Transaction Complete and Power Metal Agrees Terms for the Early Clearance of the Tail Benefit Held by Thor Mining on the Pilot Mountain Project, Nevada, USA
Power Metal Resources PLC (LON:POW) the London AIM listed company which finances and manages global resource exploration projects, announces a transaction update following the exercise of the option (the 'Option') on the Pilot Mountain Project ('Pilot Mountain' or the 'Project') located in Nevada, United States of America ('USA') (the 'Transaction').
The Company's announcement in respect of the Transaction of 1 November 2021 may be viewed through the following link: https://www.londonstockexchange.com/news-article/POW/acquisition-of-pilot-mountain-project/15193667
Paul Johnson, Chief Executive Officer of Power Metal Resources plc commented: 'I am pleased to confirm completion of the Pilot Mountain transaction and the further signing of a Variation Agreement enabling Power Metal to secure early clearance of the tail benefit.
Our ongoing technical work in respect of the Pilot Mountain project has increasingly demonstrated significant upside potential within the existing 2018 Mineral Resource Estimate and we considered there was a reasonable likelihood that the tail benefit would become payable within the 2 year payment period.
The early clearance of the tail benefit also frees Power Metal from any future contractual financial encumbrance in respect of the Project.
The recent classification of tungsten as a critical mineral from the United States Geological Survey, and the lack of primary domestic tungsten production makes the Project in our view highly strategic, both now, and potentially much more so in the future with successful further exploration work which will be undertaken by Golden Metal Resources.'
TRANSACTION INFORMATION
Power Metal subsidiary Golden Metal Resources Limited ('Golden Metal UK') has established a new wholly owned subsidiary Golden Metal Resources Pty Limited ('Golden Metal Australia') which has now completed the 100% acquisition of the Pilot Mountain Project.
Power Metal has paid US$115,000 in cash consideration to Thor Mining and US$1,650,000 of consideration through the issue to Thor Mining of 48,118,920 new Ordinary Shares at an issue price of 2.5 pence per share ('Initial Consideration Shares').
Thor Mining will hold the Initial Consideration Shares in full for a minimum of 6 months after the Option Exercise date and thereafter the Initial Consideration Shares will become freely tradable in 25% instalments (25% tradable 6 months after Option Exercise date, 50% - 9 months after Option Exercise date, 75% - 12 months after Option Exercise date and 100% - 15 months after Option Exercise date.) This trading restriction period may be varied with the written agreement of both parties.
In addition, Power Metal have issued to Thor Mining 12.5 million warrants to subscribe for Ordinary Shares with an exercise price of 4p per Ordinary Share and life to expiry of 3 years from the Option Exercise date ('Initial Consideration Warrants'). Should the volume weighted average price ('VWAP') of Power Metal shares meet or exceed 10 (ten) pence for 5 consecutive trading days Power Metal may serve notice on Thor Mining providing 14 calendar days to exercise and pay for the Initial Consideration Warrants or the Initial Consideration Warrants will be cancelled.
Should Thor Mining exercise the Initial Consideration Warrants above within 12 months from the Option Exercise date, Thor Mining will receive one for one replacement warrants to subscribe for Ordinary Shares at a fixed price of 8p per Ordinary Share, and life to expiry ending 3 years from the date of Option Exercise ('Super Warrants'). Should the Power Metal volume weighted average share price meet or exceed 20p for five consecutive trading days Power Metal may at any time issue Thor Mining with a written notice providing 14 days to exercise and pay for the Super Warrants or the Super Warrant will be cancelled.
All Option Exercise Consideration items outlined above have now been paid or issued in full.
Tail Benefit
Power Metal was to issue Thor Mining with a further US$500,000 of consideration in new Ordinary Shares if Golden Metal UK publishes a JORC or 43-101 compliant resource at Pilot Mountain which increases against current declared levels by 25% across total indicated and inferred categories within two years after the Agreement date. The number of Ordinary Shares to be issued was to be calculated based on the volume weighted average Power Metal share price in the ten trading days immediately preceding the announcement by Golden Metal of the JORC or 43-101 compliant increase.
With the Variation Agreement announced today, the above Tail Benefit is now eliminated.
Additional Terms
Thor Mining and their professional corporate, licensing and geological teams will continue to work with Power Metal and Golden Metal to assist with Pilot Mountain ownership transfer and to manage local corporate & exploration/development operations in the 12 months following the Option Exercise date. Power Metal and Golden Metal will pay for any assistance provided post Transaction on reasonable commercial terms to be agreed.
PILOT MOUNTAIN OWNERSHIP STRUCTURE
Wholly owned1 Power Metal subsidiary Golden Metal Resources UK through its wholly owned subsidiary Golden Metal Resources Australia Pty Ltd., now holds 100% of Black Fire Industrial Minerals Pty Ltd., (Australian private company) which owns 100% of Industrial Minerals (USA) Pty Ltd., (Australian private company) which owns 100% of: BFM Resources Inc., and Pilot Metals Inc., (USA private companies) which own tenements covering the entire Pilot Mountain Project and the 2018 Mineral Resource Estimate.2
Contact:
Paul Johnson
Tel: +44 (0) 7766 465 617
THOR ENERGY PLC 
