TIDMPOW

RNS Number : 1524L

Power Metal Resources PLC

11 May 2022

11 May 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

First Development Resources Australia - Corporate Update

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces a corporate update for its 83.33% owned subsidiary First Development Resources Limited ("FDR UK").

ACQUISITION OF PARDOO RESOURCES PTY LIMITED

Background

Power Metal has signed an Agreement ("Agreement") for the 100% acquisition of Pardoo Resources Pty Limited ("Pardoo") by FDR UK.

Pardoo is an Australian resource exploration project holding company which currently holds projects in trust for First Development Resources Pty Limited ("FDR Australia"), a wholly owned Australian subsidiary of FDR UK.

The projects held in trust are in the Paterson Province of Western Australia (the Paterson "Interests" or "Projects") and include:

   -      Wallal West 1 Project (E45/5853) a granted exploration licence which covers 96km(2) ; 
   -      Wallal West 2 Project (E45/5880) a granted exploration licence covering 86km(2) and; 
   -      Braeside West Project (E45/5854) a granted exploration licence covering 137km(2) . 

FDR UK acquired a 100% interest in FDR Australia on 29 October 2021 and the announcement in respect of the acquisition may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248

The acquisition of Pardoo expedites the corporate restructuring of FDR UK, its subsidiaries & interests and allows FDR UK to avoid a costly and time-consuming inter-company transfer of strategically important exploration licences which are now within the FDR UK group holding company structure.

Pardoo Acquisition Terms

For the acquisition of the entire share capital of Pardoo by FDR UK, the consideration payable to the shareholders of Pardoo (the "Vendors") is as follows:

   -      FDR UK will pay consideration of AU$7,000 (GBP3,839) in cash 

- The Vendors will receive 300,000 new FDR UK Ordinary Shares at an issue price of 6.67 pence per share (a value of GBP20,010 and post share issue this represents 0.66% of FDR UK issued share capital).

The AU$7,000 cash payment is to cover costs associated with financial accounting to prepare Pardoo for this transaction and on completion of the acquisition Pardoo will carry no outstanding liabilities.

The Vendors and their professional licencing and geological teams will continue to provide ongoing assistance and work with FDR UK post completion of the acquisition.

Following completion of this transaction, Power Metal will hold 82.78% of FDR UK.

In the nine months ended 30 April 2022 Pardoo had a net loss of AU$96 and at 30 April 2022 Pardoo had net assets of AU$4.

EXERCISE OF RIPON HILLS OPTION

Background

The original acquisition of FDR Australia was announced on 29 October 2021 and this announcement may be viewed through the link below:

https://www.londonstockexchange.com/news-article/POW/power-metal-acquires-100-of-fdr-australia/15193248

Option Exercise Terms

Within the above announcement were the terms for an option (the "Option") to acquire the Ripon Hills Project ("Ripon Hills") and an extract covering this is provided below:

"Ripon Hills E45/5088 Option

FDR UK may, at any time within 12 months of the date of signing of this Agreement, acquire E45/5088 (Ripon Hills) with consideration comprising a payment of A$20,000 (to be paid as 398,036 Power Metal Ordinary Shares at an issue price of 2.75p and 398,036 Power Metal warrants at an exercise price of 4.5p and on the same basis as the Initial Consideration Warrants above) to Great Sandy Pty Limited ("Great Sandy"), current holder of the licence. Upon written notice of exercise and payment, Great Sandy will transfer E45/5088 to RH Resources Pty Ltd (which will become a wholly owned subsidiary of FDR Australia)."

Power Metal and FDR UK have now exercised the above Option and are working with Great Sandy to complete relevant transfer documentation. As a result Power Metal will issue Great Sandy 398,036 new ordinary shares of 0.1p each at a price of 2.75p ("Ripon Hills Option Shares") and 398,036 Power Metal Warrants at an exercise price of 4.5p.

The latest exploration update in respect of Ripon Hills may be reviewed in the Company's announcement of 21 February 2022, including details of a desktop review currently underway:

https://www.londonstockexchange.com/news-article/POW/replacement-paterson-project-exploration-update/15337136

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:

"It's great to be able to expedite the restructuring of the FDR UK interests and saves us some time and cost. This means we can move forward more expeditiously with this exciting venture. We continue the administrative processes for the planned listing of FDR UK on the UK capital markets."

Tristan Pottas Chief Executive Officer of First Development Resources Ltd commented:

"Progress at First Development Resources continues, including exploration work programmes and corporate activities in respect of the planned London listing of FDR UK. We intend to push on at pace.

From a corporate perspective, the acquisition of Pardoo announced today enables us to further accelerate our business plans which is important. Also, our work to date has demonstrated the potential opportunity offered by Ripon Hills and we are delighted that the Option has been exercised."

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 398,036 Ripon Hills Option Shares to be admitted to trading on AIM which is expected to occur on or around 18 May 2022 ("Admission"). The Ripon Hills Option 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 1,469,667,740 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.

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 - Background

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            Field and assay results 
  Project                        to      multiple test            from on-site work programme. 
                                75%      pits and mapping 
                                         & sampling. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Athabasca         Canada      100%     Data compilation         Interpretation results 
  Uranium                                across uranium           from all Properties complete. 
                                         properties               Next steps upcoming. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Authier           Canada     Earn-in   Soil & rock sampling     Technical Review of exploration 
  North Lithium                  to      completed                results & define next 
                                100%                              exploration steps. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Ditau Project    Botswana      50%     Drill programme          Field updates and receipt 
                                         focused on key           & review of laboratory 
                                         targets notably          assay results. 
                                         drilling of potential 
                                         carbonatites and 
                                         targeting rare-earth 
                                         elements. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Kalahari         Botswana      50%     Exploration programme    Field programme findings 
  Copper Belt                            underway across          and defined drill targets 
                                         the South Ghanzi         for near term drilling. 
                                         Project and further 
                                         exploration at 
                                         the more recently 
                                         acquired South 
                                         Ghanzi Extension 
                                         and Mamuno licence 
                                         areas 
                 ----------  --------  -----------------------  ---------------------------------- 
 Molopo Farms     Botswana      53%     Review of recent         Determine next exploration 
                                         exploration findings.    steps and action plan. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Haneti Project   Tanzania      35%     Diamond drill            Receipt & review of laboratory 
                                         programme completed      assay results. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Victoria         Australia    49.9%    Diamond drill            Field updates and receipt 
  Goldfields                             programme underway       & review of laboratory 
                                                                  assay results. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Paterson         Australia   83.33%    Wallal passive           Findings from multiple 
  Projects                               seismic and 2D           work programmes including 
                                         seismic processing       final approvals and preparations 
                                         work programme           for planned deep diamond 
                                         completed.               drilling. 
                                         Review of historical 
                                         data and target 
                                         generation for 
                                         Ripon Hills & 
                                         Braeside West 
                                         projects. 
                 ----------  --------  -----------------------  ---------------------------------- 
 Selta Project    Australia   83.33%    Field reconnaissance     Finalising data review 
                                         work complete,           from field programmes. 
                                         which included 
                                         mapping and sampling. 
                 ----------  --------  -----------------------  ---------------------------------- 
 

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END

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May 11, 2022 10:02 ET (14:02 GMT)

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