Power Metal Resources plc has established its seventh spin-out, Power Arabia Ltd, which will focus on the Arabian Gulf.
DISCUSSIONS
The subsidiary is expected to undergo pre-IPO financing to fund activities and listing on the London Stock Exchange.
Power Arabia will also cover any projects outside the region in joint ventures with “entities domiciled within the region”.
Power Metal said that several binding MoUs for potential joint ventures on existing exploration licences were “in the final stage of negotiation”.
If successful, the company aims to begin groundwork during April after Ramadan and Eid al-Fitr in Saudi Arabia.
The establishment of the new subsidiary follows the MoU signed in January with Saudi Arabia’s ministry of investment.
Power Metal is also progressing conversations with investors, from the Gulf and internationally, “who have indicated significant interest in a regionally focused investment vehicle”.
Chief executive Sean Wade added that the company had made several trips to the region, establishing itself as “a credible partner for a number of existing licence holders”.
“It is clear that our successful incubator model has resonated with regional investors and we are intending to shortly complete a financing round for Power Arabia with a view to completing transactions in the region and getting started on meaningful exploration work.
“As has been the case with previous portfolio transactions, POW is expected to retain a significant shareholding in Power Arabia, giving our shareholders substantial upside potential from discoveries, but without diluting their shareholding in POW and asking them to fund all of the exploration costs.”
SPIN-OUTS
The company’s other spin-outs include First Class Metals plc and ION Battery Resources Ltd in Canada; First Development Resources, New Horizon Metals and joint venture New Ballarat Corp in Australia; and Golden Metal Resources plc in the United States.
Power Metal has previously stated it financed and managed global resource projects with the main focus on district-scale opportunities across the world.
Projects can be separately listed or sold with proceeds used to grow the company or returned to shareholders through share buy backs, dividends or in-specie distributions of assets.