Gold Exploration Update - Victoria Goldfields

RNS Number : 1524I

Power Metal Resources PLC

12 April 2022

 

12 April 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Gold Exploration Update - Victoria Goldfields

Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces an update in relation to the ongoing exploration programme being carried out by joint-venture subsidiary New Ballarat Gold Corporation plc ("NBGC") focused in the Victorian Goldfields of Australia.

NBGC is a joint-venture held between Power Metal (49.9%) and its partner, London-listed Red Rock Resources plc (50.1%).  NBGC has a 100% interest in Red Rock Australasia Pty Ltd ("RRAL").

RRAL Exploration Director Mr David Holden commented:  

"After drilling a combined 860m at the O'Loughlin's and Mt Bute prospects, drilling has now paused in order to allow for the receipt of outstanding assays results - the results of which will allow for further geological interpretations to be made prior to additional drill targeting. At the O'Loughlin's prospect have already encountered high-grade gold from the initial assays we have received - with assays from an additional three holes still pending.

At the Mt Bute prospect the anomalous molybdenum (Mo) and bismuth (Bi) results initially identified by XRF test work suggests the possibility of an intrusive-related component to mineralisation.  We believe this implies the potential for larger and deeper gold-molybdenum-tungsten targets at Mt Bute - which has been substantiated by rock chips sampled here that returned notable gold results.

As we plan for a listing of the Victorian Goldfields interests, these initial drilling results combined with the progress of the important Daylesford exploration license towards grant, are important steps that will enable us to list NBGC with immediately prospective projects that possess the potential grade and scale that we seek."

Highlights:

· First phase of diamond drilling at Mt Linton and O'Loughlin's prospects now complete. 

· Initial results received confirm that two gold-bearing lode structures have been intersected at the O'Loughlin's Prospect, including 0.4 m at 12.34 g/t Au from 75.7m downhole, and 0.5m at 1.44 g/t Au from 50.6m downhole from hole OL21D002.  (Note - As further explained below: Due to low core recovery across select areas, up to several meters or core across the main mineralised zones were not recovered. The core that was captured and available to be sampled is thought to be highly under-representative of the nature and width extent of the mineralized zone.)

· To date, the O'Loughlin's Prospect extends for over 2km along strike with a width of ~500m; a size comparable to the nearby Ballarat Gold Mine.  

· Investigation of structural and geological complexities from recent core drilling underway, with additional drilling at the O'Loughlin's Prospect planned following completion of the analysis.

· Preliminary X-Ray Fluorescence (XRF) analysis of Mt Bute drill core returned anomalous Molybdenum (Mo) and Bismuth (Bi) which suggest that models incorporating new concepts for larger targets of intrusive related gold ("IRG") mineralization may be more applicable to the Victorian gold deposits than first thought. 

· Extensive soil sampling campaign planned over the remaining granted tenures throughout NBGC's landholding within the Victorian Goldfields - with the goal of identifying additional target zones.

· The Daylesford exploration licence application (EL7330) covering the historical Ajax mine is a step closer to grant, having successfully passed through the objection phase and native title assessment. 

Drilling Overview - O'Loughlin's

NBGC has now completed diamond drilling at two of its advanced prospects including Mt Bute and O'Loughlin's, which are located approximately 30km and 20km from the town of Ballarat respectively. The intention of the drilling was to allow for detailed geological investigation of various mineralised structures seen within historical narrow workings which are otherwise not visible at surface. At both prospects, mineralised quartz reef structures were successfully intersected.

Whilst assays for the first two holes at the O'Loughlin's Prospects have been received, the remainder are due back before the end of Q2 2022.  Laboratory delays have been experienced due to a high demand for analytical work across the region coupled with staff shortages due to the COVID pandemic. This has resulted in excessive wait times for the sample assays.

Drilling Summary (to date):

HOLEID	No of samples	Total Depth(m)	Azimuth	dip	Easting(m)	Northing(m)	Elevation(m)	Lab status
OL21D001	79	80.2	280	-70	755592	5819620	352.8	returned
OL21D002	112	88.7	278	-85	755593	5819620	352.8	returned
OL22D001	88	122.1	88	-74	755539	5819638	354	In progress
OL22D002	77	143.5	71	-60	755539	5819638	354	In progress
OL22D003	34	91.5	300	-65	755623	5819692	349	In progress
MB22D001	149	119.2	284	-55	723996	5821769	389	In progress
MB22D002	187	119.3	300	-55	723996	5821769	389	In progress
MB22D003	150	101.5	265	-55	723996	5821769	389	In progress

Note datum is MGA2020 Zone 54 and azimuth is magnetic north

Drilling Results (to date):

HOLEID	FROM	TO	ASSAY NOTES*
OL21D001	30.55m	31.00m	0.45m@0.38g/t  core loss 31.0m - 31.8m (0.8m)
OL21D002	50.65m	52.00m	1.35m@0.62g/t incl.  0.5m@1.44g/t  core loss 52.0m - 53.1m (1.1m)
OL21D002	70.40m	70.80m	0.4m@0.21g/t.  core loss 70.8m - 75.7m (4.9m)
OL21D002	75.70m	76.10m	0.4m@12.32 g/t

*All intervals are presented as apparent widths as measured in the drill core.  Where possible, core has been oriented using Boart Longyear TruShot TM V7R7 downhole orientation tool.

