Power Metal Resources acquires 100% of FDR Australia
LONDON, UK: Power Metal Resources has signed a revised agreement for the 100% acquisition of First Development Resources Pty Ltd (FDR Australia). This Agreement is unconditional and binding.
Paul Johnson Chief Executive Officer of Power Metal Resources plc commented: “Today marks an important day for Power Metal as we have completed an unconditional agreement to acquire FDR Australia with its unique portfolio of projects in the Paterson region of Western Australia.
We have undertaken important work in 2021 which focused mainly on the Wallal project where three magnetic bulleyes anomalies have been identified which we consider to be prospective for large scale gold-copper discoveries. That work has increasingly strengthened our belief in the Wallal project’s potential which has led to our decision to acquire FDR Australia outright.
Power Metal Resources has now begun preparations for a planned drill programme at Wallal targeting the Eastern and Border anomalies. Alongside this we are undertaking corporate work to secure a listing of the ultimate holding company FDR UK on the London capital markets.
There will be further announcements as we move FDR UK forward from both exploration and corporate perspectives.”
Initial Consideration
For the acquisition of the entire share capital of FDR Australia and its current sole granted licence E45/5816 (Wallal Main) Power Metal will pay initial consideration of A$66,000 in cash and £366,667 payable through issue to the Vendors of 13,333,333 new Power Metal Ordinary Shares of 0.1p (“new Ordinary Shares”) at an issue price of 2.75 pence per share (“Initial Consideration Shares”).
(Note: The A$66,000 cash will be used to eliminate all shareholder loans in FDR Australia leaving no liabilities as at the Agreement date. For the quarter ended 30.9.21 the FDR Australia Unaudited Profit and Loss Statement shows a loss of A$3,664 and as at 30.9.21 Accumulated Losses of A$29,229. The Accumulated Losses and any subsequent costs to the Agreement date will be eliminated as described above).
In addition, Power Metal will issue the Vendors 13,333,333 Power Metal warrants with an exercise price of 4.5p per new Ordinary Share and life to expiry of 3 years from the date of issue (“Initial Consideration Warrants”). Should the volume weighted average price (“VWAP”) of Power Metal shares meet or exceed 7.0 (seven) pence for a 5 consecutive trading days Power Metal may serve notice on the Vendors providing 10 trading days to exercise and pay for the Initial Consideration Warrants or the Initial Consideration Warrants will be cancelled.
Additional Consideration
For the acquisition of all other FDR interests (with the exception of Ripon Hills Project – E45/5088 – an option over which is outlined below) Power Metal will pay additional consideration of £320,000 through the issue of 10,000,000 new Ordinary Shares at an issue price of 3.2p each (“Additional Consideration Shares”).
In addition Power Metal will issue the Vendors 10,000,000 warrants with an exercise price of 5p per new Ordinary Share and life to expiry of 3 years from the date of issue (“Additional Consideration Warrants”). Should the VWAP of Power Metal shares meet or exceed 10.0 (ten) pence for a 5 consecutive trading days Power Metal may serve notice on the Vendors providing 10 trading days to exercise and pay for the Additional Consideration Warrants or the Additional Consideration Warrants will be cancelled.
Ripon Hills E45/5088 Option
FDR UK may, at any time within 12 months of the date of signing of this Agreement, acquire E45/5088 (the Ripon Hills project) with consideration comprising a payment of A$20,000 (to be paid as 398,036 Power Metal Ordinary Shares at an issue price of 2.75p and 398,036 Power Metal warrants at an exercise price of 4.5p and on the same basis as the Initial Consideration Warrants above) to Great Sandy Pty Limited (“Great Sandy”), current holder of the licence. Upon witten notice of exercise and payment, Great Sandy will transfer E45/5088 to RH Resources Pty Ltd (which will become a wholly owned subsidiary of FDR Australia).
Royalty
The Vendors will retain a 2% net smelter royalty (“NSR”) over all licences included in this transaction and FDR UK will have the right to purchase 1% of this NSR for A$1,000,000.
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