Following activities to strengthen its balance sheet and raise financing, Aim-listed Power Metal Resources says it is now in a position to move forward more aggressively.

As at July 10, the company’s assets amounted to £3-million.

Power Metal is striving to build a diversified exploration business, backed by a strong balance sheet, to drive the company towards self-financing its activities and breaking the dependency that most juniors have on market financings.

The company currently has five main projects and two additional projects in the later stage of due diligence and under commercial discussion.

Power Metal CEO Paul Johnson says that, even if the company only makes one major discovery at one of its projects, it can create significant value for shareholders.

For the remainder of this year, Power Metal plans to undertake drilling at the Molopo Farms Complex, in Botswana, where the company paid $500 000 to earn-in a 50.96% stake. This project targets major nickel, copper and platinum group metals (PGMs) mineralisation.

Additionally, the company has drilling plans in development to target major nickel, copper and PGM targets at the Haneti polymetallic project, in Tanzania, where Power Metal can earn-in up to a 35% interest.

Should all go well with 11 licence grants in Australia’s Victoria goldfields, Power Metal plans to undertake exploration drilling in priority areas of the licences.

Meanwhile, the company intends on building its balance sheet working capital in three ways. These are to adopt a dual approach of taking a position in project holding companies alongside direct project participation.

“The aim is that successful project development will drive the value of the ultimate holding company in which Power Metal has a stake, driving the value for our investment in that company higher,” Johnson explains.

Additionally, the company will build its working capital by monetisation of existing project interests. Following acquisitions of projects, Power Metal intends to move each one forward corporately and technically.

Certain interests may be vended to third parties or into new listings, in exchange for cash, equity and other forms of consideration which will build the company’s working capital.

Lastly, Power Metal believes there are opportunities for significant capital returns generated from investment in junior resource equity or related financial instruments, especially during the current global circumstances.

To this end, Power Metal has created an internal fund for making investments in junior resource sector opportunities, which will be referred to as the company’s “junior resource fund”.

As a vast majority of Power Metal’s working capital is deployed to operating projects and associated investment in project holding companies, only a small amount of initial capital has been allocated for the fund, less than 5%, or £75 000, of the company’s current working capital.