Power Metal Resources PLC (AIM:POW, FRA:2M5) subsidiary Golden Metal Resources has taken out an option to acquire Thor Mining PLC (AIM:THR, FRA:T5MC, OTCQB:THORF, ASX:THR)’s stake in the Pilot Mountain tungsten project in Nevada and give it full control.
Golden Metal has a 60-day period to carry out due diligence before deciding whether to take up the option.
Assuming it goes ahead, Power Metal added it intends to spin out Golden Metal into a new listing in London with the 100% interest in Pilot Mountain together with the Garfield and Stonewall projects.
Golden Metal will also hold the right to earn a 100% interest in the Golconda Summit project, another Nevada-based asset.
Paul Johnson, Power Metal’s chief executive, said: “We plan to list our wholly-owned subsidiary Golden Metal as soon as possible in the London capital markets.
“The Pilot Mountain project, subject to due diligence, will be an important strategic interest embedded within that listing and provide a significant increase to the value of the Golden Metal listing proposition.
“In addition to the JORC (2012) compliant Mineral Resource at Pilot Mountain, we are of the view that there is considerable exploration upside potential.
“Historic work undertaken, including a Scoping Study completed in 2018, has demonstrated the potential viability of production from the Pilot Mountain deposit, further bolstered by strong metallurgical test results.
“On a standalone basis, Pilot Mountain is a significant advanced asset and complements the earlier stage exploration interests currently held by Golden Metal.”
Thor will receive US$25,000 cash and US$12,500 in shares for the option, which, if taken up, will see a further cash payment of US$115,000 and shares worth US$1.65mln issued to the Aussie-based junior.
Warrants to subscribe for 4mln Power Metal shares at 4p will also be issued to Thor if the option is exercised, while a milestone payment of US$500,000 becomes due if the JORC resource at Pilot Mountain rises by 25% over the next two years.
Nicole Galloway Warland, Thor’s managing director, said: “We are very pleased to enter into an Option Agreement with Power Metals for the 100% sale of Pilot Mountain Project in Nevada, USA.
“This strategic divestment of a non-core asset is in line with our focus on copper and gold projects; with the acceleration of exploration activities towards exploration drilling activities at Ragged Range Project in the Pilbara WA, and progressing baseline studies for In-situ Recovery for copper and gold at Alford East Project, SA.”