All HQ diameter diamond drilling was completed by Trimac Drilling out of Buninyong, Victoria.  Assaying was competed on half-core samples which were selected based on geological observations made by on-site geological staff.

All half-core samples were sent to MinAnalytical Laboratory Services Australia located in Western Australia.  Gold assays were determined using photon assay within drillhole OL22D001, and traditional fire-assay for the remaining holes. NBGC has also requested a 34-element suite assay be completed on all samples utilising a four-acid digest with an ICP-OES finish which will give further insights into the geochemical signature of the mineralised zones intersected.

Comparison of gold results determined using photon assay vs fire assay will be completed once all assays have been received. Standards were submitted at a rate of 1 in approximately 30 samples and duplicate assaying via an alternate laboratory will be done on selected samples once initial assays are returned to further assist in the QA/QC validation process.

Given the soft nature of the shale/slate/sandstone wall rock, in contrast to the hard quartz comprising the veins within the main mineralized lodes at the O'Loughlin's Prospect, core recovery has been low; and across select areas up to several meters of the main mineralised zone were not recovered. The core that was captured and available to be sampled is thought to be highly underrepresenting the nature and width extent of the mineralized zone. A link to core photos highlighting the core loss through select mineralised zones can be viewed at the link below.

  https://www.powermetalresources.com/wp-content/uploads/2022/04/22-04-08-O-Loughlins-Prospect-Select-Core-Photo.pdf

Assays from drillhole OL21D002 confirm that coarse nuggety gold is present and good continuity of mineralisation within the structure is present.  Discussions with drilling contractors as to more suitable methods to increase core recovery are in progress prior to the commencement of any further drilling.

Mt Bute Prospect

At Mt Bute, a similar genesis model to the O'Loughlin's Prospect was originally targeted, however preliminary XRF results of selected core intervals returned highly anomalous molybdenum and bismuth results. The XRF results are subject to assay confirmation however this suggests a possible relationship to the nearby Mt Bute I-type granite and opens the possibility for additional types of mineralisation at the prospect. This includes intrusion related mineralisation which may be of a more recent age than previously thought. 

Considering the differing geological model now postulated, NBGC is undergoing further investigations before additional drilling, as the recent results demonstrate the possibility that a more substantial target may be present at depth. These include additional mineralogical studies, as well as reinvestigation of induced polarisation (IP), aeromagnetic and gravity data over Mt Bute.

O'Loughlin's Prospect

Drilling at the O'Loughlin's Prospect is targeting 'Ballarat-style' gold hosted quartz veins hosted within high-angle shear zones. The north-south oriented zone encountered in the drilling completed there to date has similarities to mineralised structures observed underground at the nearby Ballarat Gold Mine. Once all assays are received, NBGC will undertake further geological interpretations integrating the assay results and geological core observations, with the intention of identifying further structurally hosted targets at the prospect.

Daylesford Exploration Licence Application (Ajax Mine) - EL7330

NBGC recently received confirmation that the exploration licence application has progressed through the native title assessment and is back to Earth Resource Regulation Licensing for final approval. It is expected that this licence will progress by mid-2022. The progress so far does not guarantee that NBGC will be granted the license, which remains a decision for the regulator acting in accordance with the relevant legislation.  The Ajax mine is on the western margin of the extensive Daylesford gold camp and falls within exploration licence application EL7330.

The Ajax mine comprises numerous shafts and workings found over a strike of several kms, which was historically mined to over 400m vertically. Historical production continued up in to the 1930's producing over 300,000 ounces Au at an average grade of approximately 12-15 g/t Au.  The down dip and along strike extensions to the main ore zones remains untested.  Minor diamond drilling completed in the 1990s intersected multiple lode structures with results up to 5.3m of 15.2g/t Au, demonstrating the continuity in lode structure and associated gold grades.  The mine shaft itself has been backfilled and is currently not accessible.

Further information in respect of the Ajax mine may be viewed the project report available on the Power Metal website through the following link:

https://www.powermetalresources.com/wp-content/uploads/2020/10/2020-09-16-4499-EL007330-Daylesford.pdf

Work is currently under way to digitise the old workings, stope and geology into a 3D computer model, in advance of a planned diamond drilling campaign which is expected to commence following grant of the license application. 

New Ballarat Gold Corporation Overview

NBGC holds a strong land position comprising eleven (11) granted exploration licences for a total area of 1,501 km² within the gold fields of Victoria, Australia, principally around the mining centre of Ballarat.

