Global opportunities a plenty for Power Metals Resources PLC
“…If you do need working capital, you can access it and that’s what we did very quickly, very efficiently in a material quantum…”
And after the over-the-weekend placing that raised one million pounds in 24 hours, Power Metal Resources now has circa three million pounds of working capital which chief executive Paul Johnson says “is fabulous for us given where we are and what we are looking at doing in the business.”
Johnson isn’t grandstanding when he says that his job is “to protect my current shareholders interests,” but investors are divided about his decision to conduct and condone a placing when the share price was hovering at a year low.
He describes the period before the placing as ‘intense’ and couldn’t participate in this round of funding as he is an insider. Timing is everything and he gives an intriguing generic reasoning for November’s placing that raises more questions than it answers. “The working capital is helpful from all dimensions in our business. If we’re selling it’s good to sell when you’re in a strong position, when you’re buying it’s good to show you have the capacity to buy the asset and to develop it in the right way, and if you’ve got opportunities inside the business to restructure then it’s great because you need to demonstrate you can actually deliver.”
Johnson talks about how the board is deliberately blowing out the scale of Power’s business. At the last count it had 13 projects over three continents targeting ten commodities with four spin out activities.
“In difficult market conditions you pick up assets far more cost effectively and easily than you ever would do when the sector shows strength, so we build our business on the back of weakness. We then deploy that business through spin outs and through active exploration during periods of strengthening market and we generate value.”
Two London IPO’s are scheduled for the first quarter of 2022 with February being the month most quoted for the listing launches. Those listings are associated with the packages being created in Australia through partnerships with Red Rock Resources and through Power’s wholly owned subsidiary First Development Resources. The latter is targeting “Haveiron look-a-likey drill targets in the not too distant future, so this is deep undercover targets looking for gold and copper. We’re in the preparatory stage now to get our drill targets ready and we are looking to list that package in London in the coming months.”
The period pre-placing was intense and it looks like that there will be no let up in corporate events. Within one day of November’s placing going public Johnson says having the finance there “has opened up a number of interesting doors.”
Power’s last placing was in July 2020 and Johnson says investors who participated then have done very well and “I hope the participants in the November 2021 placing will do equally well, but that will be a dramatic return.”
He can’t explain why partner Red Rock Resources has been selling his stock, but he’s not overly concerned. It’s all about personal choice. But he wants all shareholders to stay because “I think if they sell now at the bottom of the market it’s very poor timing for them particularly in terms of our business which is primed for a recovery in the space. And they miss out on a major return over the coming days, weeks and years.”
He does however stress that “it’s not going to be too long before people start to see the things that we’ve been doing.”
Listen to Paul tell Sarah Lowther why he’s not concerned about a JV partner selling #POW’s stock and how delighted he was about the early interest for next year’s IPOs.
Watch Paul talk to Proactive’s Stephen Gunnion about the placing and what it hopes to achieve.
And watch Paul talk to StockBox’s Mark Fairburn about how discoveries are going to lift the company’s share price.
Follow the company on Twitter – @PowerMetRes
Read November’s corporate presentation
The author was remunerated but does not hold shares in the company