TIDMPOW
RNS Number : 3961Z
Power Metal Resources PLC
24 January 2022
24 January 2022
Power Metal Resources PLC
("Power Metal" or the "Company")
Transaction Update - Pilot Mountain Project
Transaction Complete and Power Metal Agrees Terms for the Early
Clearance of the Tail Benefit Held by Thor Mining on the Pilot
Mountain Project, Nevada, USA
Power Metal Resources PLC (LON:POW) the London AIM listed
company which finances and manages global resource exploration
projects, announces a transaction update following the exercise of
the option (the "Option") on the Pilot Mountain Project ("Pilot
Mountain" or the "Project") located in Nevada, United States of
America ("USA") (the "Transaction").
The Company's announcement in respect of the Transaction of 1
November 2021 may be viewed through the following link:
https://www.londonstockexchange.com/news-article/POW/acquisition-of-pilot-mountain-project/15193667
Paul Johnson, Chief Executive Officer of Power Metal Resources
plc commented:
"I am pleased to confirm completion of the Pilot Mountain
transaction and the further signing of a Variation Agreement
enabling Power Metal to secure early clearance of the tail
benefit.
Our ongoing technical work in respect of the Pilot Mountain
project has increasingly demonstrated significant upside potential
within the existing 2018 Mineral Resource Estimate and we
considered there was a reasonable likelihood that the tail benefit
would become payable within the 2 year payment period.
The early clearance of the tail benefit also frees Power Metal
from any future contractual financial encumbrance in respect of the
Project.
The recent classification of tungsten as a critical mineral from
the United States Geological Survey, and the lack of primary
domestic tungsten production makes the Project in our view highly
strategic, both now, and potentially much more so in the future
with successful further exploration work which will be undertaken
by Golden Metal Resources."
HIGHLIGHTS
Transaction Completion
Power Metal subsidiary Golden Metal Resources Limited ("Golden
Metal UK") has established a new wholly owned subsidiary Golden
Metal Resources Australia Pty Limited ("Golden Metal Australia")
which has now completed the 100% acquisition of the Pilot Mountain
project.
Variation Agreement
The terms of the Transaction are outlined below, and included
the Tail Benefit of deferred consideration of US$500,000
(cGBP368,000) payable to Thor Mining plc (the "Vendor" or "Thor
Mining") in the event that Golden Metal UK publishes a JORC or
43-101 compliant resource at Pilot Mountain which increases against
current declared levels by 25% across total indicated and inferred
categories within two years after the Transaction agreement
date.
Power Metal has now agreed terms to secure the early clearance
of this Tail Benefit through the payment of GBP50,000 cash and
issue to Thor Mining of 4 million Power Metal new ordinary shares
of 0.1p each in the Company at an issue price of 2.5p per share
(GBP100,000) ("Variation Shares").
Power Metal and Thor Mining plc have signed a Variation
Agreement to effect the above. Following completion of the payments
due under the Variation Agreement, all amounts due or potentially
due under the Transaction have now been settled in full and no
further consideration is due.
Listing of Golden Metal
Golden Metal UK is making good progress with its proposed
listing process and a further update will be provided in the near
future.
TRANSACTION INFORMATION
Power Metal subsidiary Golden Metal Resources Limited ("Golden
Metal UK") has established a new wholly owned subsidiary Golden
Metal Resources Pty Limited ("Golden Metal Australia") which has
now completed the 100% acquisition of the Pilot Mountain
Project.
Power Metal has paid US$115,000 in cash consideration to Thor
Mining and US$1,650,000 of consideration through the issue to Thor
Mining of 48,118,920 new Ordinary Shares at an issue price of 2.5
pence per share ("Initial Consideration Shares").
Thor Mining will hold the Initial Consideration Shares in full
for a minimum of 6 months after the Option Exercise date and
thereafter the Initial Consideration Shares will become freely
tradable in 25% instalments (25% tradable 6 months after Option
Exercise date, 50% - 9 months after Option Exercise date, 75% - 12
months after Option Exercise date and 100% - 15 months after Option
Exercise date.) This trading restriction period may be varied with
the written agreement of both parties.
