Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the signing of an agreement in respect of the Alamo project in Arizona, USA.
Paul Johnson, Chief Executive Officer of Power Metal Resources plc, commented: “POW is making great progress in Africa across its power metal projects, and shareholders should expect further updates in the near term covering operational and corporate activities.
As a Company we have remained open to the review of new additional opportunities and stated we may move ahead with compelling projects, including new jurisdictions outside Africa and in new commodities.
We have conducted a comprehensive review of opportunities that will complement the Company’s mandate of securing interests that offer considerable upside potential through the implementation of disciplined programmes of exploration.
The Alamo Project provides access to a package of claims with notable native gold nugget finds at surface, and a geological backdrop that encourages us to search for the source of the Nuggets in the bedrock where, it is postulated, the potential for a large gold system exists.
The Project has a rich story and one in which we are excited to have the opportunity to play a part. We will provide further information to market as we proceed through the site visit and due diligence processes in the near term.
The Project opportunity appears compelling in itself and will be made more so with Joe Carrabba and Murray Nye working alongside us in an advisory capacity and adding to our confidence.”
The Company issued an announcement on 20 August 2019 entitled “Completion of the Company’s Strategic and Operational Review”, which may be viewed through the following link:
In that update POW stated its key strategic objective as being to make large scale metal discoveries in Africa in the power metal commodities, principally nickel, copper and cobalt. POW also stated it would be open to the acquisition of interests outside Africa, including in commodities less central to the power metal story, should project opportunities prove compelling. The Company has now identified a potentially compelling opportunity, focused on gold in the USA.
THE ALAMO PROJECT
The Alamo Project is located in west-central Arizona, USA and represents a package of mining claims covering an area of approximately 340 acres, focused on the core area of identified gold mineralisation. The Project was originally identified as prospective for gold following the discovery of native gold nuggets near surface in numerous locations within the Project boundaries.
The native gold nuggets at the Project occur in shallow arroyos (a steep-sided gully formed by the action of fast-flowing water in an arid or semi-arid region) and on hill-side occurrences. The arroyos are generally shallow depressions with sediment fill of up to one metre.
We understand that circa 60 ounces of gold Nuggets have already been found on the project area, by prospectors using metal detectors, with the largest Nugget weighing in at 5 ounces.
Nuggets have been obtained from the arroyo sediments by metal detecting and by small-scale dry washer mining methods. The composition of the nuggets is of particular geological interest in that both smooth/rounded and crystalline nuggets have been recovered, which suggests some difference in the distance of travel from their bedrock source (rounded nuggets having typically travelled some distance whereas the source of crystalline nuggets would be more proximal) pointing to potential scale and further prospectivity.
There is much debate in geological literature regarding nugget formation and there is work to undertake on the ground in Arizona to build the technical understanding of the Project including nugget identification, distribution and investigation of the bedrock source.
Some of this initial work will be undertaken during the due diligence period of 45 days (as described below) and some will naturally take a longer period of investigation should the Company decide to exercise the right to earn-in to the Alamo Project.
VENDORS AND FORMATION OF SPECIAL ADVISORY COMMITTEE
The right to earnin to the Alamo Project is held by the Vendors.
Subject to successful completion of project due diligence and POW exercising the right to earn in to 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.
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.
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.
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.
ADMISSION AND TOTAL VOTING RIGHTS
Application will be made for the admission to trading of the Due Diligence Shares which is expected to occur on or around 10 December 2019 (“Admission”). Following Admission of the Due Diligence Shares, POW’s ordinary issued share capital will comprise 377,690,226 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.
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.
3 December 2019