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Power Metal Resources’ seals Saudi exploration deal & advances IPO plans

26 March 2024 17:20

Power Metal Resources PLC (AIM:POW) is exploring uranium potential through an Initial Public Offering (IPO) with Uranium Energy Exploration plc while simultaneously entering a Saudi Arabian venture through a binding earn-in agreement with RIWAQ Al-Mawarid for Mining (RIWAQ), indicating a strategic focus on expanding its global footprint in both the uranium sector and the Saudi Arabian mineral exploration market.

IPO plans with Uranium Energy Exploration

Power Metal Resources’ is in the process of planning an IPO for its uranium interests, using UEE as a vehicle for admission to the Alternative Investment Market (AIM).

The company’s CEO, Sean Wade, noted the ongoing marketing efforts attracting interest from various investor segments, including institutional investors, high net worth individuals, and retail investors in the UK and beyond.

However, certain potential strategic investors have expressed preferences for alternative deal structures, potentially involving different asset combinations or an expanded asset portfolio with a revised business model.

Power Metal Resources’ board is evaluating these options and will provide updates on the progress of discussions, including their potential impact on the proposed IPO of UEE in terms of timing and structure.

Binding earn-in agreement

Additionally, the company has entered into a binding earn-in agreement with RIWAQ, an industrial and mining company headquartered in the Kingdom of Saudi Arabia.

As a subsidiary of EV Metals Group plc (EVM), RIWAQ specialises in advancing the Saudi supply chain for critical raw materials by engaging in mineral exploration, mining, and processing activities.

RIWAQ holds exclusive ownership of 15 tenements, covering 1487.11 square kilometres in the Balthaga Suite, approximately 400km east of Jeddah in the southern region of the Arabian Shield, where 11 tenements currently possess exploration licenses and the remaining four await approval.

Notably, 13 of the tenements show promise for hard rock lithium exploration, with one earmarked for nickel sulphides and another for a copper/molybdenum porphyry system.

Power Metal Resources’ has been granted the opportunity to acquire a 20% ownership interest in the tenements through funding US$350,000 in expenditure within 12 months, with an additional 10% interest available upon further funding of US$150,000 within six months after achieving the initial interest.

Subsequently, a non-binding agreement has been established for both parties to form a contributing joint venture based on their respective tenement interests following the acquisition of either the first or second interest, depending on which occurs later.

CEO commentary

Sean Wade expressed his satisfaction, stating, “I am delighted to be able to report the signing of this binding agreement, our first major agreement for exploration activity in KSA. This is a very exciting collection of tenements and we are eagerly anticipating starting work with the RIWAQ team after Ramadan and Eid al-Fitr.”

Wade further elaborated on the company’s intentions, saying, “Our intention is to form a long-term partnership with EVM, RIWAQ’s majority owner, to provide upstream opportunities for EVM’s growing midstream processing operations. RIWAQ have a number of other licences currently under application, highlighting further growth opportunities beyond this initial agreement.”

He also highlighted the strategic positioning of these assets within their majority-owned subsidiary, adding, “These assets will reside within our majority-owned subsidiary Power Arabia Ltd, which as announced on 12th March 2024, is currently undergoing a pre-IPO financing round to fund activities in the region with a view to a listing on the London capital markets in due course.”

Power Metal Resources AIM-listed share-price has risen 14.29% and is currently trading at at 0.80 pence (5:15 pm UTC+ 8 hours).

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