Power Metal Resources PLC (LON:POW) announced it has signed an agreement to acquire a 100% interest in a package of three gold exploration projects located in the prospective Hemlo North area of Ontario, Canada.
The project includes three contiguous exploration projects Roger Lake, Olga Lake and Dotted East which together cover an area of 25.82 square kilometres centred 29 kilometres north-east of Barrick Gold Corporation's Hemlo Mine, which has produced more than 21mln ounces of gold to date.
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The AIM-listed miner said the project presents an early-stage exploration opportunity prospective for hosting both gold and base metal mineralisation, situated over an underexplored part of the very prospective Hemlo-Schreiber Greenstone Belt.
The vendors will retain a 2% net smelter royalty of the properties, while Power Metal may purchase 1% in total of this NSR at any time for CAD$500,000 (£288,000).
The firm will pay a total of CAD$120,000 (£69,130) of which CAD$60,000 (£34,565) will be paid in cash and the rest by issuing to the vendors of 1.1mln new shares at the price of 3p each.
"The acquisition of three exploration projects covering a significant portion of prospective greenstone belt in mining and investment-friendly Ontario is a significant development for Power Metals,” said the firm’s chief executive Paul Johnson in a release.
“The acquisition comes at a highly competitive time when this part of Canada is attracting a significant amount of investment from Canadian listed junior explorers.”
“The project has the potential for both gold and base metal discoveries in an under-explored area which offers Power Metal, as a proactive exploration company, the potential to add significant value through early-stage exploration success."
Shares rose 2% to 2.96p on Thursday afternoon.