Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce an update from its Australian gold joint venture (“JV”) company Red Rock Australasia Pty Ltd (“RRAL”) in which POW has a 49.9% interest.
Update on Licence Applications:
RRAL’s applications are shown on the tenement map for Victoria and are being processed by Earth Resources Victoria. The process of grant has several stages, and the increase in application activity and the Covid-19 virus have caused delays and a backlog. Although the Company understands that measures are being implemented to ensure that processes are carried out as far as possible on a normal timetable, it is likely that some at least of RRAL’s applications will not proceed to grant for some time.
RRAL expects that it will be able to prioritise the grant of certain key application areas, but its planning including planning for a possible listing does not rely on assumptions about the timeframes for grant.
RRAL’s licence applications cover areas with different targets and target types. Although these may be described as RRAL’s strategic footprint in the Victoria Goldfields region, the ten licences covering up to 1,835 sq km in one of the most sought after gold exploration territories are not expected to be granted and explored on the same timeframe, and the assumption is that the sequential grant of these licenses will create an exploration pipeline.
It is considered unlikely that RRAL will lodge any further applications for additional licences at this time, as each of the ten tenements applied for contains valid exploration targets.
However, RRAL is currently considering potential corporate transactions to acquire granted licences where immediate ground exploration is possible, which would complement the application portfolio.
Historical Exploration Database and Exploration Planning:
RRAL is working with geological advisors based in the Victoria Goldfields area who are undertaking a detailed review of historical exploration, previous recorded production and known deposits across all ten licence application areas.
The information gathered is being collated into a geological database to provide the basis for additional target generation and detailed exploration planning.
Compliant Technical Report:
RRAL expects to commission the production of a technical report meeting the requirements for public release and covering the Victoria land package, its prospectivity for gold mineralisation and forward exploration strategies.
Strategic Project Development:
RRAL has various strategic options for corporate and operational development of its Victoria Goldfields interests. The baseline route would be to secure licence grants and for RRAL to explore and develop each licence internally with its own work programme.
Other options include RRAL securing external joint venture partners and as the licence applications cover several target types and areas it would be possible to take separate approaches with individual exploration licenses.
Prior to any strategic decisions being taken it is important to maximise our understanding of each licence and its prospectivity to enable the correct approach to be taken for each and if relevant to enable RRAL to structure suitable corporate transactions. As a result early completion of the historical exploration database is very important.
It is however recognised that alongside internal exploration and development by RRAL, involvement of third parties could enhance project level financing and so support an accelerated timetable for activity on the ground as licence applications are granted and exploration approvals obtained.
One further option being considered by RRAL is a possible initial public offering (“IPO”) for RRAL on a North American stock exchange for some, or all, of the project footprint. RRAL is in discussions with potential advisors in this regard.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“The pace at which the Victoria Goldfields JV is progressing is somewhat dramatic. Whilst we have been working in the background on this opportunity for some time, the increasing interest in the Victoria Goldfields region in Q1 2020 necessitated an expediting of effort. The work undertaken and that expedited effort has seen the JV secure applications for one of the largest strategic land packages in the region.
As such, it is advisable for us to consider all options for its future development as expeditiously as possible.
We will continue to update the market in respect of the licence application process, the building of the historical exploration database, exploration planning and strategic project development, as material developments occur.”
RRAL is a joint venture company 49.9% owned by POW and 50.1% by Red Rock Resources plc (LON:RRR). Paul Johnson, CEO of POW and Andrew Bell, Chairman of RRR and POW, are directors of RRAL.
RRAL has lodged applications for ten new gold exploration license areas covering 1,835 sq km in the Victoria Goldfields of Australia as follows:
|License Application Number||Project Name||Area (sq km)|
Readers wishing to view the current application footprint may do so through the following link to the POW website: https://www.powermetalresources.com/p/207/rrraustralasia-gold-project-footprint
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.
24 June 2020