FULL DISCLOSURE: The Deep Dive is long the equity of Power Nickel.
Power Metallic Mines (TSXV: PNPN) has signed a strategic alliance and joint venture framework agreement with Amaar United Mining Company, extending the explorer’s reach into Saudi Arabia’s increasingly competitive mining sector.
The agreement sets up a 50/50 partnership to chase future Saudi mining license auction rounds, with Power Metallic bringing the technical and geological work and Amaar Mining, an affiliate of diversified investment group Amaar Holding, handling local coordination, relationship management, and regulatory interface within the Kingdom.
On the financial side, the structure is front loaded to the benefit of Power Metallic. For the first US$10 million of approved post award work program funding, Power Metallic will contribute US$2.5 million while Amaar Mining puts up US$7.5 million. Ownership and economics remain split evenly throughout, despite the uneven cheque sizes. After that initial tranche is exhausted, all further approved funding moves to a straight 50/50 split between the parties.
Any licenses won under the framework are expected to be advanced through a joint venture structure, with Power Metallic acting as technical lead and proposed operator. Amaar Mining’s remit covers bid preparation support, administrative work, and the local strategic positioning needed to navigate the Kingdom’s licensing process.
The deal builds on Power Metallic’s earlier award of the Jabal Baudan exploration license in the Jabal Sayid Mineralized Belt, a more than 200 square kilometre property in a district recognized for volcanogenic massive sulphide style copper, gold, and zinc mineralization. That license gave the company its initial foothold in the country.
“This agreement is an important step in Power Metallic’s strategy to build a durable Saudi Arabia exploration platform,” commented CEO Terry Lynch. “Our award of the Jabal Baudan license demonstrated that Power Metallic can compete successfully in one of the world’s most important emerging mining jurisdictions. This partnership with Amaar Mining gives us a strong local partner and a clear framework to pursue additional high-quality license opportunities in future auction rounds, while preserving 50/50 economics and maintaining disciplined capital exposure.”
Power Metallic last traded at $1.45 on the TSX Venture.
FULL DISCLOSURE: Canacom Group, the parent company of The Deep Dive is long the equity of Power Nickel. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
