Power Metal Resources plc has signed a letter of intent for a binding agreement to earn a 49% stake in the Qatan exploration licence in southern Saudi Arabia.
HABDAH
The deal with Al Masane Al Kobra Mining Company will see Power Metal spend US$3 million on designing, conducting and funding all exploration and resource work.
The company said it had proposed a comprehensive exploration programme for an accredited initial mineral resource estimate for the Habdah prospect within Qatan.
Power Metal will also advance exploration across the 72.247 km² licence to define further potential mineralisation.
The companies plan to agree a formal and legally binding agreement within 90 days of the LoI.
“This is a significant development for Power Metal with a major Saudi Arabian mining company, marking a further milestone in the company’s expansion into the Arabian Shield,” added chief executive Sean Wade.
“We are delighted to have the support of AMAK and enter into this LoI with the hope of commencing work at the Qatan exploration licence in the coming months.”
AMAK has two mines producing copper and zinc concentrates, and gold and silver ore, as well as 21 exploration tenements covering base and precious metals and industrial minerals.
Qatan is located 70km east of the AMAK mines and 32km to the south of the town of Yadamah in the Najran Province.