TIDMPOW
RNS Number : 3483A
Power Metal Resources PLC
22 September 2022
22 September 2022
Power Metal Resources PLC
("Power Metal" or the "Company")
Acquisition of Historic Berringa Gold Mine Complete - Victoria,
Australia
Power Metal Resources PLC (LON:POW), the London listed
exploration company seeking large-scale metal discoveries across
its global project portfolio announces an update in relation to its
joint venture ("JV") subsidiary New Ballarat Gold Corporation PLC
("NBGC"), which is focused on the prolific Victorian Goldfields of
Australia. The JV is held between Power Metal (49.9%) and its
partner, London-listed Red Rock Resources PLC (50.1%).
Red Rock Australasia Pty Ltd ("RRAL"), the 100% owned Australian
operating subsidiary of NBGC, entered an agreement ("Agreement") on
6 July 2022 to acquire the exploration licence EL5535 covering the
historic Berringa Mine ("Berringa" or the "Project") from Balmaine
Gold Pty Ltd ("Vendor") which is a wholly owned subsidiary of
Golden Point Group Pty Ltd ("GPG"), itself the subsidiary of Shen
Yao Holdings Ltd, a company listed on the Singapore Exchange (the
companies collectively being the "Vendor Group").
The original announcement in respect of the Agreement may be
viewed through the link below:
https://www.londonstockexchange.com/news-article/POW/acquisition-of-historic-berringa-gold-mine/15528927
A map highlighting the location of the Project may be seen on
the Company's website through the following link:
https://www.powermetalresources.com/berringa-map-2/
ACQUISITION COMPLETION
-- EL5535 has now been successfully transferred to RRAL, which
now holds a 100% interest in the exploration licence.
-- RRAL has paid the initial consideration of AUD$20,000 to the
Vendor, with further milestone consideration payments detailed in
the Further Information section below.
-- RRAL are finalising a detailed exploration plan for the
period up to and following the five year renewal being applied for
to the licence which expires on 16 November this year, which will
include planned drilling at EL5535. The exploration plan will be
based on abundant historical exploration data available, allowing
for highly refined drilling programme design.(1,2)
-- Planned drilling will test for extensions of known gold
mineralisation at the Berringa Gold Mine, which has historical
production of 293,250 ounces of gold (Au) from 1898-1952 at an
average grade of 8.3g/t Au.(1)
-- The focus of planned drilling is to demonstrate the remaining
gold endowment which as outlined in 2004 and 2014 technical
reports, includes possible exploration target ranges down to 1000m
of 0.91 to 3.89million(*,**) and 0.70 to 2.91million(*,**) ounces
of Au respectively.(1,2) Further details in respect of these
exploration targets are provided below.
-- RRAL is in ongoing discussions with the Vendor Group,
regarding the possibility of processing ore at their nearby
Ballarat Gold Mine (located approximately 25km away), should RRAL
discover and develop an economic deposit. This arrangement would
dramatically reduce both mine build-out time horizons and heavy
capital requirements for building a new standalone processing
facility.
Paul Johnson, Chief Executive Officer of Power Metal Resources
PLC commented:
"Investors often tell me of their excitement with regard to New
Ballarat Gold Corporation and the opportunity it represents. We
share that excitement as NBGC holds a significant land position in
the Victoria Goldfields of Australia, which across its footprint
has extensive evidence of gold prospectivity.
Centered in Ballarat we have an established operational team who
have been running the local operations diligently and building the
potential across the licence areas we hold. These licence areas
contain advanced opportunities, with a number of high-grade former
producing mines and also the wider blue-sky exploration potential
that offers the potential for significant valuation uplift on
discovery.
Power Metal is keen to see NBGC flourish, and today's news is an
important step forward."
FURTHER INFORMATION
Exploration Licence 5535 was previously held by Balmaine Gold
Pty Ltd, which is a wholly owned subsidiary of Golden Point Group
Pty Ltd ("GPG"), itself the subsidiary of Shen Yao Holdings Ltd, a
company listed on the Singapore Exchange (the companies
collectively being the "Vendor Group").
GPG are the owners of the nearby Ballarat Gold Mine, which has
annual production guidance of 40,000 to 50,000 ounces of gold per
year.(4)
The Vendor Group's licence has its origins in the acquisition of
the tenement area in 1998 with the view of the tenement, supplying
additional gold to the nearby Ballarat Mine. After passing through
Lihir Gold, the tenement came into the hands of the Vendor Group.
