942.pdf
(2) The Australia Mineral Development Laboratories (CR 74/19)
Sixth Progress Report MP 4976/73 Geochemical Survey, Arunta Area
Amdel (December 1973)
(3) PRX ASX Release - 20 May 2021. Available at:
https://wcsecure.weblink.com.au/pdf/PRX/02376469.pdf
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been
read and approved by Mr Nick O'Reilly (MSc, DIC, MIMMM, 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.
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 - 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.
Power Metal Exploration Programmes Underway/Results Awaited
Power Metal has exploration programmes completed or underway,
with results awaited, as outlined below:
Project Location POW % Work Completed Results Awaited
or Underway
Athabasca Canada 100% Phase I field exploration Laboratory assay
Uranium completed results of samples
collected for uranium
and REEs
---------- --------- -------------------------- -----------------------
Authier North Canada Earn-in Soil & rock sampling Laboratory assay
Lithium to 100% completed results of samples
collected
---------- --------- -------------------------- -----------------------
Silver Peak Canada 30% Following drill Overlimit analysis
programme demonstrating results
bonanza grade silver,
overlimit testing
being undertaken
where sample grade
exceeded previous
assay method detection
limits
---------- --------- -------------------------- -----------------------
Ditau Project Botswana 50% Preparatory exploration Field programme
work underway on findings and defined
target I10 leading drill targets for
to planned accelerated near term drilling.
drilling targeting
rare-earth elements
and base metals
---------- --------- -------------------------- -----------------------
Kalahari Copper Botswana 50% Exploration programme Field programme
Belt underway across findings and defined
the South Ghanzi drill targets for
Project and further near term drilling
exploration at
the more recently
acquired South
Ghanzi Extension
and Mamuno licence
areas
---------- --------- -------------------------- -----------------------
Tati Gold/Nickel Botswana 100% Reverse circulation Laboratory assay
drill programme results awaited
completed
---------- --------- -------------------------- -----------------------
Victoria Goldfields Australia 49.9% Ongoing exploration Results from field
across 848km(2) programme including
of granted exploration drill targets for
licences near term drilling
---------- --------- -------------------------- -----------------------
Wallal Gold/Copper Australia 83.33% Passive seismic Results awaited
Project and 2D seismic
processing work
programme completed
---------- --------- -------------------------- -----------------------
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