Power Metal Resources PLC (AIM:POW, OTCQB:POWMD) saw its share price jump 10% after securing £2 million from mining investment group ACAM LP.
This funding, through loan notes with attached warrants, precedes a potential joint venture worth an additional £10 million.
Power Metal has entered an eight-week exclusivity period with ACAM to form a uranium-focused joint venture involving its licence portfolio.
The proposed deal includes an initial equity investment of £10 million by ACAM into Power Metal's Canadian subsidiary, granting ACAM a 70% interest in the business.
Depending on the partnership's success, Power Metal could receive up to £4 million more.
If the joint venture proceeds, Power Metal shareholders will benefit from multiple significant drilling programs.
ACAM's extensive experience in global mining and exploration, including a notable project in Greenland with Amaroq Minerals, adds significant value to the partnership.
Power Metal plans to cancel the initial public offering of Uranium Energy Exploration (UEE) if the joint venture is finalised. The costs, approximately £500,000, will be covered by the loan note proceeds.
Consequently, planned sales of the Reitenbach Uranium Property and E-12 Uranium Property are unlikely to proceed. The remaining funds from the loan notes will be used for general corporate purposes.
CEO Sean Wade expressed confidence in achieving a successful outcome, stating: "Whilst there can be no guarantee that the joint venture will complete, we are confident that we will achieve a successful outcome and will update shareholders once the legally binding documentation is finalised.
"ACAM has already made a significant commitment to the company pursuant to the subscription and we look forward to working with them to successfully conclude the proposed joint venture."
The shares rose 1.7p to 18.7p.