The mining licence was surrendered in 2014, with an exploration
licence covering the same area then being granted to the Vendor.
For various reasons, the work on the tenement has not been as
extensive as planned.
A 2004 Berringa Exploration Strategy Technical report was
produced by Hamish Forgan & Steven Olsen on behalf of a
previous owner of the Licence, Ballarat Goldfields NL ("Ballarat
Goldfields"). Mr Olsen was an employee of Ballarat Goldfields and a
compent person as defined by the JORC code. The 2004 report
highlighted a proposed exploration target ranging from 913,488 to
3,889,718 ounces of gold down to a depth of 1000m at
Berringa.(2)
Subsequently, on the surrender of the previous mining licence, a
further technical report was prepared which summarised the findings
from work undertaken from 1992 to October 2014. The 2015 report was
produced by Jason Fothergill on behalf of the operators at the
time, Caslemaine Goldfields Pty Ltd. Within the 2015 report, an
updated proposed exploration target was calculated and which ranged
from 697,112 to 2,907,790 ounces of gold down to a depth of
1000m.(1) The results from this report are summarised in the below
table.(*,**)
Depth Extent Theoretical Assumed Target Size Risk Weighted
tonnage Grade Exploration Target
0 - 300m 475 - 2,974k 5.8 - 14.2g/t 554k oz. Au 217k oz. Au
t Au
------------- -------------- ------------ --------------------
300 - 600m 494 - 5,793k 5.8 - 14.2g/t 1.080 Moz. 225k oz. Au
t Au Au
------------- -------------- ------------ --------------------
600 - 1,000m 558 - 6,827k 5.8 - 14.2g/t 1.273 Moz. 255k oz. Au
t Au Au
------------- -------------- ------------ --------------------
TOTAL 1.5 to 15.6 5.8 -14.2g/t 2.907 Moz. 0.697 Moz. Au
Mt Au Au
------------- -------------- ------------ --------------------
*The exploration targets tabled above are not to be considered
as an estimate of a Mineral Resource or Ore Reserve as those terms
are defined in the JORC (2012) Code. The potential quantity and
grade is conceptual in nature, that there has been insufficient
exploration to estimate a Mineral Resource It is uncertain if
further exploration will result in the subsequent estimation of any
Mineral Resource. A drilling programme planned to test the valididy
of the exploration target outlined above is currently being
planned, and details will be included in the licence renewal
application which will be submitted prior to the expiration date of
16 November 2022. Further updates regarding the proposed drilling
programme will be supplied to the market in due course.
**The top end of the exploration target ranges produced
represents the total ounce potential that would exist if each
target area (0-300m, 300-600m, 600-1000m) had the same gold
endowment as the historically mined orebodies at Berringa. Several
risk factors were applied to the above calculation, which take into
account the unknown location of various faults, folds and
diltational jogs down to 1000m. The low end of the exploration
target range reflects the full application of all calculated risk
factors to the top end estimate.
Transaction Terms
For the purchase of 100% of the Vendor's interest in the Licence
to RRAL, covering the historical Berringa Gold Mine, the following
consideration is payable:
-- The issue to the Vendor staged cash payments totalling AUD$500,000 as outlined below:
o Initial payment of AUD$20,000 payable on successful transfer
of the exploration licence to RRAL. This payment has now been
made.
o On successful renewal of the Licence for an additional term of
5 years, which currently expires on 16 November 2022, an additional
payment of AUD$130,000, which can be satisfied through the issue of
either cash and/or publically traded shares.
o On public release of a initial JORC Compliant resource
estimate of greater than 100,000 cumulative ounces of gold in the
Inferred category, a further payment of AUD$350,000, which can be
satisfied through the issue of either cash and/or publically traded
shares.
-- Upon the successful commencement of commercial production, a
1.5% Net Smelter Return ("NSR") royalty will be issued to the
Vendor over the Licence, with total payments capped at
AUD$1,500,000 over the life of the NSR royalty.
-- RRAL inherits the responsibility for a pre-existing 2.5% NSR
Royalty, with total payments capped at AUD$50m, payable to Altus
Strategies Plc. This royalty is part of a wider royalty covering
actual or potential gold production from a number of licences
including that from the Ballarat gold mine. Of the AUD$50m, to date
AUD$14.5m has been received by the royalty holder and therefore
AUD$35.5m of the capped amount remains.(5)
New Ballarat Gold Corporation
NBGC through its wholly owned local operating subsidiary RRAL,
holds a strong land position comprising 15 granted exploration
licences for a total area of 1,841km(2) within the gold fields of
Victoria, Australia, principally around the mining centre of
Ballarat.