In addition, Power Metal have issued to Thor Mining 12.5 million
warrants to subscribe for Ordinary Shares with an exercise price of
4p per Ordinary Share and life to expiry of 3 years from the Option
Exercise date ("Initial Consideration Warrants"). Should the volume
weighted average price ("VWAP") of Power Metal shares meet or
exceed 10 (ten) pence for 5 consecutive trading days Power Metal
may serve notice on Thor Mining providing 14 calendar days to
exercise and pay for the Initial Consideration Warrants or the
Initial Consideration Warrants will be cancelled.
Should Thor Mining exercise the Initial Consideration Warrants
above within 12 months from the Option Exercise date, Thor Mining
will receive one for one replacement warrants to subscribe for
Ordinary Shares at a fixed price of 8p per Ordinary Share, and life
to expiry ending 3 years from the date of Option Exercise ("Super
Warrants"). Should the Power Metal volume weighted average share
price meet or exceed 20p for five consecutive trading days Power
Metal may at any time issue Thor Mining with a written notice
providing 14 days to exercise and pay for the Super Warrants or the
Super Warrant will be cancelled.
All Option Exercise Consideration items outlined above have now
been paid or issued in full.
Tail Benefit
Power Metal was to issue Thor Mining with a further US$500,000
of consideration in new Ordinary Shares if Golden Metal UK
publishes a JORC or 43-101 compliant resource at Pilot Mountain
which increases against current declared levels by 25% across total
indicated and inferred categories within two years after the
Agreement date. The number of Ordinary Shares to be issued was to
be calculated based on the volume weighted average Power Metal
share price in the ten trading days immediately preceding the
announcement by Golden Metal of the JORC or 43-101 compliant
increase.
With the Variation Agreement announced today, the above Tail
Benefit is now eliminated.
Additional Terms
Thor Mining and their professional corporate, licensing and
geological teams will continue to work with Power Metal and Golden
Metal to assist with Pilot Mountain ownership transfer and to
manage local corporate & exploration/development operations in
the 12 months following the Option Exercise date. Power Metal and
Golden Metal will pay for any assistance provided post Transaction
on reasonable commercial terms to be agreed.
PILOT MOUNTAIN OWNERSHIP STRUCTURE
Wholly owned(1) Power Metal subsidiary Golden Metal Resources UK
through its wholly owned subsidiary Golden Metal Resources
Australia Pty Ltd., now holds 100% of Black Fire Industrial
Minerals Pty Ltd., (Australian private company) which owns 100% of
Industrial Minerals (USA) Pty Ltd., (Australian private company)
which owns 100% of: BFM Resources Inc., and Pilot Metals Inc., (USA
private companies) which own tenements covering the entire Pilot
Mountain Project and the 2018 Mineral Resource Estimate.(2)
Further disclosures
As at the date of option announcement on 31.08.21 the following
disclosures were made:
As at 30 June 2020 BFM Resources Inc had Gross Assets of
AUD$21,449 (circa GBP11,317) and incurred no profit or loss
(AUD$Nil) for the year ended 30 June 2020.
As at 30 June 2020 Pilot Metals Inc had Gross Assets of
US$3,055,411 (circa GBP2,226,602) and a loss of US$106,164 (circa
GBP77,366) for the year ended 30 June 2020.
As at 30 June 2020 Black Fire Industrial Minerals Pty Ltd on a
consolidated basis had Gross Assets of AUD$5,181,951 (circa
GBP2,738,397) and a loss of AUD$154,690 (circa GBP81,746) for the
year ended 30 June 2020.
It is further noted that since the announcement of the Pilot
Mountain option, Thor Mining plc transferred the Pilot Mountain
project and all holding companies to "Held for Sale Assets" with a
written down value of GBP1,050,000 as at 30 June 2021 their
reported financial year end.
ADMISSION AND VOTING RIGHTS
Application will be made for the 4,000,000 Tail Benefit Shares
to be admitted to trading on AIM which is expected to occur on or
around 31 January 2022 ("Admission"). The Tail Benefit Shares will
rank pari passu in all respects with the Ordinary Shares of the
Company currently traded on AIM.
