Do you like free money?

Here's some free money.

Good Morning Team.

A quick one today because this has been an exhausting week.

I have a question for you.

Do you like free money?

After some time in the NASDAQ majors world, I have a small-cap stock for you.

This is a company I have talked about several times over the past couple of years. I remain convinced that it’s going to fly in the near term, and that my patience will be handsomely rewarded.

I am talking, of course, about Power Metal Resources (LON:POW).

Here are the facts:

Power Metal sports a market capitalisation of circa £14 million on a share price of around 12p. This about 1p cheaper than when I called the low - but the turnaround is now coming.

I have authored FCA-registered research notes on the company in the past - alongside seriously in depth work elsewhere.

But the idea is to bring the Power story to a new class of investor on here.

So here’s the basics:

Power Metal key assets

£7 million in hard cash in the bank, generated from selling roughly half of its GMET shares to Bacon and Leslie owned ACAM.

24,699,825 ordinary shares representing 19.46% of Guardian Metal Resources - this spin-off controls two significant tungsten deposits in the US. These shares as of today are worth £10.25 million.

A joint venture with ACAM worth up to £15.2 million (excluding the additional £7 million of exploration representing ACAM’s 70% of the JV) in an upside scenario in the Athabasca. This is the world’s No1 uranium address and POW holds the largest land package in the area for a London-listed company. It’s a minimum of £9.2 million in balance sheet value.

Then there’s multiple deals signed in Saudi Arabia and an IPO to come from that quarter. GMET launched at 8.5p per share at a £7.16 million market capitalisation. Assuming the parent retains 50% of Power Arabia, and the company is targeting a circa £7 million valuation, then you can probably assign at least £3.5 million to the current value.

A second IPO, First Development Resources. This has been in the pipeline for some time, but now is the time to strike given its flagship Wallal Project, which sports bullseye ready-to-drill targets similar to Greatland Gold’s Havieron discovery. Again this IPO should be worth at least £3.5 million to the company when launched. Given GGP’s meteoric rise, the interest is most certainly there.

The gigantic 1,723 square kilometre Molopo project in Botswana - one of the most stable jurisdictions in Africa. This is worth perhaps £3 million at present based on reported balance sheet value and a nearby Rio Tinto acquisition.

POW also enjoys several other smaller interests including a share option agreement over the Tati gold project in Botswana, GSA Environmental ownership, ION Battery Resources - a lithium starter but the company waits for this metal to recover - and the testicles of Red Rock Resources (LON:RR) from which it is owed a significant sum.

Power Metal backers

Power is run by CEO Sean Wade, who has bought £25,0000 of shares out of his own pocket at this price point back in November. The CEO does not engage much with the market, but he does get shit done - and holds 0.81%.

Purebond owns 4.52%. You know who they are.

Rick Rule’s Term Oil owns 4.07%. You know who he is.

A strategic Saudi Arabian investor also came in at the last fundraising - it’s worth noting that every placing for years now has been at a premium.

And the company is cash rich so there is no need to go to London anytime soon - unlike hundreds of others.

To be honest, I think Sean is done with that.

The bottom line

Millions of pounds of capital is going into the ground at the Athabasca courtesy of ACAM - who rarely lose. Two IPOs are soon to be launched. POW’s shareholding in GMET is only becoming more valuable - it realised some of the gain at a near 1,000% return in two years - but the US is now desperate to kick off its own domestic tungsten mining having aggravated…

well, everybody.

The key point though is that the company’s balance sheet is worth at least £36.45 million.

The market capitalisation is £14 million.

It’s free money.

Of course, it’s still small caps.

But you are not going to wake up to a horror discount. Only competent corporate progress - and when drilling starts, excitement.

Which will translate to a re-rate.