Think Big think Global for Power Metal Resources
“…I’m not thinking how do Power Metals justify being a £25 to £30 million pound market cap company, but how do I justify the market size being ten times bigger than that?…”
While the fundamentals of investment usually follow the principles of ‘Buy, Sell, or Hold,’ the model being pursued by Power Metal Resources is ‘Dispose, spin off, listing, joint ventures or other commercial agreements.’
As Chief Executive Paul Johnson explains to Total Market Solutions, the favoured option for the current portfolio is the spin off adhering to the exploration company’s strict value accretive strategy.
Take Australia for example where Power, which has a joint venture with Red Rock Australasia, has a 2336 square kilometre footprint of licence applications in the middle of the hugely prospective Victoria Goldfields region. “We’re surrounded by some pretty chunky neighbours including Fosterville South which saw their share price on the TSX go up ten times plus when they came to market with their Victoria interest,” says Johnson who is giving every indication that Power’s core assets will be following the same path.
” In Canada there is a huge appetite for Victoria Goldfields opportunities and therefore it makes natural sense to take the core interests of Red Rock Australasia into that market. We think we could see a very material valuation uplift from that package by putting it into that market place.”
Power’s potential Australian assets on the Toronto Stock Exchange may also be joined by the company’s package of Canadian assets. At least one TSX listing is a certainty as evidenced in the personnel recently recruited by Johnson who adds, “For each one of our project interests that we spin out, it needs a full on operational and marketing focus.”
So back to that value accretive strategy. Johnson insists that any listing process takes a back seat to day to day activity. He explains that while the future of assets are being determined, exploration work carries on and projects further increase in value so that theoretically by the time they come to IPO there’s an ‘even bigger uplift.’
The bigger excitement is being generated in Africa where there are the exploration projects of Hineti in Tanzania and Molopo in Botswana. The market awaits full intelligence of recent drilling campaigns, but it’s Haneti where the company is targeting large scale nickel sulphide PGM that “may deliver company transformational news.”
In this frank interview with Sarah Lowther, Johnson explains why if the world shut down again in terms of operational activity, Power Metals could still create value “like it’s going out of fashion,” and about the shareholder distribution that’s being considered.
Watch Paul tell Proactive Investor’s Andrew Scott how the company has been building ‘furiously’ over the past couple of years, and is now a global operation with projects in North America, Africa and a gold joint venture in Australia to give shareholders broad exposure.
Power Metals Resources is on Twitter – @PowerMetRes
The author was remunerated but does not hold shares in the company
