It sees Power taking a 49.9% interest in Red Rock Australasia, which as a joint venture vehicle will be renamed. This vehicle has now already applied for exploration license area EL007271, with Power covering the application fees (£1,125).
This asset is being referred to as the ‘Blue Whale’ project. The area spans some 130 square kilometres in the south-western portion of the Victoria Goldfields.
It is located adjacent to the Ballarat gold mine which is owned and operated by Castlemaine Goldfields, a subsidiary of Singapore firm Liongold Corporation.
Ballarat currently produces 40,000 ounces of gold per year, with the mine achieving an average grade of 5.6 grams per tonne, Power noted. The mine has yielded over 13mln ounces to date, whilst the broader area is believed to have produced over 160 tonnes of gold historically, between 1851 and 1917.
In a statement, Paul Johnson, Power Metal chief executive, said: “This strategic move into Australian gold exploration is an important step for POW, complementing our African base metal interests and providing portfolio diversification by commodity and jurisdiction.
“Australian gold exploration and development projects are attracting considerable interest especially in the Victorian goldfields following the remarkable discoveries at depth at the Fosterville mine, where in Q1 2020 Kirkland Lake produced 159,864 oz Au at 42.4g/t.”
“The Blue Whale project is the company's first project in Australia, and opens the door for the potential establishment of an Australian gold portfolio,” he added.
Meanwhile, Red Rock chair Andrew Bell said: “The company's Australian subsidiary Red Rock Australasia Pty Ltd was incorporated in April 2008 and for a number of years conducted active exploration as an incubator of exploration projects.
“In the last two years it has not been active and has held no licenses, although it has reviewed various opportunities.”
He added: “By sharing their energies and the risks and costs of exploration, the partners can maximise their effectiveness without needing to take on additional staff or overhead.”
Bell noted that the Blue Whale project covers an area with a known gold endowment in “the heart of one of the world's most famous gold mining districts”.