LONDON: Power Metal Resources PLC (AIM:POW), the London listed exploration company and project incubator with a global project portfolio, announced the signing of a binding subscription agreement for an investment of £4 million in Apex Royalties Limited, a private, high growth, diversified, mining royalty company.
Apex was established in late 2024 and has since grown its portfolio to five high quality royalty assets providing exposure to gold, tin, bauxite and tungsten, as more fully described below. Apex is led by an experienced board of directors with deep experience in the mining industry and, in particular, in the royalty sector, with the board comprising former directors and founder shareholders of Trident Royalties Plc (“Trident Royalties”).
Pursuant to the Subscription Agreement, Power Metal is making an investment of £4.0 million in cash (approximately US$5.3 million) into Apex, alongside other investors, as part of a financing expected to raise gross proceeds in excess of US$10.0 million (the “Apex Fundraising”), valuing Apex on a pre-new money basis at approximately £24.0 million (approximately US$32.0 million).
The proceeds of the Apex Fundraising will be used to finance part of the consideration for the acquisition of a royalty over the Pilot Mountain tungsten project, complete an option payment on a royalty over the Wuudagu Bauxite project, and provide additional working capital for future royalty acquisitions.
Sean Wade, Chief Executive Officer of Power Metal Resources, commented: “I am delighted to announce that Power Metal has secured a material position as an early and significant investor in Apex, backing an experienced team with a track record of success. Trident Royalties was successfully grown from inception as a cash shell to a portfolio of 22 royalties prior to its acquisition by Deterra Royalties Limited (ASX: DRR) for cash proceeds of £144 million, realising a significant return for investors.
Apex has delivered exceptional growth to date and has already secured a high-quality portfolio of royalty assets. Power Metal shareholders will be familiar with the Pilot Mountain and Tempiute tungsten assets, over which we will now have exposure in the form of non-dilutive royalties as the assets are advanced toward production. In addition, we will now have royalty exposure to several other high-quality gold, tin and bauxite assets – all advanced exploration projects that have potential for near to mid-term production and meaningful cash flow for Apex.
Our investment, alongside other investors, will provide significant additional capital to enable Apex to achieve critical mass. This stage of a royalty company’s life cycle tends to deliver strong returns for investors, and we look forward to participating as major shareholders in Apex’s growth trajectory.
Our expertise in project incubation and our recent crystallisation success works in synergy with Apex’s business model. This exposure to Apex’s portfolio will allow Power Metal to benefit from prospective assets without carrying the risk or financial requirements. Adding this investment into our existing portfolio of joint ventures, exploration assets, and the Minestarters platform, places Power Metal in a unique position to generate growth from a diversified portfolio that covers a range of jurisdictions and commodities.”