Power Metal Resources (LON:POW | FRA: 2M5) on Thursday revealed it has signed an agreement to acquire two new exploration properties, building an exciting group of interests in Nevada.
The firm is acquiring 100% of the Garfield copper-gold and Stonewall gold projects outright from Sunrise Resources (LON:SRES).
Garfield is around 10km east of Hawthorne, a town in Nevada’s Mineral County. The project is located in a “prolific” mineral belt, Walker Lane, hosting several “world-class” deposits. Initial rock sampling returned results of up to 6% copper and 3.5 grams per ton (“g/t”) gold and 124g/t silver.
One 26m trench at Garfield in 2016 returned a 22m 0.33% copper interval, including 2m sub-interval grading of 2.18% copper and a separate 2m sub-interval grading 1.2g/t gold. That trench is still open along strike, having ended in mineralisation, with no follow-up work since then,
Power Metal is planning a phase 1 work programme at Garfield, including a “systematic soil geochemical survey” across the property to test mineralisation continuity between historic sampling. After that will come a trenching programme. The 2016 trench will re-open and will be extended.
Stonewall, meanwhile, is about 15km to the south of the town of Goldfield in Nye County. Like Garfield, Stonewall is also situated in the Walker Lake belt. Not only that, but the project is under 60km from Tonopah’s silver deposits, which produced more than 138 million ounces of silver from 1900 to 1921.
The project is centered on a milky-white quartz vein, around 1.2km in length and open along strike. Rock sampling at Stonewall returned anomalous gold-silver values, with up to 1.17g/t gold and 161g/t silver.
Sampling there also found elevated mercury, “characteristic of the shallow parts of a low-sulphidation epithermal system”. Other evidence for a sizeable buried system include quartz vein widths, the mapped strike length, and “well-developed boiling textures found at surface”.
To this end, Power Metal plans to conduct a diamond drilling programme at Stonewall, testing both the eastern extent and the broader system at depth.
A new Nevada limited liability company will own the properties. It will be the local operating company for Power Metal’s wholly-owned Golden Metal Resources private UK subsidiary.
Chief executive Paul Johnson said the buy increases the company’s metals exposure in Nevada, complementing the Golconda Summit gold property option announced on June 1.
Golden Metal, as Johnson put it, “now has a trio of gold - silver - copper exploration projects, targeting major metal discoveries in Nevada USA”.
The transaction’s terms include payment of £20,000 cash and £61,875 in shares to the vendors, with a price per share of 2.75p. Power Metal will also issue 2.25 million warrants to Sunrise with a 3.75p exercise price, with a two-year life to expiry.
If Power Metal’s share price meets or exceeds 10p for five trading days, then the firm can give notice to exercise and pay for warrants or else they will be cancelled.
In addition, the vendors retain a 2% net smelter return royalty over both properties, though Golden Metal can at any time repurchase 1% of the net smelter return royalty for each project for $1 million.
Johnson said the company is set to shortly launch its Nevada ground exploration, “initially targeting near surface significant gold mineralisation at the Golconda Summit gold property”. After that, Power Metal will move onto initial mineral work programmes at Garfield and Stonewall.
“Further updates to the market in this regard are expected in the near term,” Johnson concluded.
Author: Anna Farley
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