Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce the Company has signed an option agreement (the “Agreement”) to acquire a 100% interest in four separate gold exploration properties located in the prospective Hemlo and Schreiber area of Ontario, Canada (the “Option Properties”).
The four Option Properties are located within 100km west or southwest of the Company’s new Hemlo North Gold Project (consisting the Dotted East, Olga Lake and Roger Lake 100% owned properties), the acquisition of which was announced on 21 January 2021.
A map showing the Option Properties and the Company’s recently acquired Hemlo North Gold Project may be viewed on the Company’s website through the following link:
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:
“Taken together with our recently acquired Hemlo North Gold Project in the highly prospective Hemlo area of Ontario, Canada, the Option Properties would give Power Metal a significant footprint in the Hemlo/Schreiber district, with ground tenure close to existing mines or other local properties subject to active exploration.
We have moved quickly to secure these interests but given the assessment work involved across four individual properties, we have also secured a 30-day option period to enable due diligence work to be undertaken carefully on the Option Properties (the “Option Period”).
Shareholders will see with our recent actions that we are building a significant portfolio of precious metal interests in North America and that is something we intend to continue should the right opportunities continue to remain available to the Company.”
THE OPTION PROPERTIES:
McKellar consists of a total of 58 Mining Claims (“Claims”) (consisting of 49 Single Cell Mining Claims and 9 Boundary Cell Mining Claims) covering a total area of circa 12.3km2. The Claims are valid through to between 7 June 2021 to 26 April 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the McKellar Claims will require an aggregate work spend of CAD$23,600 of which CAD$15,200 has already been applied. Therefore, an additional net aggregate work spend of CAD$8,400 (circa £4,838) is required prior to the individual Claim renewal dates.
Underlain by prospective metavolcanic and metasedimentary rock packages, the regional magnetic geophysics shows a possible fold hinge structural setting. The underexplored property is considered prospective for both volcanogenic massive sulphide (“VMS”) copper-lead-zinc mineralisation and orogenic gold deposits. Historical sampling undertaken by Noranda Exploration in 1989 at the historical (1875) Little Pick Silver Mine reported a channel sample of 1.4m @ 13.0% Zn, 7.1% Pb & 678.0 g/t Ag and a trench sample of 1.1m @ 32.3% Zn, 1.1% Pb & 68.4 g/t Ag, with the VMS style mineralisation reportedly being traced over a 600m strike.
Enable consists of a total of 41 Single Cell Mining Claims covering a total area of circa 8.7km2. The Claims are valid through to 25 July 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Enable Claims will require an aggregate work spend of CAD$16,400 (circa £9,446) prior to the Claims renewal date.
The underexplored Enable property is underlain by gold prospective, greenstone belt, metavolcanic geology and is located on and in proximity to the Terrace Bay batholith contact, which is associated with over 30 known gold occurrences in the wider area.
Magical consists of a total of 14 Single Cell Mining Claims covering a total area of circa 3km2. The Claims are valid through to 27 July 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Magical Claims will require an aggregate work spend of CAD$5,600 (circa £3,226) prior to the Claims renewal date.
The regional geophysics data shows a possible target related to the intersection of a granitoid intrusion with a regional scale magnetic geophysics lineation. The property is largely unexplored apart from the easternmost Claim cell where, in 1995, Hemlo Gold Mines Inc drilled an induced polarisation (“IP”) geophysics anomaly. Diamond drill hole V95-2 reportedly intersected a 7m zone of silicification containing sericite and sulphides and 12.6m of feldspar porphyry with disseminated pyrite.
Coco East consists of a total of 30 Single Cell Mining Claims covering a total area of circa 6.4km2. The Claims are valid through to 20 August 2022 upon which they can be renewed on an annual basis. To meet the requirements for renewal the Coco East Claims will require an aggregate work spend of CAD$12,000 (circa £6,912) prior to the Claims renewal date.
The Coco East property is considered prospective for both mesothermal lode gold and VMS deposits.
It is located on the eastern end of the 4km long Big Duck Lake porphyry intrusion which is associated with 20 gold or gold and base metal occurrences. Almost all of the known gold showings occur along the contact of, or within 1 km of, the outer margin of the main porphyry body.
Coco East is located 8km due east of the Superior Lake Resources Ltd. (ASX:SUP) Superior Lake Zinc Project which contains a VMS style high-grade zinc deposit with a JORC Resource of 2.35 Mt @ 17.7% Zn, 0.9% Cu, 0.38 g/t Au & 34 g/t Ag and a Probable Ore Reserve of 1.96Mt @ 13.9% Zn, 0.6%Cu, 0.2g/t Au & 26.2g/t Ag1.
The vendors of the Option (the “Vendors”) are a consortium led by established local prospector Brian Fowler who was the Vendor of the Hemlo North Gold Project acquired by Power Metal as announced on 21 January 2021. Power Metal has secured a 30-day Option to undertake due diligence on the Option Properties.
The non-refundable Option Fee payable to the Vendors is CAD$10,000 payable in cash covering all the Option Properties.
Prior to the Option expiry Power Metal may elect to acquire one or more of the Option Properties.
For the acquisition of a 100% interest in the each of the Option Properties the following cash and equity consideration is payable:
Upon Option Exercise the POW shares payable as consideration are new ordinary shares of 0.1p each in the Company at an issue price of 3.0 pence per share (“Acquisition Shares”).
The cash costs of the acquisition will be funded from Power Metal’s existing Canadian Dollar cash account.
The Vendors will retain a 2% net smelter royalty (“NSR”) in respect of each of the Option Properties. Power Metal may purchase 1% of each NSR for each Option Property, at any time, by making a cash payment to the Vendors of CAD$500,000 per Property.
The Vendors, will continue to work with Power Metal in the local management of any new properties acquired through this transaction; the development and implementation of exploration plans and the identification of further new opportunities.
The Exploration Plan:
– Ongoing exploration spend would be at the discretion of Power Metal as the 100% owner of the Option Projects.
– Preliminary exploration work planned for the Option Properties will include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing.
– The Province of Ontario has an established mineral exploration industry with a large number of local exploration contractors that could be engaged to fulfill the planned work on a cost effective basis.
COMPETENT PERSON STATEMENT
The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.
Source 1: Superior Lake Resources Limited https://superiorlake.com.au/pick-lake-winston-lake-zinc-project/#:~:text=The%20Project%20is%20a%20high,ASX%20announcement%2028%20August%202019
The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.
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
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