Power Metal Resources option for Australian copper-gold acquisition in the Paterson Province

Power Metal Resources (CVE:PWM) (OTCMKTS:PWRMF) (FRA:OAA1) has secured an exclusive 60-day option for the potential new acquisition of copper-gold focused exploration interests in the Paterson Province in the eastern Pilbara Region of Western Australia. The company has signed an option agreement to acquire a 100% interest in First Development Resources PTY Ltd (FDR), an Australian private company holding the Wallal Project and an option to acquire the Ripon Hills Project. The option agreement fee of £30,000 will be satisfied through the issue of one million Power Metal new ordinary shares of 0.1 pence each in the company at an issue price of 3 pence per share. Should Power Metal exercise the option for the acquisition of FDR, the company will pay initial consideration of A$50,000 in cash (around £28,304) and £150,000 payable through issue of 5 million new ordinary shares at 3.0 pence per share. “Building Australian exposure” Power Metal chief executive officer Paul Johnson said: "Power Metal is keen to build its exposure to Australian base and precious metals exploration where there is, in our view, the potential for large scale metal discoveries in a secure and stable operating environment. “Through our joint venture in the Victoria Goldfields, and subject to due diligence, through this acquisition, we will have operating interests in two of the major centres for exploration activity in Australia.” Regional prospectivity The Paterson province is considered highly prospective for gold-copper and base metal mineral systems with a significant level of exploration activity underway across the region following recent high-profile copper and gold discoveries by Rio Tinto Limited (ASX:RIO) (LON:RIO) (OTCMKTS:RTNTF) at their Winu property and by Greatland Gold PLC (LON:GGP) (FRA:G8G) with the Havieron discovery. The area also has developed mine and processing infrastructure due to the presence of established mining operations, including Newcrest Mining Ltd’s (ASX:NCM) (TSE:NCM) (OTCMKTS:NCMGF)Telfer Mine and the Metals X Limited (ASX:MLX) (CVE:XTM) (FRA:FG5) (OTCMKTS:MLXEF) Nifty Copper Operation (planned as a mine restart). “Surge in exploration activity” Johnson said: “The level of interest in the Paterson Province has been somewhat dramatic after the Winu and Havieron discoveries, much as the success of the Fosterville gold mine in the State of Victoria led to a surge in exploration activity in 2020. “Power Metal is positioning itself to develop a diverse and expansive exploration business in Australia, and this is another important step forward." Wallal and Ripon Hills Projects The Wallal Project currently 100% owned by FDR comprises E45/5816 an exploration licence application covering 390 square kilometres in the western quadrant of the Paterson Province  with a favourable lithospheric setting for substantial base metal deposits consistent with the Winu discovery - predominantly copper-gold-silver with a JORC compliant Inferred Resource of 503 million tonnes at 0.45% copper equivalent. Notably, at Wallal there is a 46 kilometre strike feature, which is part of a geological structure called the Vines Fault, that is considered highly prospective copper-gold mineralisation. FDR also has a right to acquire 100% of the Ripon Hills Project from Great Sandy Pty Ltd (Great Sandy) a private Australian Company. The Ripon Hills Project comprises E45/5088 a granted exploration licence covering 42 square kilometres prospective for base metal-gold mineralisation and is proximal to Rumble Resources Ltd’s (ASX:RTR) (FRA:20Z) Braeside Project where new base metal discoveries have been made. Option agreement Upon exercise of the option and in addition to the initial consideration: Power Metal will issue 5 million warrants with an exercise price of 4.5 pence per new ordinary share and life to expiry of 3 years from the date of option exercise; Upon grant of exploration license application E45/5816 (Wallal Project) and the transfer of the granted exploration license E45/5088 (Ripon Hills Project) into FDR, a further £100,000 consideration is payable through the issue of 2,857,143 new ordinary shares at an issue price of 3.5 pence each; and Power Metal will issue the Vendors 2,857,143 warrants with an exercise price of 5 pence per new ordinary share and life to expiry of 3 years from the date of option exercise. Additionally, the vendors will retain a 2% net smelter royalty (NSR) over the licence application E45/5816 and granted licence E45/5088 and Power Metal will have the right to purchase 1% of this NSR for A$1 million (payable as cash or in full or part) by the issue of new ordinary shares based on the Power Metal share volume weighted average price in the 7 trading days prior to date of notification to the Vendors of the NSR purchase. Exploration plans FDR and their professional licensing and geological teams will continue to work with Power Metal following the option exercise to undertake ground exploration and to further build the licence footprint in the Paterson Province. While the area has excellent mining infrastructure, there are many parts of the region - highly prospective for copper-gold mineralisation - which are under-explored. In turn, this enhances the upside potential as much of the area is masked by surficial cover. Using an array of modern exploration techniques, comprising reconciling geophysics and geochemical surveys, the exploration would seek to efficiently and cost effectively identify priority test-drill targets.