Audited Results for the Year Ended 30 September 2020
Power Metal Resources plc (LON:POW), the AIM listed mineral resources exploration and development company, is pleased to announce its consolidated audited results for the year ended 30 September 2020 for the Company and its subsidiaries, Cobalt Blue Holdings (“CBH”), Regent Resources Interests Corp. (“RRIC”), and Power Metal Resources SA, (“PMR”), (together the “Group”).
Highlights from the year under review:
- A strategic Australian gold joint venture was formed with Red Rock Resources plc (LON:RRR), with Power Metal Resources holding 49.9%. By year end the joint venture holding company, Red Rock Resources Australasia (Pty) Limited (“RRAL”) had lodged 12 licence applications covering some 2,188 km² in the Victoria goldfields region. Various technical work was completed in the year including project reports for 11 of the licence applications and a National Instrument 43-101 report for 8 of the licence applications as a group. A new office was secured in Ballarat town and an exploration manager appointed to the joint venture company;
- Following completion of ground geophysics in 2019 and the delineation of key drill targets, Power Metal Resources elected on 31 December 2019 to earn in to a 40% project holding at the Molopo Farms Complex Project, Botswana by expending US$500,000 on exploration, notably key target drilling in 2020. A maiden drill programme commenced in October 2020;
- A new strategic joint venture was formed between Power Metal Resources and Kavango Resources Plc (LON:KAV) in respect of the Kalahari Copper Belt and Ditau Camp Projects in Botswana, with each party having a 50% interest;
- Review work was undertaken in respect of the exploration and commercialisation options in respect of the Cobalt Blue nickel/cobalt project in Cameroon. No formal conclusions as to the way forward were reached in the financial year, with deliberations continuing post year end and leading to a decision to impair the value of the of the Cameroon project in full (£970,000);
- A new earn in agreement was formed over the Silver Peak Project, including a former working silver mine, in British Columbia, Canada. Due diligence programme sampling demonstrated bonanza grade silver from channel sampling;
- A pitting, sampling and mapping work programme was undertaken successfully at the Kisinka Project in The Democratic Republic of the Congo. X-ray fluorescence testing of the samples confirmed the presence of copper, with samples dispatched to South Africa for analysis and results received post year end. The results announced in November 2020 demonstrated high grade copper and cobalt values;
- Power Metal Resources increased its interest in the Haneti Nickel Project by 10% to 35% in the financial year and worked with joint venture partner AIM Listed Katoro Gold plc (LON:KAT) to plan for commencement of maiden drilling for nickel sulphide and Platinum Group Metals (“PGMs”) at the Project;
- An agreement was signed in respect of the Alamo Gold Project in Arizona USA which saw Power Metal Resources acquire an option to earn in to a maximum 75% interest in the project. An initial reconnaissance survey conducted following the acquisition identified additional prospective areas which were pegged and added to existing claims, increasing the project footprint;
- A further strengthening of the Board saw Edmund Shaw, an experienced City finance professional, join the Board as Non-executive Director in February 2020;
- At the year-end 30 September 2020 the Company held a private and listed shares/warrants portfolio worth circa £1,481,000, including a £415,000 fair value uplift in the valuation of the portfolio of listed investments in other junior natural resource companies held by the Company over the course of the year;
- At the year end the Company held cash in GBP, USD, AUD and CAD of £913,000 in GBP equivalent.
- Loss for the year to 30 September 2020 of £1.4 million (2019: £1.6 million);
- Pre non-controlling interest total equity of £3.6 million at the year-end (2019: £1.8 million); and
- Raised £1.7 million (before issue costs) in new equity financing during the financial year, from a combination of new and existing shareholders, including the Directors, and an additional £266,000 of cash received by the Company during the year from exercises of Power Metal share warrants.
- Expansion of exploration and activity across the Company’s project portfolio including:
- Drilling programme commencement at the Molopo Farms Complex Project in Botswana (announced 15 October 2020), the Silver Peak Project in Canada (announced 10 November 2020) and the Haneti Nickel Project in Tanzania (announced 30 December 2020);
- Next stage exploration programmes commenced at the Kalahari Copper Belt and Ditau Projects in Botswana, the Alamo Gold Project in Arizona, USA and the Kisinka Project in The Democratic Republic of the Congo (“DRC”);
- Continuation of corporate activities since the year end with participation in a rights issue for Kalahari Key Mineral Exploration (Pty) Limited and expansion of the Australian Gold Joint Venture with an application to increase the JV footprint by a further 148 km2 surrounding the Ballarat mine area; and
- Option agreement signed in January 2021 providing 60 business-days for due diligence which if successful would lead to the acquisition of First Development Resources Pty Limited, a private Australian company with copper-gold exploration interests in Paterson Province, Australia.
- Agreement signed by Power Metal Resources in January 2021 to acquire a package of gold exploration properties in Ontario Canada, followed by an option agreement providing 30 days for due diligence which if successful would lead to the acquisition of four additional exploration projects also in Ontario, Canada. In February 2021, the Company announced it had exercised the Option to acquire the McKellar Property by transferring total consideration of CAD$100,000 in cash and shares;
- In February 2021 RRAL received confirmation that three licence applications had been granted enabling the commencement of ground exploration in the Victoria Goldfields, Australia;
- In February 2021, the Company announced, subject to shareholder approval, a capital reduction to take place in order for distributions to be made to shareholders; and
- Warrant exercises since the year end have raised a further £2,638,470 for the Company.
Paul Johnson, Chief Executive Officer of Power Metal Resources commented:
“The audited results for the year ended 30 September 2020 demonstrate the pace of business development at Power Metal.
In the previous financial year the Company emerged from the refinancing in February 2019 with a new sense of energy and a promise to deliver an exciting investment proposition in resource exploration and development. As at today’s date Power Metal is a global exploration company with precious and base metal projects across three continents.
Much of the development achieved in the Company was undertaken in the year ended 30 September 2020 and since then we have seen the launch of proactive exploration and corporate activities across multiple projects including district scale opportunities.
Power Metal is well funded with a strong working capital position and an objective to continue to build our “balance sheet” working capital to move the Company toward financial self sustainability.
We believe that 2021 and the coming years presents a great opportunity for junior resource opportunities and where possible we intend to take full advantage.”
Notice of Annual General Meeting and Distribution of Accounts to Shareholders
The Company's Annual General Meeting will take place at 11.00 am on 30 March 2021 at Abbey House, 282 Farnborough Road, Farnborough, Hampshire, GU14 7NA. The Company's Annual Report and Accounts for the year ended 30 September 2020 will be posted to shareholders this week. Copies of the Notice of AGM and the Annual Report and Accounts will also be available on the Company's website at www.powermetalresources.com in due course.
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