19th June 2024
Power Metal Resources
PLC
("Power Metal" or the
"Company")
Tati Gold Project, Botswana - Commercial
Update
Power Metal Enters Into Share Option
Agreement For Advancement of Tati Gold Project
Power Metal Resources PLC
(AIM:POW, OTCQB:POWMF),
the London listed exploration company with a global project
portfolio, announces a commercial update from its
100% owned Tati Gold Project ("Tati" or the "Project") located on
the Tati Greenstone Belt ("TGB") near Francistown,
Botswana.
A share option agreement ("Option" or the
"Agreement") has been entered between Power Metal, Tati Greenstone
Resources PTY LTD ("TGR") a company incorporated in Botswana held
as a 100% owned subsidiary of Power Metal, and Tuscan Holding PTY
LTD ("Tuscan") a company incorporated in Botswana (collectively the
"Parties").
Subject to exercise of the Option, Power Metal,
through TGR, will retain a 25% interest free carried to production
in Prospecting Licence 049/2022 (which covers the Cherished Hope
Mine) and from which it is intended that TGR will become a material
dividend paying entity from net cash flow generated from gold
production. Power Metal will retain the right to a 100%
interest in other prospecting licences held by TGR other than
PL049/2022. Further details are provided below.
Sean Wade, Chief Executive Officer of
Power Metal Resources plc, commented:
"I am
delighted to announce this exciting Agreement for Power Metal
shareholders. Tati is a very important Project for us and it is
great to be able to take it forward with a partner which is able to
make such a substantial financial investment, giving Power
shareholders a significant share of the upside without the
additional cost.
This further
validates our successful business model and we look forward eagerly
to the progress that we are confident this Agreement will
create."
Share Option
Agreement Terms
·
Tuscan is granted under the Option a 730 day period to
undertake prospecting, exploration and evaluation work
(collectively the "Work") over Prospecting Licence ("PL") 049/2022
(the "Licence") which covers the historical Cherished Hope Mine
("Cherished Hope").
·
Costs associated with the Work will be borne by Tuscan and
may include but is not limited to:
o Fly drone
lidar/photogrammetry.
o Handheld lidar
of the excavations in order to create a 3D model of the current
underground working if access and safety permit.
o Sink a shaft
to an approximate depth of 60m.
o Drilling with
the goal of establishing a mineral resource suitable for a
Feasibility Study.
·
Furthermore during the 730 day Option period should Tuscan
determine that the mineralised gold asset contained within the
Licence merits commercial exploitation it shall draft a Feasibility
Study at its own expense (the "Study).
·
Following the completion of the Study, and subject to Tuscan
being fully responsible to finance the construction and completion
of a processing plant and associated mine infrastructure required
to produce gold within the Licence, Tuscan may exercise the Option
to subscribe for 75% of the shares of TGR.
·
For clarity the Agreement relates to PL049/2022 only.
The two other licences held by Power Metal at Tati (PL126/2019 and
PL127/2019) are excluded. If these or any other licences are
held within TGR during the time period when Tuscan exercises the
Option, Power Metal reserves the right to transfer those licences
to another subsidiary company held 100% by Power Metal.
·
Following the exercise of the Option, the shareholders of
TGR, namely Power Metal and Tuscan, will be bound by a
Shareholders' Agreement.
Shareholders'
Agreement Terms
· A
board will be put in place which is determined by the pro-rata
ownership of TGR at the time after the Option exercise.
·
The Parties envisage that TGR shall be self-financed from its
own cash flow from gold mining operations. In the event TGR
requires additional finance to meet its working capital
requirements, it shall in the first instance seek loan facilities
from its bankers or other third parties on normal commercial terms,
and following that will be funded pro-rata based on the ownership
of TGR namely 75% Tuscan 25% Power Metal.
·
The intention is for TGR to become a dividend generating
company to be paid to the shareholders on a pro-rata basis from
surplus cashflow from the gold mine.
About
Tuscan
Tuscan Resources is a special purpose vehicle
held by Medici Mining Investment LLC registered in Delaware, United
States. The privately funded company has made numerous investments
in Africa, and began exploring in Zimbabwe in Southern Africa in
late 2022, with an acquisition of the operational Lonestar Mine in
April of 2023, where efforts are underway to improve processing,
grade control and production. The geology of the Cherished Hope
mine is very similar being an Archean quartz vein hosted gold
deposit, which are responsible for many similar small to medium
scale opportunities in the Greenstone Belts of Southern Africa. It
is Medici Mining Investment's intention to become the leader in the
sector at identifying these opportunities and establishing
appropriate and efficient production rapidly to reduce exploration
risks and generate fast returns for its
investor community.
Tati Project -
Background
The 16.12 km2 Licence was acquired
by Tati Greenstone Resources via staking on April 24 2022. The
Licence was originally required because it covered the historical
Cherished Hope gold mine. Since the pegging of the ground, Power
Metal has conducted multiple exploration programmes covering
reverse circulation ("RC") drilling, sampling of fines dumps,
trenching and soil sampling1,2,3,4,5,6,7.
Most notably along strike drilling of the
northwest-southeast trending quartz reefs associated with the
historical Cherished Hope gold mine returned bonanza grade gold
including up to 3m @ 16.77g/t from 5m depth (incl. 1m @47.17g/t Au)
in RC hole CHRC0003 as well as 2m @ 23.17g/t Au from 25m depth in
RC hole CHRC0006 (incl. 1m @ 40.63g/t Au). This drilling programme
highlights the prospectivity of the Cherished Hope historical mine
area and potential for potential future economic gold extraction
and will be the main focal point of Tuscan's exploration and
development endeavours under the Option going forward.
Next
Steps
With the Agreement now signed, Tuscan is
expected to be on site shortly commencing various workstreams and
various updates will be provided to the market throughout the term
of the Option.
References
1https://www.londonstockexchange.com/news-article/POW/tati-gold-project-botswana-exploration-update/15612993
2https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-initial-drill-assay-results/15699862
3https://www.londonstockexchange.com/news-article/POW/tati-project-botswana-final-drill-assay-results/15703794
4https://www.londonstockexchange.com/news-article/POW/tati-gold-project-botswana-exploration-update/15977383
5https://www.londonstockexchange.com/news-article/POW/tati-gold-two-significant-anomalies-identified/16125488
6https://www.londonstockexchange.com/news-article/POW/tati-gold-project-gold-anomaly-exploration/16154738
7https://www.londonstockexchange.com/news-article/POW/tati-project-sampling-confirms-extensive-gold/16319189
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
|
|
Sean Wade (Chief Executive
Officer)
|
+44 (0) 20 3778 1396
|
|
|
SP Angel Corporate Finance LLP
(Nomad and Joint Broker)
|
|
Ewan Leggat/Caroline Rowe
|
+44 (0) 20 3470 0470
|
|
|
Tamesis Partners LLP (Joint
Broker)
|
|
Richard Greenfield/Charlie Bendon
|
+44 (0) 20 3882 2868
|
|
|
BlytheRay (PR Advisors)
Tim Blythe/Megan Ray
|
+44 (0) 20 7138 3204
|
NOTES TO EDITORS
Power Metal Resources plc -
Background
Power Metal Resources
plc (AIM:POW, OTCQB:POWMF) is a London-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, Saudi Arabia 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.