The discovery of a vast seam of copper at the Kinsinka mine in the Democratic Republic of Congo has produced a welcome bump for Power Metal Resources (LSE:POW).
The AIM-listed explorer has been concentrating recent efforts on expanding its gold prospects at Alamo in Arizona, so developments at its 70%-owned copper and cobalt mine have flown under the radar somewhat.
But chief executive Paul Johnson told the market on Wednesday morning that his company was now commissioning Congolese experts Minex Consulting to carry out detailed mapping of 24 pits across nine cross sections of the 6.8 kilometre target area where a large copper anomaly was discovered. Kisinka is located in the southern part of the Katangan copper belt, home to some of the world’s largest and highest-grade copper and cobalt deposits.
Shares in the £2.3 million market cap firm were 6% higher at 0.4p in early Wednesday trading. Meanwhile, technical analysis of the share price shows it as a buy on the daily and weekly charts, as it sits above both the short-term 5-day EMA of 0.373p and medium-term 50-day EMA of 0.362p.
The news backs up statements chief executive Paul Johnson made in June 2019 that “the potential significance of this large anomalous zone makes this a high-priority prospect for the company”. Initial exploration started in 2018 had failed to pick up any significant signs of mineralisation.
When Johnson took over as executive chairman in August 2019, the Kisinka project was the first work the company looked at in an effort to rationalise its portfolio. “Our expectations were not high, and we were surprised and encouraged by the discovery,” he noted.
He was also brought in, along with executive chairman Andrew Bell, to boost POW’s technical capability at board level.
Johnson added that the next planned work at Kinsinka would be to use the rest of the rainy season to carry out less weather-dependent work in sampling and mapping, while preparing for potential future drilling.
While the spot price of copper dipped in the second half of January, the metal is still trading near five-year highs at $2.59 per lb.
Author: Tom Rodgers
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