With Russia and Ukraine’s situation dominating the news, markets reacting, we took the opportunity to conduct a Q&A with POW, Paul Johnson.
Market conditions are tough at the moment. How is Power Metal responding?
By doing what we do every day, regardless of tough or favourable market conditions, which is to continue to push our diverse portfolio of interests forward at pace. Arguably tough markets are the time to push even harder, rather than hibernate, because tough markets relent to favourable markets, and at that point you want a vibrant growing business.
You say you are pushing hard, but what progress have you made that demonstrates that push?
Let’s look at this across the portfolio and give a few examples.
We started acquiring projects in Nevada USA in June 2021 with Golconda Summit targeting a major carlin-type gold discovery. We added 3 further projects with deals during the remainder of 2021 for a combined 4 project package. This Project package was acquired through our subsidiary Golden Metal Resources, which is now advancing quickly towards a London listing in Q2 2022 – which is inception to listing in under 12 months.
In Canada, the acquisition of our lithium interests at the Authier North Project in Quebec and our uranium interests surrounding the Athabasca Basin in Saskatchewan, were followed by field exploration programmes commencing shortly after acquisition. Our aim is to conduct first exploration work rapidly post acquisition to advance projects quickly.
In Africa, we acquired the Tati project in Botswana in July 2021, and advanced the project all the way through early exploration to first drilling in October 2021. Just a few months to leverage our financial and operational resources to expedite exploration progress.
In Australia we saw an opportunity to build a brand-new Australia focused company and acquired gold/copper interests in the Paterson Region of Western Australia in October 2021 and then added to this with the Uranium & Rare Earth Element Selta Project in the Northern Territory in December 2021. The package, known as First Development Resources, is planning to list in London in Q2 2022.
There are more examples but I think these few should highlight just how quickly we are pushing forward multiple in parallel streams at pace.
As you reference your business is built on corporate transactions as well as traditional exploration – doesn’t that confuse the business plan for investors?
It makes it slightly more complicated, but we want to be the best, and to be the best you need to be stronger than your competitors in the market; which is often underpinned by firepower on the balance sheet.
As previously announced we already have a few million pounds on the balance sheet in cash and listed investment interests. That already makes us stronger than many companies, but we see it as just the start.
Disposals and spinouts from our portfolio create opportunities for disproportionate balance sheet growth, far in excess of that achievable by most of our competitors in the market. That is a key differentiator.
We have the portfolio to create multiple corporate spin-out listings and disposals. With each spin-out or disposal we are merely trimming our portfolio not hacking away at it – and by doing this we continue to bolster our underlying balance sheet. That’s what’s possible when you have built as aggressively as we have.
What do you plan to do with your growing financial strength if you are successful in the aims you outline above?
The approach is broadly as follows:
- Continue to build balance sheet value to become unequivocally a financial powerhouse in the junior resource sector.
- Explore aggressively using our underlying financial strength to invest heavily in proactive ground operations – without significant dilution to our existing shareholders.
- Distribute returns to shareholders when considered advantageous to do so.
Are you a junior resource incubator?
In part yes, with plenty of interests we have secured from ground up, with staking uranium – (Athabasca, Canada), gold (Victoria Goldfields, Australia) and gold/copper (Gawler Craton, South Australia). That’s incubator territory for sure.
We have other projects, at various stages – right up to the resource stage tungsten, silver, zinc, copper Pilot Mountain Project, in Nevada USA. Not all projects are therefore ‘incubator’ category, perhaps ‘project development’ is a better description for some.
We consider Power Metal to be a junior resource investment powerhouse now, and a much bigger one as time goes by and we execute our business strategy.
What are your exploration high points since Power Metal came into existence?
There are many but the three obvious front runners are:
- Silver Peak – bonanza grade silver in 10 from 19 holes drilled in (2021)
- Athabasca Uranium – high grade uranium from first sampling programme conducted (2021)
- Molopo Farms – significant nickel (up to 1.7%) found in first drill programme in Botswana (2020/2021)
What are you doing to advance the exploration successes above, as it seems progress has not been as expeditious as some would expect?
Progress is never as fast as you would like in a serious venture. Speculation often runs faster than reality. That said:
- Silver Peak – we are working with our partners to develop and implement a creative commercial plan for the project. Quality silver opportunities are in short supply.
- Athabasca Uranium (we only starting staking in Sept 2021) – yet there are lots of commercial options for the 7 project package. This area of our business lends itself very well to the application of creative ideas.
- Molopo Farms – Kavango Resources (LON:KAV) have an option over the acquisition of holding company Kalahari Key Mineral Exploration and if that proceeds Power Metal will have a 40% ongoing project interest with a great project partner who will push exploration forward at pace.
We have a steam train approach to business development, but equally we need to make sure we stay solidly on the tracks as we push forward.
What else is happening in exploration across the business?
Currently we have recently completed drill programmes at our Tati Project in Botswana (pending lab results now), Haneti Project in Tanzania (pending lab results now) and Victoria Goldfields Australia (pending drilling completion and lab results).
Drill programmes are planned for 2022 at the Ditau Camp and the Kalahari Copper Belt projects in Botswana, at the Golden Metal Resources projects in Nevada, and the First Development Resources projects in Australia. There are likely to be even more drill programmes launched in 2022 on top of the ones mentioned.
What’s your explanation for the new tagline “Powered By Difference”?
We are what it says on the tin, ‘different’.
We have a bigger portfolio than most, and we reach across the globe with diversified resource exploration and corporate activity.
Importantly it’s all managed out of London, in our view the best financial centre on the planet.
We now have ten exceptional team members covering geology, finance, project management and compliance. A unique group with diverse skills yet a common ethos to deliver for the Company and shareholders; and to deliver for themselves as all team members hold Company options. And we have ambition for growth based on delivery through exploration discovery and corporate value creation.
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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