• Power Metal Resources is investing £3 million as cornerstone investor in Minestarters, a blockchain-based platform using tokenisation to solve early-stage mining exploration funding shortages
• Minestarters will issue 120 million tokens (70 million to public) backed by real-world mining assets, with automated milestone-based funding through smart contracts governing capital deployment
• The platform addresses a critical funding gap in exploration-stage mining, where traditional capital markets have dried up over the past 2-3 years, preventing quality projects from proper development
• Power Metal will own 49% of Minestarters (avoiding reverse takeover triggers), gaining access to larger capital pools while maintaining visibility of investment value through tradable tokens
• Token treasury will deploy capital across a diversified portfolio of early-stage mining projects globally, generating returns through management fees, equity stakes, and royalties

The mining exploration sector faces a persistent challenge: accessing affordable capital at the earliest, riskiest stages of project development. Power Metal Resources, an AIM-listed mining exploration incubator, believes it has found an innovative solution through blockchain technology and tokenisation. In a detailed discussion, CEO Sean Wade and Minestarters founder Marcel Nally outlined their plan to bridge traditional mining finance with decentralised finance markets, potentially unlocking hundreds of millions in capital for exploration projects that currently struggle to secure funding.

The Capital Crisis in Early-Stage Mining

Wade describes the funding environment for early-stage mining as particularly challenging over the past two to three years, characterising it as "a desert" where even "fantastic prospects" that "would have flown off the shelves during COVID" struggled to raise adequate capital. This capital scarcity means companies cannot invest sufficient sums to properly develop resources, with projects requiring significant drilling programs potentially 10,000 meters or more finding markets closed or capital available only at prohibitive costs. Wade explains the practical constraints: 

"We've had projects, fantastic projects where I've been able to spend hundreds of thousands of dollars on drilling and we've made progress... but we haven't been able to get to a resource because we can't afford to do, 10,000 meters of drilling or whatever it takes."

While acknowledging that developers and producers currently enjoy favorable market conditions, Wade emphasises that this prosperity hasn't cascaded down to exploration-stage companies. The fundamental problem remains: a shrinking capital pool targeting the riskiest end of the mining sector, precisely where future discoveries must originate.

The Minestarters Solution: Tokenising Mining Exploration

Marcel Nally brings both geological expertise and blockchain knowledge to address this funding gap. With experience co-founding Moxico Resources and involvement in two previous IPOs, Nally recognised that securing funding for quality early-stage opportunities could take 18-24 months regardless of project merit. His interest in blockchain, dating to 2013 when he began trading Bitcoin, led him to found Minestarters in 2016 as a concept for introducing tokenisation to mining finance.

The platform will issue tokens on a layer-2 blockchain (Ethereum, Solana, or Coinbase's Base platform), with all token sale proceeds flowing into a treasury used exclusively to fund selected mineral exploration projects through a gated investment process managed by an investment committee. Nally describes the rigorous selection process: 

"We will have an investment committee which will be filtering the investment opportunities. So again, we might be turning down 90-95% of projects. People will be applying via our website, via our platform to have their projects funded."

The tokenisation model differs fundamentally from unfunded cryptocurrencies. These are real-world asset tokens backed by actual mining projects, similar to how Bitcoin derives value from scarcity, providing tangible backing that makes them credible investments.

Smart Contracts Transform Project Funding

A key innovation involves using smart contracts to automate and govern the funding relationship between Minestarters and mining companies. Smart contracts will gate funding allocations, with capital released as projects achieve predetermined milestones; if a company fails to reach a milestone, subsequent funding stages won't be released, automating much of the oversight typically requiring manual intervention.

Wade explains the practical benefits of this approach, contrasting it with traditional mining finance where geologists might request additional funds mid-project, citing they "just missed" mineralization targets. 

"What the smart contract does is it bakes it all in at the outset. So we say okay what are we trying to achieve here? How much do you think it's going to cost to get there? What's going to happen when we get there?"

Milestone examples include releasing initial funding upon completion of due diligence, subsequent tranches upon drilling completion or achieving specific grade and width intersections, and additional capital when reaching resource reports. While some milestones can be fully automated using public announcements feeding into smart contracts, certain cases will require manual review to ensure quality control.

