Power Minerals Gains After Signing Option To Acquire Rare Earth Project In Brazil

Power Minerals Ltd’s (ASX:PNN) shares have surged after signing an option to acquire the Lĺtio Project in Paraiba state, Brazil.

The project is considered highly prospective for niobium, rare earth elements (REE) and lithium.

Importantly, the acquisition consolidates and reinforces Power’s position as a South American-focused explorer and developer.

Power shares rose 23% to A$0.16 following the announcement, reflecting positive sentiment among investors.

Lĺtio Project

The Lĺtio Project comprises three permits covering a total area of 27 square kilometres.

Power plans to expedite field work programs at Lĺtio to unlock the project’s value in parallel with its core focus to advance the development of its Salta Lithium Project in Argentina.

Nearology play

The Lĺtio Project is located immediately adjacent to, and contiguous to Summit Minerals Ltd’s (ASX:SUM) Equador Niobium Project.

Equador recently returned sampling laboratory results of up to 53.07% niobium, 47.17% tantalum and 2.47% partial rare earth oxides (PREO).

The geology of Summit’s Equador Project is interpreted to continue into the Lĺtio Project, and Power has conducted a reconnaissance site visit to the Lĺtio Project confirming that it shares similar geology.

In addition, the site visit identified outcropping pegmatites at Lĺtio, which it plans to test for lithium mineralisation.

Sought-after location

Power Managing Director Mena Habib said: “This is an exciting acquisition for Power as we expand our footprint and presence in South America.

“Through this acquisition Power will build on the knowledge, expertise and local networks we have developed over the past eight years during our development of the Salta Lithium Project in Argentina.

“Brazil is growing in stature as a sought-after location for minerals exploration and discovery and we are delighted to have secured this project, in an emerging exploration district where ASX-listed Summit Minerals has delivered positive results from its initial field-work.”

Acquisition terms

Power has paid a $30,000 upfront fee for an exclusive option over the Lĺtio Project, and will now undertake a 60-day period of due diligence.

Upon successful due diligence, Power will pay $300,000 in cash and $270,000 in Power shares as consideration for the acquisition.

Next steps

Power’s initial fieldwork programs will be designed to define targets for a maiden drilling program at Lĺtio.

The company has already collected samples with results expected in the coming weeks.

Further sampling is ongoing to identify drilling targets across a wider area of the project.

 

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