Justin Reynolds
Forget the rule-of-six when you can invest in the seven wonders of the world…
“…With its blend of adventure and financial prudence Power Metals looks like a decent bet for those seeking exposure to the global metals exploration space…”
At first sight the global portfolio of mining interests held by London-listed exploration and development company Power Metal Resources (LON: POW) – reaching from North America, to western and southern Africa, and down to Australia – might seem somewhat daunting to assess.
But the company’s seven prospects might be best assessed not so much by trying to predict winners among its shapeshifting set of assets, but by the rigour with which it pursues the philosophy of considered diversification that inspired their acquisition.
Chief Executive Officer Paul Johnson, who has a long track record in the mining sector as a former CEO of Metal Tiger plc (AIM), Metal NRG plc (NEX) China Africa Resources plc (AIM), and Chairman of ECR Minerals plc (AIM), set out the Power Metal credo at length in a market update of 14 July 20.
‘Many companies put their business case forward focused around a single major project and concentrate their energies around that,’ he said. ‘I understand this, but it’s not the Power Metal approach, where instead, in our view, we have numerous major projects, each of which is capable of delivering a transformational discovery and by virtue of this shareholder wealth.’
Mr Johnson added that projects will only remain in the company’s portfolio should they demonstrate their potential to deliver a discovery, and if the work programmes they require can be financed without recourse to external funding. Power Metal will ‘break the dependency most juniors have on market financings’. That month the company got its opportunity to make good on that promise by completing a £1m fundraise that brought its working capital for investment in its programme to £1.6m.
Portfolio
Power Metal has spread its net wide in pursuit of a company-making opportunity, pursuing a variety of projects ranging from early stage greenfield exploration to later stage drill ready prospects, together prospective for minerals and metals that include cobalt, copper, gold, lithium, nickel and PGM. Prospective investors would be well advised to study the company’s fast moving market updates for the details and status of each project, but at the time of writing they might be summarised as follows:
Victoria Goldfields, Australia
A 49.9pc interest in a joint venture with Red Rock Australasia exploring the Victoria Goldfields in southeast Australia, a region that has attracted a particularly high volume of new license applications this year. So far 12 licence applications have been made, with three having completed the mandatory 14 day public advertising period before exploration can commence. A technical report that will inform the prospects for seven further licenses is currently being reviewed.
Alamo Gold Project, Arizona
An option to earn in up to a 75pc interest in the Alamo Gold Project, a package of mining claims in west central Arizona, prospective for silver, lead, gold, copper and zinc.
Molopo Farms Complex Project, Botswana
An 18.26pc interest in the Molopo Farms Complex Project in Botswana, where progress is being made towards a drilling programme that will target high profile nickel sulphide targets. Power Metal has set aside US$500,000 for the programme, at which point it would earn-in to a 40% interest.
Ditau Camp Project, Botswana
Power Metal is currently in discussion with Kavango Resources to take over the Ditau Camp Project in Botswana, prospective for rare earths. Subject to due diligence, the period for which ends at the end of this month, Power Metals will acquire a 51pc project interest.
Cobalt Blue Project, Cameroon
A 100pc interest in the Cobalt Blue Project in Cameroon, where exploration work undertaken last year identified elevated vanadium and titanium, and possible cobalt mineralisation at higher elevations than previously, within thicker lateritic cover. A project update will follow the completion of an ongoing review of the prospect
Kisinka Project, Democratic Republic of the Congo (DRC)
A 70pc interest in the Kisinka Project in the DRC, where a 6.8km copper anomaly identified by a sampling programme has been confirmed by a recently completed pitting and mapping programme. The company is currently waiting for assay results from the mapping survey to give the green light for further magnetic and electromagnetic surveys.
Haneti Project, Tanzania
A 35pc interest in the Haneti Project, Tanzania, prospective for nickel, PGMs, gold and lithium. This joint venture with Katoro Gold – highlighted in a TMS profile on Katoro earlier this month – has identified two high-profile Nickel-PGM targets, including Mihanza Hill and Mwaka Hill, which might yield large-scale nickel sulphide discoveries.
Silver Peak Project, Canada
An option to take a 30pc stake in the Silver Peak Project, a portfolio of mineral claims over a system of high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins, part of the historical Eureka Victoria Silver Mine, in southern British Columbia. Originally discovered in the late 1800s, the Silver Peak mines reportedly exploited near surface oxide material ranging 500 to 658 oz/ton silver. This month the findings of an exploration programme in which channel samples were taken from the Victoria vein faces exposed in the cliffs were submitted for expedited assay testing. Power Metal will exercise its option on the basis of these findings.
Prospects
Power Metals Resources has been highly active this year, the pandemic notwithstanding, expanding an already broad portfolio and securing the funding necessary to explore its potential.
And investors seem to agree the company is following the principles of diversification and prudent financing established by its management, with its share price rising sharply from 0.4p at the start of the year to just over 1.3p today. With its blend of adventure and financial prudence Power Metals looks like a decent bet for those seeking exposure to the global metals exploration space.
To View the latest Power Metal Resources presentaion click here
Here, Power Metal Resources Paul Johnson walks Proactive through its latest business update and talks progress on its existing projects – plus two others under due diligence.
The author was paid for this article but does not hold shares in the above company.