Interview with Sean Wade, CEO of Power Metal Resources PLC & Marcel Nally, Founder of Minstarters

Token Structure Creates Tradable Value

Minestarters plans to mint 120 million tokens with no additional issuance, creating scarcity similar to Bitcoin's fixed supply. The platform will issue 70 million tokens to the public in tranches at increasing values, with the first 20 million released at $0.10 per token in a pre-ITO (initial token offering) raising $2 million, with tokens expected to increase in value through market demand and marketing efforts.

The remaining tokens stay in the Minestarters treasury, providing a quantifiable asset base. Wade emphasises this creates visible, tradable value: 

"It'll be quite easy to do that because it'll be very visible. It's 24/7 traded. The price of the mine starter token will be on the screen and you can say, this is the size of the treasury... Therefore, by extension, power metal has x millions worth of value in this thing.”

Revenue generation follows multiple streams: management fees of approximately 5% on deployed funding, equity stakes in funded companies that become tradable as businesses grow, 1-1.5% net smelter royalties if companies reach production, and potential streaming arrangements for minor metals.

Token holders can earn returns by staking tokens for 3-6-9-12 month periods, receiving 5-10-15% interest paid in Minestarters tokens or convertible to dollars. Additionally, as projects crystallise value and exit (through IPOs or sales), Minestarters will burn tokens, reducing supply and theoretically increasing remaining token values.

Power Metal's Strategic Investment

Power Metal's investment structure reflects both opportunity and regulatory constraints. The company commits £1 million initially and up to £3 million total, securing 35% initially and ultimately 49% of Minestarters, with the phased structure designed to avoid triggering AIM's class test thresholds that would classify the transaction as a reverse takeover. Wade explains the regulatory limitation: 

"The point at which we would go into majority ownership would almost certainly trigger a breach of the class tests... that would be a reverse takeover in contemplation which is something that as everybody knows the AIM authorities are very against."

For Power Metal, the investment offers several strategic advantages beyond financial returns. First, it provides access to significantly larger capital pools than the company could independently deploy. Second, it creates immediately visible, liquid value on the balance sheet through tradable tokens, contrasting sharply with traditional exploration investments that remain illiquid and difficult to value for years. Wade notes the visibility problem with conventional mining investments: 

"I could tomorrow spend £3 million pounds on an asset in Canada... Nothing's going on my balance sheet that's visible to a shareholder for 3 years plus... that investment which I'm making on your behalf is highly illiquid, incredibly hard to value, very long duration, enormously high risk."

The partnership also creates operational synergies. Power Metal brings expertise in taking projects to IPO demonstrated through successful listings of Guardian Metal Resources and First Development Resources providing an exit pathway for Minestarters-funded projects. Wade will sit on the Minestarters board, actively participating in asset selection and capital deployment while protecting Power Metal's interests.

Market Positioning Through Innovation

Minestarters positions itself as solving a market inefficiency that traditional finance hasn't adequately addressed. Nally characterises mining finance as "still trapped in the 20th century" being "slow, illiquid and dependent on insider networks," with Minestarters aiming to democratise access through global, liquid token markets.

The portfolio approach provides risk mitigation. Rather than concentrating capital in single projects, the platform can onboard multiple projects simultaneously, taking a diversified portfolio approach that insulates overall returns from individual project failures.

Nally acknowledges the exploration risk profile, accepting potential 50-70% failure rates, but notes that successful projects delivering 4-100x returns will more than compensate for losses, reflecting the industry's historical risk-reward dynamics.

The platform also plans future token variants targeting specific interests: gold tokens covering only gold projects, regional tokens for Latin America or Africa, or commodity-specific tokens for lithium, allowing investors to align token purchases with their particular market views.

Regulatory Framework Ensures Compliance

Token issuance will occur from British Virgin Islands jurisdiction, chosen for faster regulatory approval of utility tokens. A separate Dubai entity will handle administration, with both jurisdictions providing regulatory oversight, anti-money laundering compliance, and know-your-customer requirements.