Following Admission, the Company's issued share capital will
comprise 1,448,339,986 ordinary shares of 0.1p each. This number
will represent the total voting rights in the Company and may be
used by shareholders as the denominator for the calculation by
which they can determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure and Transparency
Rules.
Reference Notes:
(1) As announced on 9.12.21 Golden Metal Resources Limited has
undertaken a pre-IPO financing raising GBP750,000. Following the
issue of shares in respect of this financing Power Metal will hold
83.13% of Golden Metal Resources Limited.
(2)
https://www.thormining.com/sites/thormining/media/pdf/asx-announcements/20182019/20181214-pilot-mountain-resource-update.pdf
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For further information please visit
https://www.powermetalresources.com/ or contact:
Power Metal Resources plc
Paul Johnson (Chief Executive Officer) +44 (0) 7766 465 617
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat +44 (0) 20 3470 0470
SI Capital Limited (Joint Broker)
Nick Emerson +44 (0) 1483 413 500
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson +44 (0) 20 7330 1883
NOTES TO EDITORS
Power Metal Resources plc (LON:POW) is an AIM listed metals
exploration company which finances and manages global resource
projects and is seeking large scale metal discoveries.
The Company has a principal focus on opportunities offering
district scale potential across a global portfolio including
precious, base and strategic metal exploration in North America,
Africa and Australia.
Project interests range from early-stage greenfield exploration
to later-stage prospects currently subject to drill programmes.
Power Metal will develop projects internally or through
strategic joint ventures until a project becomes ready for disposal
through outright sale or separate listing on a recognised stock
exchange thereby crystallising the value generated from our
internal exploration and development work.
Value generated through disposals will be deployed internally to
drive the Company's growth or may be returned to shareholders
through share buy backs, dividends or in-specie distributions of
assets.
Power Metal Exploration Programmes Underway/Results Awaited
Power Metal has exploration programmes completed or underway,
with results awaited, as outlined below:
Project Location POW % Work Completed Results Awaited
or Underway
Alamo Gold USA Earn-in Excavation of multiple Field and assay
Project to 75% test pits and mapping results from on-site
& sampling. work programme.
---------- ---------- ------------------------ ----------------------
Authier North Canada Earn-in Soil & rock sampling Interpretation
Lithium to 100% completed of laboratory assay
results of samples
collected.
---------- ---------- ------------------------ ----------------------
Ditau Project Botswana 50% Preparatory exploration Field programme
work underway on findings and defined
target I10 leading drill targets for
to planned accelerated near term drilling.
drilling targeting
rare-earth elements
and base metals
---------- ---------- ------------------------ ----------------------
Kalahari Copper Botswana 50% Exploration programme Field programme
Belt underway across findings and defined
the South Ghanzi drill targets for
Project and further near term drilling
exploration at
the more recently
acquired South
Ghanzi Extension
and Mamuno licence
areas
---------- ---------- ------------------------ ----------------------
Molopo Farms Botswana 53%(A) Kavango Option Results from various
to acquire an interest work activities
in local project underway as part
holding company. of the Kavango
Option fee payable Option
through defined
work programme
---------- ---------- ------------------------ ----------------------
Tati Gold/Nickel Botswana 100% Reverse circulation Laboratory assay
drill programme results awaited
completed
---------- ---------- ------------------------ ----------------------
H aneti Project Tanzania 35% Diamon drill programme Results from field
underway programme including
drill programme
underway
---------- ---------- ------------------------ ----------------------
Victoria Goldfields Australia 49.9% Ongoing exploration Results from field
across 848km(2) programme including
of granted exploration drill programme
licences underway
---------- ---------- ------------------------ ----------------------
Wallal Gold/Copper Australia 83.33%(B) Passive seismic Results awaited
Project and 2D seismic
processing work
programme completed.
Ground reconnaissance
work underway.
---------- ---------- ------------------------ ----------------------
(A) should Kavango exercise their option to acquire Kalahari
Key, Power Metal interest would reduce to 40% of the Molopo Farms
Complex project
(B) assuming all licences held by URE Metals Pty Limited are
granted as outlined in the Company's announcement of 19.11.21
resulting in the issue of First Development Resources Ltd shares to
URE vendors
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END
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