Power Metal executes agreement over exciting Nevada gold property (POW, 2M5)

Power Metal Resources (LON:POW | FRA: 2M5) announced Tuesday it has executed an agreement and can now earn a100% interest in central Nevada’s Golconda Summit Gold Property.

Golconda Summit is an early-stage exploration project comprising 44 Bureau of Land Management Lode Claims. The project is ideally located only 15 kilometres east of the town of Winnemucca.

Additionally, Golconda Summit is approximately 35 km southwest from the open-pit and underground mines of the Turquoise Ridge Complex, a joint venture between Barrick Gold (NYSE: GOLD) and Newmont (NYSE: NEM). These mines have compliant resources of 130 million tonnes at 4.30 grams per ton (“g/t”) of gold, including total reserves of 83 million tons at 5.02g/t gold.

Other nearby mines include Nevada Gold’s Phoenix Operation Lone Tree open pit, which reportedly produced 4.2 million ounces of gold at 2.06g/t until its 2006 closure, and SSR Mining’s Marigold open-pit project, which has a current total compliant resource of 5.11 million ounces. On top of that, the gold mineralisation on the Golconda Summit Property is found within the same host rocks of these nearby gold deposits.

Encouraging for Power Metal, historical work on the Property has already identified “significant gold mineralisation”. Trenching in 1989 returned extremely impressive assay results of 7.6 metres at 24.0 g/t gold and 15.2 metres at 8.6g/t gold.

Power Metal chief executive Paul Johnson described Golconda Summit as “an exciting Carlin-type gold project”. Carlin-type gold deposits contain so-called ‘invisible gold’ – which is fine-grained gold hosted in sedimentary rocks that eluded early prospectors.

The firstCarlin deposit was found in Nevada in 1961. These deposits can be huge and are often able to be mined using open-pit methods instead of more expensive underground mining.

Golconda is well situated, as Johnson noted, “in the highly gold endowed Great Basin district at the confluence of the prolific Battle Mountain-Eureka and Getchell gold trends”.

In addition to the impressive historic results, and proximity to other successful multi-million-ounce projects, the Property also benefits from Nevada’s favourable jurisdiction and great nearby mining infrastructure. The project is also large, spanning 10,000 acres.

The assignment and assumption agreement on Golconda Summit gives Golden Metal, a wholly-owned Power Metal subsidiary, an option to earn in to 100% of the US project.

The deal was signed by Golden Metal and GR Silver Mining. The agreement signing fee will be satisfied through a $60,000 cash payment to GR Silver using Power Metal’s existing cash resources.

GR Silver has had an option agreement with private Nevada-based firm Eureka Resources Conversion for 100% of Golconda Summit since August 2017. This is the underlying option agreement, which Golden Metal assumes unchanged.

GR Silver has already paid $10,000 on the execution of the underlying option, along with two $15,000 payments due on or before the second and third anniversaries of the effective date. Still to come are $20,000 due on or before the fourth anniversary, $25,000 due on or before the fifth anniversary, and another $50,000 due and payable on or before the sixth, seventh, eighth, ninth, and tenth anniversaries.

Once the earn-in is complete, Eureka will be granted a 1% net smelter return royalty. This can be brought back for $1 million within a year after the production of any materials from the property begins.

“I look forward to updating the market with further information on the Property in the coming weeks,” Johnson concluded.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, does not own a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Power Metal’s new incubator business establishes yet another path to success (POW)

Power Metal Resources (LON: POW | FRA:2M5) unveiled its brand new ‘incubator’ business on Monday, aiming to support small find ventures in the junior resource space. This could well bring even more value and compelling projects down the line.

The subsidiary is named Power Capital Investments and is to be fully funded, initially, by Power Metal. This incubator business will actively seek out “small, entrepreneurial business ventures” with major growth potential.

Power Capital will then support these junior resource businesses. This includes through business management, as well as corporate and project development. The goal of this is to help such businesses “scale rapidly and realise their potential”.

Alongside all of this, the incubator business may offer financial support. The subsidiary will develop these ventures until they are sold, publicly listed, or incorporated within the firm’s own portfolio. Though, this does depend on “key performance indicators” that will be established later.

Power Capital, and therefore Power Metal, will be a major shareholder in the ventures it develops. This means the company could see “significant capital appreciation” as a result of successful ventures.

Not only that, but the firm will also then have a new resource project pipeline for potential operational development.

The company described Power Capital as “the next step” in its plans for “a strong, diversified and successful company” and creating significant shareholder value.

Chief executive Paul Johnson highlighted the plethora of opportunities around the world that have “huge potential for discovery” but cannot always get off the ground as a result of funding restrictions and insufficient managerial resources for corporate development.

Johnson explained that Power Metal will choose “only the very best of these opportunities” to nurture “in exchange for equity”.

This is a natural extension of Power Metal’s dual model approach, in which the firm not only develops projects for internal development but also with the goal of spinning out some projects into their own vehicles, typically to be listed.