Security represents a critical consideration. Independent blockchain auditors including firms like CertiK or Hacken will analyse smart contracts for security vulnerabilities, logic errors, and compliance with token standards like ERC-20, producing publicly available audit reports confirming proper functionality without backdoors or exploitation risks.

The platform architecture prioritises two major budget allocations: proprietary platform security and marketing to achieve token liquidity. Nally emphasises these as the wisest uses of Power Metal's invested capital.

Timeline for Market Entry

Minestarters targets aggressive deployment timelines: token launch before year-end with tradability established, pre-ITO token round in coming weeks, and by first quarter 2026, initial letters of intent with mining companies and completion of the public token issuance round across three planned issuances.

Power Metal's milestone gates for stage two funding require demonstrating a minimum viable audited token and onboarding a certain number of projects via letters of intent. Wade expresses confidence these milestones won't require excessive time given existing project interest and platform development progress.

The go-to-market strategy acknowledges two distinct audiences: traditional mining investors who need education about tokenisation and blockchain-native younger investors already comfortable with crypto wallets and digital assets. Nally notes that while older mining finance professionals may be unfamiliar with crypto, younger generationss often already have token wallets, mine crypto, trade crypto, and even create their own cryptocurrencies.

The Investment Thesis for Power Metal Resources

• Access to Larger Capital Pools: Minestarters provides Power Metal indirect access to hundreds of millions in potential capital through global token markets, far exceeding what the company could independently deploy, enabling participation in higher-quality, larger-scale projects
• Portfolio Diversification: Rather than concentrating limited capital in 2-3 projects, the partnership enables involvement in dozens of exploration opportunities simultaneously, spreading risk while maintaining upside exposure to potential 4-100x returns
• Visible, Liquid Value Creation: Token holdings create immediately quantifiable, 24/7 tradable balance sheet value, contrasting with traditional exploration investments that remain illiquid and difficult to value for years before crystallization events
• Operational Synergies: Power Metal's proven IPO expertise (Guardian Metal, First Development Resources) provides natural exit pathways for Minestarters-funded projects, creating a virtuous cycle between funding, development, and value crystallization
• First-Mover Advantage: Minestarters represents first-mover positioning in tokenised mining exploration finance, a sector intersection with significant growth potential as blockchain adoption accelerates in traditional asset classes
• Smart Contract Efficiency: Automated milestone-based funding reduces capital leakage and human error in project financing, potentially improving capital efficiency by 30-40% compared to traditional exploration funding models
• Multiple Revenue Streams: Returns accrue through management fees, equity stakes, royalties, and streaming arrangements, plus potential token value appreciation and token burning mechanisms that increase scarcity
• Regulatory Structure Preservation: 49% ownership stake maintains AIM listing compliance while providing substantial exposure to Minestarters' growth, with optionality for increased ownership pending regulatory changes

Macro Thematic Analysis: 

The convergence of blockchain tokenization with critical minerals exploration addresses a structural market failure at a critical juncture. As Wade observes, there exists "a critical shortfall of funding even in a bullish environment for our end of the sector" to discover the copper, lithium, and rare earths the energy transition demands. Traditional mining finance, as Nally notes, remains "trapped in the 20th century, slow, illiquid and dependent on insider networks." Tokenisation offers 24/7 global liquidity, fractional ownership, and transparent on-chain settlement, democratising access to an asset class historically available only to specialised investors. With real-world asset tokenisation experiencing explosive growth and major institutions like BlackRock forecasting significant market expansion, the timing aligns with urgent exploration needs. Wade's assessment captures the opportunity: 

"We need to be at the forefront of this and we can deploy that capital into good projects and make those returns."

TL;DR: 

Power Metal Resources is investing £3 million for 49% of Minestarters, a blockchain platform tokenising early-stage mining exploration finance to unlock global capital pools for projects struggling with traditional funding shortages. The platform uses smart contracts to automate milestone-based funding across diversified project portfolios, generating returns through fees, equity, and royalties while providing Power Metal immediately visible, tradable balance sheet value. First-mover positioning in tokenised mining finance, combined with operational synergies in project incubation and IPO execution, creates multiple value drivers as blockchain adoption accelerates in traditional asset classes during a critical minerals supercycle.

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