5 licences covering 493km(2) await grant. The company has
carefully assembled its portfolio of properties comprising a broad
range from robust exploration targets to near term resource
potential, all of which remain largely undeveloped by modern
explorers.
With the first tenements granted only in 2021, RRAL has already
conducted detailed exploration of its initial targets, including a
diamond drill test of two prospects starting in December 2021.
References
(1) Final Technical Report Berringa Gold Project MIN 4191 Oct
2014. J Fothergill Balmaine Gold Pty Ltd
(2) Berringa Exploration Strategy Technical Report: Sept 2004, H
Forgan
(3) Sharp, D. & Sheerin K: OreTech Mining Solutions -
Tenement Review and Exploration Strategy - EL007330 Daylesford.
Unpublished independent geologist report prepared for Red Rock
Australasia Pty Ltd. (2020).
(4) https://ballaratgoldmine.com.au/our-mine/
(5) Royalty Overview Dashboard - Altus Strategies (
https://altus-strategies.com/projects/royalty-dashboard/caserones-2/
)
QUALIFIED PERSON STATEMENT
The technical information in this report is compiled by David
Holden, BSc, MBA, MEM, who is a member of the Australian Institute
of Geoscientists and a director of NBGC, and the Executive Officer
and Exploration Manager of RRAL. He is a member of a recognised
professional organisation and has sufficient relevant experience to
qualify as a qualified person as defined in the Guidance Note for
Mining, Oil and Gas Companies, published by AIM.
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.
Exploration Work Overview
Power Metal has internal exploration programmes completed or
underway, with results awaited, as outlined in the table below.
Project Location Current Work Completed or Results Awaited
POW Underway
%
Athabasca Canada 100% Ground exploration Results from ground
Uranium programme underway exploration including
at 3 properties. Continuing spectrometer analysis,
data analysis across sampling and mapping.
the property portfolio.
--------- --------- ----------------------------- --------------------------
Authier Canada Earn-in Property Evaluation Update covering
North to 100% Report completed. exploration plans
Lithium for target areas
identified during
the Evaluation.
--------- --------- ----------------------------- --------------------------
Molopo Botswana 53%(#) K1-6 conductor target Drill programme
Farms drilling underway updates and findings
and MLEM surveys over from MLEM surveys.
T1-6, T1-14, T1-3
and T2-3 targets completed.
--------- --------- ----------------------------- --------------------------
Tati Botswana 100% RC drilling and sampling Review of mine dumps
Project of mine dumps complete. sampling and results
from RC drill programme.
--------- --------- ----------------------------- --------------------------
(#) subject to completion of acquisition announced 18.5.22
interest will increase to 87.71%
Exploration work programmes may also be underway within Power
Metal investee companies and planned IPO vehicles where Power Metal
has a material interest, the findings from which will be released
on their respective websites, with simultaneous updates through
Power Metal regulatory announcements where required.
These interests are summarised in the table below:
Company Status/Operations Link
First Class Investment - www.firstclassmetalsplc.com
Metals PLC POW 28.19%
Exploration
in the Schreiber-Hemlo
region of Ontario,
Canada
------------------------ ------------------------------------------------------------------
First Development Planned IPO www.firstdevelopmentresources.com
Resources - POW 62.12%
PLC Exploration
in Western Australia
and the Northern
Territory of
Australia
------------------------ ------------------------------------------------------------------
Golden Planned IPO www.goldenmetalresources.com
Metal Resources - POW 83.13%
PLC Exploration
and development
in Nevada, USA
------------------------ ------------------------------------------------------------------
Kavango Investment - www.kavangoresources.com
Resources POW 14.03% (subject
PLC to completion
of Kanye Resources
disposal announced
8.7.22)
Exploration
in Botswana
------------------------ ------------------------------------------------------------------
New Ballarat Planned IPO A new website is currently in development
Gold PLC - POW 49.9% which will be found at www.newballaratgoldcorp.com
Exploration .
in the Victoria In the interim further information
Goldfields of in respect of NBGC can be found at:
Australia https://www.powermetalresources.com/project/victoria-goldfields/
.
------------------------ ------------------------------------------------------------------
Uranium Planned IPO www.uraniumenergyexploration.com
Energy Exploration - POW on listing
PLC estimated 40-55%
------------------------ ------------------------------------------------------------------
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