Can you introduce our audience to Power Metal Resources?

Power Metal Resources PLC (AIM:POW) is an exploration company listed on the London Stock Exchange, operating under the mining exploration incubator model. With a current market cap of around £18 million, we focus on early-stage exploration in tier-one jurisdictions, including North America, Australia, Saudi Arabia and Africa.

Our business model centers on acquiring stakes in promising assets and improving their value through geophysical surveys, soil sampling, exploration drilling, and other early-stage exploration activities. Once these assets reach a certain maturity, we aim for a ‘crystallization event’, which could involve an IPO, as we did with Guardian Metal Resources, joint ventures like the recent partnership with UCAM for uranium projects, or asset disposal, such as the sale of our stake in Kavango Resources.

What strategy is Power Metal following for its projects in Saudi Arabia?

We have been exploring the Arabian Shield through our subsidiary Power Arabia, covering both Saudi Arabia and Oman. So far, we have made progress by securing some promising deals, and we are optimistic about bringing them to fruition soon. Our strategy involves partnering with existing license holders to help them advance their projects, which differs from applying for licenses independently, which is a bit more complex. For example, spending US$3 million on exploration over the next two years at AMAK’s Qatan project will grant us a 49% stake. Now, if there is a significant breakthrough in the project’s commercial viability, we can buy out the remaining stake. This scenario represents the ‘crystallization event’ mentioned earlier. Additionally, we have the Balthaga lithium project managed through RIWAQ, an Australian subsidiary of EV Metals. In this case, we are looking at an investment of up to US$500,000 across 15 licenses, which will secure us a 30% stake in the entire license area. This presents a significant opportunity for our shareholders to benefit from potential discoveries without fully funding the project.

Power Metal signed a Memorandum of Understanding (MoU) with Saudi’s Ministry of Investment. What are the benefits and a key challenge of mining in KSA?

The MoU we signed with the Saudi Ministry of Investment during the 2024 Future Minerals Forum has proven to be a critical step. We have received outstanding support from the government, which has facilitated key introductions and helped us navigate local processes efficiently. Strong government relations are crucial in any country, but they are significant in KSA, given the focus on Vision 2030, with mining positioned as the third pillar of the economy.

KSA offers an incredible opportunity for foreign investment, especially in mining, where openness to external partnerships has grown exponentially. While Ma’aden has historically dominated the sector, the Kingdom is trying to diversify to attract new investors. The FMF has evolved from a modest event to one of the world’s premier go-mining events.

KSA’s experience in managing oil and gas operations provides a solid foundation for navigating the complexities of mining, having mastered the balance between domestic interests and foreign investments. While financing options are improving, there is still room for growth, such as the potential establishment of a junior stock exchange. Currently, listing on the Saudi exchange poses challenges for junior explorers due to requirements like three years of profitability, which is often not feasible for asset-focused companies like ours.

Do you have a final message for investors interested in Power Metal?

Investors considering Power Metal Resources PLC will notice our proven track record of delivering value. For example, our 45% stake in Guardian Metal Resources, which holds the largest undeveloped tungsten resource in the USA, showcases the success of our IPO strategy. The UCAM deal further highlights our ability to crystallize value and attract significant investment, leading to commercial discoveries that appeal to investors.

We are now applying this model in Saudi Arabia and Oman, where our track record has already opened up exciting new opportunities. Securing financing for Power Arabia will likely bring additional positive news and results, significantly enhancing shareholder value. Although recent market conditions have been challenging, we are trading at a substantial discount compared to our intrinsic value. As UK market conditions improve, Power Metal presents a compelling, diversified investment in tier-one geographies focused on critical metals essential for the energy transition.