Yet another String to the Bow of Power Metal Resources : Yellowcake
“…We are creating a monster as the exploration side of the business delivers a number of successes…”
The first thing that Paul Johnson clarifies in this interview is that his company Power Metal Resources is reviewing uranium opportunities on an ongoing basis.
North America, Africa and Australia are all being scoured for ‘yellowcake’ opportunities, and at speed, particularly as the investor community on social media platform Reddit have been using their collective buying power to push up the prices of uranium-related stocks. Take Aura Energy for example which has seen an over 200% appreciation in its stock over the past month.
So, Power’s ‘first gambit’ is the Athabasca Basin in Canada where it’s staked a claim in four 100% owned uranium exploration properties. Johnson describes Athabasca as an established uranium jurisdiction where many junior explorers have been working for some time. In fact Johnson had dabbled in this space during the noughties when he was at the helm of Metal Tiger. Timing is everything, and Johnson in his own words says ‘then’ was about six years too early. But now in 2021, this investment in Saskatchewan is just about right in terms of right place, right time and the licences are “very prospective.”
“It’s not pure moose pasture,” says Johnson citing historic evidential data which means Power is not starting Athabasca from zero, but from the position of indentified intelligence allowing the company to expedite its typical approach to work programmes which is to “crack on” particularly when work windows are condensed due to inclement very, very cold weather.
“Way back in the noughties, major, major deals were being done and great fortunes were made among some of the well-known British investors from the uranium space.” Can it happen again muses Johnson? “Well it kind of looks like it can, and it probably will to be honest, so it’s important to be part of that process.”
Did Power overpay for the licences? It depends on whether you think $7000 Canadian dollars for the cost of registration fees for licence claims is fair value. Johnson thinks it is. “It’s a very modest cost of entry. No encumbrances because we’re not acquiring someone else’s package with a royalty attached to it. So, it’s a fresh 100% owned interest for Power and it’s our starter for ten.” Johnson repeats the company is “looking at various other things at the moment.”
Power Metals don’t look, buy, curate, says Johnson. “We don’t adopt the usual junior mantra of picking up a project just because it’s popular and then just leaving it there and hoping the market likes it and buys our stock. If we go into something we’re looking to build a strategic business out of it.”
Away from Canada,“everything is happening” at the company’s Tati project in Botswana including prospecting, mapping and sampling which has resulted in multi-kilometre, multiple anomalies for nickel, arsenic and some ‘fantastic’ gold in soils. “Right now the team are in the field doing geophysics. By the end of the month we’ll be drilling with reverse circulation drilling some of the key targets there.”
“In my experience it’s the fastest exploration programme I’ve ever seen from acquisition through to drilling key targets. What can it reveal? We are hopelessly optimistic. We love the Tati project and we think it’s one of those great opportunities, but until we put the drill holes in we won’t really know.”
Johnson adds the mischievous caveat by deliberately using an over-used corporate cliché. “Yes the team are excited.”
As for comparing Power’s Australian Wallal Project to Greatland Gold’s Havieron project, Johnson says that some investors should stop being sensitive and proprietorial because geology is geology and if there are similarities between two company’s projects, then so be it, but he is making the comparison from a position of intimacy. He was on the board of Greatland Gold at the time Havieron was the subject of a breakfast board review and then “People were more interested in their bacon sandwiches.”
How things have changed over the past five years. “Little did we know what a monster that would become,” says Johnson. “You have to forgive me for daring to dream that we may have something similar in the Patterson project that we have with FDR – First Development Resources.”
He then unashamedly borrows that analogy by telling investors that he’s building Power Metal Resources into its own ‘monster.’
It will take cash as well as being canny to create that monster, and Johnson is doing that by spinning out projects into their own listed vehicles so he doesn’t have to come to market cap in hand.
“We’re at 14 months since the last financing. By doing these spin outs and creating the value now, I’m effectively providing the finance for a much larger business with much larger cash demands in the future as the exploration side of the business delivers a number of successes.”
“We are not normal. We’re going for a big scale organisation with huge levels of activity,” and then Johnson gets emotional. “We’ve got an amazing team. Someone else is coming soon that’s going to add major value to our organisation from an operational management perspective. It’s fabulous. I think we’re building something amazing.”
Johnson certainly hopes that’s the case because fully diluted he holds 9% of the stock.
In this podcast with Sarah Lowther, Paul reinforces the message that what he’s creating is a ‘beyond incredible’ global project. He says it has never been done before on this scale in London and suspects it will never be done again and that’s before he started talking about the lithium in Canada.
Watch Paul talk to StockBox’s Mark Fairbairn about how the’ spin out and value creation’ model that Johnson has adopted.
Read the company’s September 2021 corporate presentation
Follow the company on Twitter – @PowerMetRes
The author was remunerated but does not hold shares in the company