Tuesday saw Power Metal Resources (LSE:POW) announce the proposed extension of its operations into the US with an agreement over a potential gold project in Arizona. The firm, which until now has been entirely focused on battery metal projects across Africa, has signed an agreement that allows it to acquire a ‘Right to Earn In’ to a 60% interest in the Alamo project.
Alamo represents a package of mining claims covering around 340 acres in west-central Arizona and was initially identified as prospective for gold following the discovery of numerous, near-surface gold nuggets. According to Power Metal, the asset’s geological environment supports further exploration to investigate the source of this nugget gold and the potential for an extensive mineralised system. What’s more, the firm added that the region in which the Alamo project is situated is prospective for precious and base metals. For example, regional mines have produced silver, lead, zinc, and copper as well as gold. These factors fit with the organisation’s previously-stated strategic objective of making large-scale metal discoveries both within and outside Africa, should a compelling-enough opportunity arise.
Among the vendors of the assets are former Newmont Goldcorp board director Joe Carrabba and Winston Gold chief executive Murray Nye. Assuming the Alamo asset passes Power Metal’s due diligence process successfully, the pair will join a special advisory committee at the business.
For its option for a right to earn-in to 60% of the Alamo project, Power Metal would cover property payments over four years and exploration expenditure over three years. However, these terms are subject to the satisfactory completion of due diligence.
The firm has now entered into a 45-day period that will see it inspect the asset and complete an initial work programme. This will include nugget verification and geochemical sampling to validate the asset’s prospectivity. Further details around the terms of the proposed deal can be found here.
On Power Metal’s proposed expansion to the US, chief executive officer Paul Johnson said: As a Company we have remained open to the review of new additional opportunities and stated we may move ahead with compelling projects, including new jurisdictions outside Africa and in new commodities. We have conducted a comprehensive review of opportunities that will complement the Company’s mandate of securing interests that offer considerable upside potential through the implementation of disciplined programmes of exploration.
The Alamo Project provides access to a package of claims with notable native gold nugget finds at surface, and a geological backdrop that encourages us to search for the source of the Nuggets in the bedrock where, it is postulated, the potential for a large gold system exists. The Project has a rich story and one in which we are excited to have the opportunity to play a part. We will provide further information to market as we proceed through the site visit and due diligence processes in the near term. The Project opportunity appears compelling in itself and will be made more so with Joe Carrabba and Murray Nye working alongside us in an advisory capacity and adding to our confidence.’
Meanwhile, Johnson said Power Metal is continuing to make ‘great progress’ across its projects in Africa. He added that shareholders should expect further updates in the near-term covering operational and corporate activities.