Eight (8) licences covering 827 km² await grant. The company has carefully assembled its portfolio of properties comprising a broad range from robust exploration targets to near term resource potential, all of which remain largely undeveloped by modern explorers.

With the first tenements granted only in 2021, NBGC has already conducted detailed exploration of its initial targets, including a diamond drill test of two prospects starting in December 2021.

520m of drilling has been carried out at O'Loughlin's and 340m has been carried out at Mt Bute, with samples sent to MinAnalytical Laboratory Services in Perth, WA, for laboratory assay testing.

Granted Licences

The eleven (11) granted licences cover high priority areas covering 1,501 km² as outlined below.

Licence Number	Project Name	Area (km2)
EL007271	Buninyong (renamed)	133
EL007281	Blue Chip	74
EL007282	Blue Sky	489
EL007285	Blue Ribbon	8
EL007327	Dereel	60
EL007385	Sardinia	4
EL007329	Kilmore	484
EL007301	Pitfield/Mt Bute	85
EL007328	Blue Yonder (Announced today)	164
State land within EL007271 EL007505	-	[9]
State land within EL007271 EL007506	-	[9]
Total (Excluding State land above including in EL007271)		c 1,501

Licence Applications

RRAL has applications in process for eight other new gold exploration licence areas covering approximately 827km² in the Victoria Goldfields of Australia including:

License Application Number	Project Name	Area (km2)
EL007294	Red Queen	129
EL007330	Daylesford (renamed)	202
EL007460	Kilmore West	325
State land within EL007271 EL007507		[8]
EL007540* (3 competing applications)	Outer Ballarat	142
EL007756	Monmouth	22
EL007799	Dereel (2)	3
EL007826	Ballarat East	4
Total (Excluding State land above including in EL007271)		c 827

* Balmaine Gold Pty Ltd, Mercator Gold Australia Pty Ltd, and Loddon Gold Pty Ltd have put in competing applications the same day as RRAL for the ground covered by EL007540. The application considered to have greatest merit will eventually be given priority.

The following applications have been made in Western Australia.

EL45/5859	Paterson	227
EL45/5885	Pilbara/Paterson	70

COMPETENT PERSON STATEMENT

The technical information relating to exploration in this report is compiled by David Holden, BSc, MBA, MEM, who is a member of the Australian Institute of Geoscientists and a director of NBGC, and  the Exploration Director of RRAL. He is a member of a recognized professional organization and has sufficient relevant experience to qualify as a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies published by AIM. Mr Holden consents to the inclusion of the information in the form and context in which it appears.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc
Paul Johnson (Chief Executive Officer)	[phone]
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat	[phone]
SI Capital Limited (Joint Broker)
Nick Emerson	[phone]
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson	[phone]

NOTES TO EDITORS

Power Metal Resources plc - Background

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration company which finances and manages global resource projects and is seeking large scale metal discoveries.

The Company has a principal focus on opportunities offering district scale potential across a global portfolio including precious, base and strategic metal exploration in North America, Africa and Australia.

Project interests range from early-stage greenfield exploration to later-stage prospects currently subject to drill programmes.

Power Metal will develop projects internally or through strategic joint ventures until a project becomes ready for disposal through outright sale or separate listing on a recognised stock exchange thereby crystallising the value generated from our internal exploration and development work.

Value generated through disposals will be deployed internally to drive the Company's growth or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.

Power Metal Exploration Programmes Underway/Results Awaited

Power Metal has exploration programmes completed or underway, with results awaited, as outlined below:

Project	Location	POW %	Work Completed or Underway	Results Awaited
Alamo Gold Project	USA	Earn-in to 75%	Excavation of multiple test pits and mapping & sampling.	Field and assay results from on-site work programme.
Athabasca Uranium	Canada	100%	Data compilation across uranium properties	Define next steps of exploration.
Authier North Lithium	Canada	Earn-in to 100%	Soil & rock sampling completed	Technical Review of exploration results & define next exploration steps.
Ditau Project	Botswana	50%	Drill programme focused on key targets notably drilling of potential carbonatites and targeting rare-earth elements.	Field updates and receipt & review of laboratory assay results.
Kalahari Copper Belt	Botswana	50%	Exploration programme underway across the South Ghanzi Project and further exploration at the more recently acquired South Ghanzi Extension and Mamuno licence areas	Field programme findings and defined drill targets for near term drilling.
Molopo Farms	Botswana	53%	Review of recent exploration findings.	Determine next exploration steps and action plan.
Haneti Project	Tanzania	35%	Diamond drill programme completed	Receipt & review of laboratory assay results.
Victoria Goldfields	Australia	49.9%	Diamond drill programme Phase I complete	Receipt & review of laboratory assay results and target investigation for next phase of drilling.
Paterson Projects	Australia	83.33%	Preparations advanced for Heritage Clearance Survey at Wallal Project underway. (For Phase I drill programme.) Review of historical data and target generation for Ripon Hills & Braeside West projects.	Findings from multiple work programmes including final approvals and preparations for planned deep diamond drilling.

 

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