Power Metal Resources exercises option to buy McKellar gold exploration property

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Power Metal Resources PLC (LON:POW) announced that it has exercised its option to acquire the McKellar Property in Ontario, Canada.

McKellar is one of four gold exploration properties upon which the metals exploration and development company has an exclusive option to acquire a 100% interest.

READ: Power Metal Resources proposes process to enable potential dividend payments

The AIM-listed firm conducted due diligence and said the property covers the underexplored core of a geologically prospective regional scale anticlinal fold hinge structure.

It includes several Versatile Time Domain Electromagnetic geophysics anomalies identified by survey work in 2007, though they have either not yet been drill tested or were inconclusively drilled by shallow holes or trenched by previous claim holders.

The most recent work within the property was undertaken in 2017, this included soil sampling, outcrop sampling and geological mapping.

Preliminary exploration work is expected to include both remote sensing data interpretation and ground-based fieldwork with systematic soil sampling and geophysics expected to yield defined targets for future drill testing, the firm said.

Power Metal will pay a total of CAD$100,000 (£56,530), half in cash and the other half in shares to the vendors, a consortium led by local prospector Brian Fowler.

The Vendors retain a 2% net smelter royalty, of which Power Metal may purchase 1% o at any time, by making a cash payment of CAD$500,000 (£282,670).

“Exercising the option over the McKellar Property strengthens Power Metals’ landholding over a part of Ontario which is currently seeing heightened junior exploration company activity,” said Paul Johnson, chief executive of Power Metal, in a release.

“Our due diligence data review has shown McKellar complements Power Metal’s existing Dotted East, Olga Lake and Roger Lake Projects, notably adding ground with indications of VMS style mineralisation sited in association in a structurally prospective fold-hinge setting.”

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