Power Metal Resources, a mining company, is significantly exposed to two commodities that have recently been strong performers in the market: uranium and gold. Its gold assets, spread across the USA, southern Africa, and Australia, are held directly or through various affiliated entities.
As 2023 turns into 2024, and with uranium prices stabilizing above US$80 per pound, Power Metal's direct holdings in uranium are likely to see changes. The company holds a significant land area, over a thousand square kilometres, near Canada's Athabasca Basin, a prime uranium source in the Western world.
While Kazakhstan plays a significant role in setting uranium prices, the Athabasca region, some areas in sub-Saharan Africa, and the USA are crucial for the Western market. Power Metal's substantial land holdings in such a strategic location position it well, especially when most commodity markets are sluggish.
Power Metal's new uranium-focused subsidiary, UEE, has completed a pre-IPO funding round and plans to list in the New Year. This follows what CEO Sean Wade describes as "an extremely successful exploration season." The company explored nine of its 17 properties during this period, identifying promising exploration targets.
The company's financial strategy has been cautious, avoiding excessive dilution, which is common in junior mining companies. Power Metal's approach includes spinning off promising assets into standalone entities. Earlier in the year, Golden Metal Resources, holding tungsten and gold assets in Nevada, was spun out, significantly increasing the value of Power Metal's remaining stake.
UEE is set to follow Golden Metal Resources' path. Other prospects include First Development Resources, with gold and uranium assets in Australia, and New Ballarat Gold, a joint venture in Australia.
Established assets in safe jurisdictions
Despite the rising prices of gold and uranium, the general market for junior miners has been challenging, with risk capital moving away due to various factors like higher interest rates and the popularity of Bitcoin. Wade acknowledges that the high commodity prices haven't yet translated into higher share prices for miners.
Looking ahead, Wade is optimistic. With its established assets in safe jurisdictions, proven business model, and clear direction, Power Metal Resources is well-positioned for when the market normalizes. The company is actively engaged in discussions for potential partnerships and deals, especially in uranium.
While specifics of any upcoming deals are not yet precise, Wade assures that there will be significant news in the future, indicating exciting developments for Power Metal Resources in the mining sector.
Source: Power Metal/UEE