Power Metal Resources (LSE: POW) chief executive Paul Johnson has upped his stake in the firm to 7.12% by buying 1 million shares. It’s another endorsement for the AIM-listed metals explorer at a time when it is firing on all cylinders.
News flow has been flooding in throughout November 2020, with the company’s share price peaking at a fresh all time high. Power Metal shares surged to a two-year high of 1.43p in early September 2020, before climbing over 2p for the first time in two years in October.
Cash is also flowing into Power Metal’s bank account. As confidence grows in the multiple opportunities on offer, early investors have started to exercise warrants in greater numbers. Warrants exercised since mid-October alone have brought in over £429,000 for the company.
So, what are some of Power Metal’s most prospective projects?
The Haneti project in Tanzania is one of Power Metal’s largest avenue for future riches.
The firm has a 35%-owned joint venture here with fellow London-listed miner Katoro Gold (LSE: KAT). The main target is an 80km-long belt thought to contain a world-class nickel deposit, given the level of near-surface nickel sulphide mineralisation.
On 19 November, the JV announced it had signed a drill contract with Amazon Drilling for a 2,000m project — drilling 50 rotary air blast holes to a depth of 40m — across three target areas. Previous exploration work has identified surface sampling grades up to 13.6% nickel and 2.33g/t platinum and palladium.
Molopo Farms Complex
The Molopo Farms Complex (MFC) is a massive nickel sulphide and platinum group metals project in Botswana. It has the potential to transform Power Metal, given the multiple large-scale targets and data pointing towards a “district-scale” discovery.
Power Metal’s phase one drilling is planned for 2,505m across four diamond core drill holes, with target depths ranging from 525m to 710m. The company is using the same drill company which was instrumental in the discovery of the massive nearby T3 copper project now owned by mid-tier Australian explorer Sandfire Resources (ASX:SFR).
“We are increasingly excited by the MFC project and its potential for a company transformational discovery,” Johnson said this month.
Power Metal has a 40% earn-in on MFC for a fully-funded $500,000 exploration deal that includes diamond drilling selected targets. On completion of the earn-in, Power Metal will have an effective interest of 50.96% in the MFC thanks to its 18.26% shareholding in the project's 100% owner Kalahari Key.
Investors are salivating at the prospect of what could be a set of monster results from the MFC project.
The complex as a whole straddles the southern border of Botswana and South Africa, and lies within the same province as Bushveld, which contains the world’s largest reserves of PGMs.
Power Metal raised £700,000 in December 2019, with £400,000 specifically ringfenced to progress the Molopo Farms development. Johnson and his chairman Andrew Bell each subscribed for £25,000 in the 0.4p placing.
Just this week, Power Metal also reported an update on its bonanza grade silver project at Silver Peak in British Columbia. Channel sampling completed over summer 2020 revealed sections up to 14,937g/t silver alongside significant levels of copper and lead.
The project consists of a portfolio of mineral claims over a system of high grade polymetallic silver-lead-zinc-copper veins.
Engineers have completed a revised drill and sampling programme and rock chip samples from six diamond drill holes have now been delivered to the geochemical analysis laboratory run by ALS in North Vancouver for assay testing. Additional work on the structure of the vein system “has added to our geological understanding of the silver mineralisation,” Johnson told the market last week.
And despite stormy conditions and heavy snowfall in the Canadia region, managers pushed ahead to finish the work programme ahead of expectations.
Wider macro conditions are playing into Power Metal’s hands, Johnson said, with palpable demand for high grade silver projects in the market at the moment.
Silver prices remain elevated near seven-year highs. As of 26 November 2020 the spot price for the precious metal was $750/kg.
And then there is Power Metal’s massive gold project in Victoria, Australia.
In a 49.9% JV with Red Rock Resources (LSE: RRR) called RRAL, Power Metal is targeting huge potential high-grade quartz-hosted gold vein systems, applying modern techniques to under-explored areas in the historic Victoria Goldfields.
Power Metal updated the market on 6 November that RRAL had swooped to apply for an extra 148km2 license just days after it became available.
The new license is in a ring around the highly prospective Ballarat mine and covers ground surrounded on all sides by the existing 2236km2 of licenses RRAL has applied for.
Unprecedented global interest has now descended on Victoria, mainly driven by the success of the highest-grade gold mine in the world, Fosterville, run by $11bn market cap Canadian giant Kirkland Lake Gold (NYSE: KL).
Recent interpretations of structural data have provided explorers with new models to target both shallow and deep gold mineralisation, while An independent NI-43-101 report sampled the RRAL portfolio in September and discovered multiple “excellent targets for gold mineralisation” spread across 8 license areas.
Work continues at pace developing the Australia gold JV, said Johnson, with the main focus on technical planning for exploration and drilling programmes. RRAL will also appoint a dedicated CEO while the JV awaits license grants.
Power Metal also said that RRAL's license package has attracted approaches from private companies looking to acquire interests or secure an earn-ins or JV. Meanwhile, there are still plans underway to list some or all of RRAL on a North American stock exchange to capitalise on intense international investor interest.
Author: Mark Sheridan
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