The company then hands over responsibility for these projects, receiving shares and warrants in exchange. These can then be sold for additional working capital and mean that the company does not need to engage in continuous fundraising.

An example of this would be the company’s Australian gold joint venture with Red Rock Resources (LON: RRR). Power Metal has a 49/9% stake in the joint venture, named Red Rock Australasia, with plans underway to list core Red Rock Australasia assets via a Canadian IPO.

As with these spin-offs, the incubator business is another way to bring in additional working capital without the need to fundraise.

Shares in Power Metal were up 3% on Tuesday morning in recognition of the incubator business’ potential. On a one-year basis, the firm’s shares are up close to 700%.

“It is expected that over time, Power Capital will further strengthen Power Metal’s portfolio of projects and create further value for our shareholders, as successful ventures are either incorporated into our portfolio, sold, or listed publicly,”  Johnson concluded.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Time to take note of Power Metal’s innovative spin-off strategy (POW)

Power Metal Resources’ (LSE:POW | FRA:2M5) business model may have been overlooked before, but now is the time to sit up and take notice of its impressive potential.

Speaking last week, chief executive Paul Johnson walked Mining Maven through the firm’s “dual model approach”, which involves using spin-offs to help fund other projects and increase working capital.

Right now, Power Metal has nine projects in its portfolio, with plans to spin out some and develop others internally.

In a glowing research note, First Equity analyst Jason Robertson recently gave the firm a buy rating, highlighting that there was “enough quality of prospective projects and assets within the group to form the basis for at least five or six separately listed companies”.

This echoes Johnson’s comment that, when looking at Power Metal, “you're effectively buying five or six exploration companies in one wrapper”.

Johnson explained that the firm’s approach, which involves handing over project responsibility in exchange for shares and warrants, is “designed to generate its own working capital”. Power Metal can then sell shares in spin-offs in order to bring in more funds for the projects it develops internally.

And Power Metal has some seriously high-calibre projects in its war chest.

For example, it has a 49.9% stake in a JV, known as Red Rock Australasia, which is focused on Australia’s sought-after Victoria goldfields. Gold projects in Victoria are attracting sizeable interest at the moment after the “remarkable discoveries” made at depth in the state’s Fosterville mine. The JV partners plan to list core Red Rock Australasia assets through a Canadian IPO.

Elsewhere, Power Metal has also earned a 35% interest in the Haneti project in Tanzania. This is prospective for nickel, platinum-group-elements (“PGE”), cobalt, copper, gold, and lithium, and drilling is already underway.

Meanwhile, another powerful asset for the firm is the Molopo Farms Complex (“MFC”) project in southwest Botswana, where it is targeting nickel, copper, and PGEs. Power Metal has secured a 40% direct interest in the MFC project by spending $500,000. It also holds an 18% stake in the company that owns the MFC, Kalahari Key Mineral Exploration. Combined, these give Power Metal a 50.8% effective economic interest in the project.

Johnson explained that, when it comes to choosing projects, Power Metal focuses on “great diversification across commodities, jurisdictions and types of geology”. Spreading operations across North America, Africa, Australia, offers “inherent protection against geopolitical risk, operation risk, and financing risk,” he added.

Johnson also stressed the importance of “large-scale” projects, with the scale being Power Metal’s “predominant focus” when it comes to new project acquisitions. That can be from a corporation or an exploration perspective.

The chief executive has also made a unique vow not to conduct heavily discounted financing, a commitment that is made possible thanks to funds from spin-offs.

“Yes, we’re on a public market and we can raise money if required, but I’ve given a commitment that we will not do heavily discounted financing,” Johnson promised.

The company’s share price is down 15% year-to-date, but up more than an incredible 850% on a one-year basis at 2.49p.

This only adds to Power Metal’s appeal, as the current dip is likely to be temporary given the company’s strong and diverse project interests.

Moreover, Johnson’s pledge on financing gives shares an edge in the small-cap mining space, where heavily discounted placings are par for the course.

He pointed out that investors are often frustrated when they buy a share at 3p on the market, only for a company to turn around the next day and announce a 2p financing. Thanks to its dual-model approach, Power Metal avoids this and helps shares keep hold of their value.

When factoring in this aspect, as well as potential upsides from its projects, it’s hard to argue that Power Metal’s £28.5 million market cap is an accurate reflection of value.

Not only does Power Metal have gold investments at a time of high prices and strong safe-haven demand, but it also has investments in battery metals like nickel, cobalt, and lithium during a worldwide electrification boom. In the US alone, the Biden administration is rolling out a $174 billion plan to drive electric vehicle adoption and development.

On top of that, the company is focusing on scale, meaning that newer projects are likely to get bigger and more impressive over time. This can only spur Power Metal on to greater heights.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Power Metal unveils plan for deep diamond drilling at Haneti project (POW)

Power Metal Resources (LON:POW) revealed Wednesday that, on the back of a maiden rotary air blast drill programme at Haneti, the project will move to the next step of deep diamond drilling.

