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Power Metal Resources newsflow set to increase as projects mature

Snapshot

  • Junior miner with a suite of assets in Africa
  • Expanded into US gold play
  • Battery metals also a focus 
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Quick facts: Power Metal Resources

Price: 0.6 GBX

AIM:POW
Market: AIM
Market Cap: £3.32 m
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What it owns

Having changed its name to reflect a refocusing, Power Metal Resources PLC (LON:POW) has set about exploring new countries across Africa, and new metals to fulfil its nomenclature.

Previously known as African Battery Metals PLC, and before that Sula Iron & Gold PLC, the explorer has diversified into platinum group metals, copper, cobalt and nickel after discontinuing its earlier iron and gold exploration at Ferensola in Sierra Leone.

The Power Metal portfolio consists of a number of major assets:

  • Kisinka copper-cobalt project in the Democratic Republic of Congo in which a 7 kilometres zone anomalous for copper has been identified
  • A suite of cobalt-nickel projects in Cameroon, neighbouring the Nkamouna-Mada project, which is currently the largest cobalt project anywhere in the world outside of the Democratic Republic of Congo
  • A 25% stake in the Haneti project in Tanzania currently being worked up by Louis Coetzee’s Katoro Gold PLC (LON:KAT), with a right to increase its interest to 35% through the payment to Katoro Gold of £25,000 in cash by 15 May 2020
  • A nickel, platinum group metals and copper exploration complex in Botswana, Molopo Farms,  that’s wholly owned by Kalahari Key Metals in which Power Metal has 18.26% rights that can rise to 40%.
  • The Alamo project in Arizona comprises some 340 acres see as being prospective for gold, with native gold nuggets observed near-surface in multiple locations.
  • A gold joint venture in Australia with Red Rock Resources, called Red Rock Resources Australasia.

How it's doing

In April, Power Metal said that four drill targets have been selected for drilling at the Molopo Farms Complex project, which it owns jointly with Kalahari Key Minerals.

The decision to drill follows helicopter-borne electromagnetic survey, ground geophysics and a subsequent desktop review.

Initial drilling is expected to focus on the Chipo target group in the northern area of the Molopo Farms project

Earlier that month, the company said it had agreed to the conditional acquisition of a 51% interest in the Ditau project in Botswana for £150,000 from Kavango Resources PLC (LON:KAV).

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Inflexion points

  • POW has five major interests all of which it believes can produce a major discovery
  • Drilling commences at Molopo Farms in Botswana
  • Increasing exposure to battery metals and copper

What the market says; First Equity 

"By deducting Katoro’s equity and warrant valuation from the current market cap and a small Kavango loan note investment, investors are essentially valuing POW’s projects at only £1.7m.

"Given POW’s breadth of exploration projects and commodity exposure, many of which are located within exploration rich target areas, this figure is clearly too low, especially when considering POW’s increased interests in the gold sector, a precious metal that continues to rise in the current global crisis, and more so when measured in sterling terms.

"We anticipate an intensive news-flow period ahead in the coming months, with the commencement of drilling at MFC, more details being learnt about the Victoria Goldfields project, Kisinka results and possible completion of due diligence at Ditau and Alamo.

"A market cap of around £2m grossly understates the potential upside of the projects and investments held by Power Metal Resources, and its recent increased exposure to some highly prospective and exciting gold projects." 

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