Power Metal Resources PLC (LON:POW) has acquired two exploration properties in the prolific Walker Lane mineral belt in Nevada, USA from Sunrise Resources PLC (LON:SRES).
Chief executive Paul Johnson said the acquisition properties provide further exposure to precious and base metals exploration in Nevada and complement the recently acquired option over the Golconda Summit gold property in the same state.
The AIM-listed company said its 100% owned UK private subsidiary, Golden Metal Resources Limited, will use a Nevada limited liability new company to acquire and operate the properties, which include the Garfield gold-copper project and the Stonewall gold project.
Power Metal will pay an initial £20,000 cash, with £61,875 payable through the issue to Sunrise of 2.25mln new ordinary shares at a price of 2.75p per share.
A further 2.25mln warrants will be issued to Sunrise with an exercise price of 3.75p per new ordinary share and life to expiry of two years from the date of issue. If the volume weighted average price of Power Metal shares meets or exceeds 10p for five trading days the company may serve notice on Sunrise Resources to exercise and pay for the warrants within 14 calendar days or the warrants will be cancelled.
Sunrise will retain a 2% net smelter return royalty over the properties, with 1% of each project royalty able to be repurchased by Golden Metal for US$1,000,000 at any time.
Garfield is located roughly 10km east of the town of Hawthorne in Mineral County, Nevada, in the prolific Walker Lane mineral belt that hosts world class gold-silver epithermal deposits such as Comstock Lode and Tonopah, copper-gold porphyry deposits such as Anaconda, and iron-oxide-copper-gold deposits such as Pumpkin Hollow.
Initial sampling at Garfield in 2015 returned rock results up to 6% copper, 3.5 grammes per tonne of gold, and 124 g/t silver, with results of a single 26m trench in 2016 including a 2m sub-interval grading 2.18% copper and another 2m sub-interval grading 1.2g/t gold. The trench ended in mineralisation and remains open along strike.
With no additional follow-up work having been completed on the project, Power Metal plans to carry out a first work programme including a property wide systematic soil geochemical survey, followed by a programme of trenching to evaluate any copper, gold and silver anomalies identified by the soil survey.
Also in the Walker Lake mineral belt, Stonewall, meanwhile, is located approximately 15km south of the historic mining town of Goldfield in Nye County, Nevada, less than not far from the famous silver deposits of Tonopah.
Stonewall, the company said, is centred on an approximately 1.2km long milky-white quartz vein, open along strike, with prevalent low-sulphidation epithermal boiling textures, which varies in thickness between 15-20m along its outcropping extent.
Power Metal said sampling by previous operators returned anomalous gold-silver values up to 1.17g/t gold and 161g/t silver with elevated mercury, which is characteristic of the shallow parts of a low-sulphidation epithermal system.
The company plans on executing a diamond driling programme at Stonewall which will test the eastern extent and the broader system at depth, where it is postulated the Au-Ag boiling zone of the system would be found.
“Through this transaction Golden Metal, the wholly owned Power Metal subsidiary, now has a trio of gold - silver - copper exploration projects, targeting major metal discoveries in Nevada USA,” said Johnson.
“We expect to launch ground exploration in Nevada shortly, initially targeting near surface significant gold mineralisation at the Golconda Summit gold property and thereafter initial work programmes on the two properties acquired with today's announcement. Further updates to the market in this regard are expected in the near term.”