The company has 35% ownership interest in Haneti, a platinum group metals (“PGM”) project in Tanzania, while Katoro Gold (LON:KAT) holds the other 65%.

The now complete 1,965 metre, 50-hole, shallow rotary air blast (“RAB”) programme took place at the Mihanza Hill and Mwaka Hill targets. Results have now been received from SGS Laboratories.

On the basis of this, Power Metal and Katoro have opted for a maiden diamond drilling programme testing for nickel and PGM sulphide mineralisation at depth. This, too, will take place at the Mihanza Hill and Mwaka Hill targets.

Nickel is used in lithium-ion batteries, with demand set to grow along with the electronic vehicle (“EV”) market. It is also used to make stainless steel. PGMs could also end up in the EV space, while the PGM outlook overall is one of limited supply amid growing demand.

The goal of the RAB drilling was to determine the extent of “ultramafic intrusive geology” found beneath the “nickel enriched laterite and regolith cover” for two transects of around 1 kilometre in length at the targets. The transects are orientated across time-domain electromagnetic ("TDEM") geophysics anomalies already identified.

Because the shallow RAB drilling took place on deeply weathered rocks, it was not able to delineate “fresh un-altered rock or primary nickel sulphide mineralisation” but did assist in further constraining the target area for diamond drilling.

Notably, the surface mapping that took place at the time found “small scale nickel-copper-magnetite gossanous veins” located within a new Mihanza Hill outcrop. According to the geological team, this is evidence of potential primary nickel rich sulphide mineralisation in the underlying ultramafic body.

The diamond drilling is intended to reach a depth of 400 metres, at minimum, so as to intersect the TDEM and magnetic geophysics anomalies as well as testing for primary sulphide mineralisation. This drilling will also be used to gather fresh unaltered rock samples to be analysed.

As chief executive Paul Johnson explained, the additional geological information from the shallow drilling, as well as the “discovery of new gossanous nickel-copper-magnetite veining at Mihanza Hill”, made a clear case for deep diamond drilling at Haneti.

Johnson noted that this drilling will help determine the possibility of “economic nickel sulphide mineralisation” at the project.

Power Metal said more details of the programme, including a start date, will follow soon.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Power Metal seizes Silver Peak stake as project interest booms (POW)

Power Metal Resources (LON: POW) has accelerated its earn-in for Silver Peak and agreed a stock exchange listing for the promising Canadian asset.

The metals exploration and development firm took the opportunity to snap up the rest of its optioned stake in the project after witnessing exciting levels of third-party interest in quality silver projects, and now holds a 30% position.

Alongside its partners, who hold the other 70% interest, Power Metals has agreed to list Silver Peak “on a recognised stock exchange”. The process for this has started already, with paperwork prepared.

Power Metal paid the remaining $108,952 of its $250,000 earn-in commitments, fullfilling the earn-in requirement using existing cash resources. The firm also chose to issue 5.1 million of new shares at 2.225p each, worth $200,000, to satisfy the final earn-in payment. Power Metal has also issued 2.6 million warrants with a 2.89p exercise price.

Chief executive Paul Johnson said: “Alongside its extensive exploration activities Power Metal is intent on generating material organic value from corporate work in respect of its portfolio of interests. In just seven months since we engaged with Silver Peak we are now, with our partners, planning to move this project interest into its own independent listing.

“The level of interest in quality silver projects is considerable and we believe that material value can be generated for Power Metal through the listing of Silver Peak.”

Silver Peak’s potential

Silver Peak is made up of a portfolio of mineral claims over a system of high-grade veins, part of the historical Eureka-Victoria silver mine in British Colombia.

In late December last year, Power Metal reported results from a November drilling campaign at Silver Peak. Despite challenging weather conditions, which curtailed the programme, drilling still “delineated very high-grade silver” including 5,270 grams per ton (“g/t”) or 169.5 troy ounces per tonne (“oz/t”) of silver in the Victoria vein.

This was around 150 metres deeper than the summer due diligence programme, which found “exceptionally high-grade channel sampling intersections” of up to 14,937 g/t or 480 troy oz/t silver.

Given the soaring price of silver, far ahead of its pre-pandemic price, Power Metal’s decision to secure its stake in Silver Peak is more than justified.

In January 2020, silver was trading at $18.04 per ounce. After dipping to only $12.27 per ounce in March 2020, silver quickly began its ascent and now stands at $26.08 per ounce – an incredible 45% jump from the January price.

No wonder, then, that silver project interest is on the rise.

Other IPOs on the horizon

Silver Peak is not Power Metals’ only upcoming project IPO to look forward to. The Kanye Resources strategic joint venture with Kavango Resources and Australia gold joint venture with Red Rock Resources are also planning IPOs. These spell great opportunities ahead for Power Metals.

“We believe that these proposed IPOs could accelerate the crystallisation of value from the company's projects into 2021, providing an earlier recognition of project value,” Johnson said.

Author: Anna Farley

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.

MiningMaven Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.

MiningMaven.com and MiningMaven Ltd are not responsible for the article's content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance