LONDON (ShareCast) - (Sharecast News) - Power Metal Resources announced the signing of a non-binding heads of terms agreement with Alara Resources and Awtad Copper on Wednesday, to acquire a 12.5% stake in the Block 8 copper concession in Oman.

The AIM-traded firm said that under the proposed agreement, Power Metal would invest up to $0.74m to earn its stake.

It said Block 8 is located in the Hazm area of northwestern Oman, describing it as a key project for Awtad Copper, a private company established by the Al Maawali Family, and in which Alara holds a 10% interest.

Alara Resources, an Australian-based mining and exploration company, is focused on projects in the Middle East, with its flagship being the Al Wash-hi - Majaza Copper-Gold Project in Oman.

The company said it was also exploring opportunities for copper, zinc, silver, and gold across Oman and Saudi Arabia.

It said the parties were aiming to finalise a legally-binding agreement within 15 days of signing the non-binding heads of terms.

While it remained a preliminary agreement, Power Metal said it was optimistic that discussions would lead to a finalised deal.

"I am delighted to be sharing this news for Power Metal in the Arabian Shield, expanding the Power Arabia portfolio into Oman," said chief executive officer Sean Wade.

"I am hopeful that the prospective nature of Block 8, identified in historic workstreams, will be further proven once exploration works get underway, following consultation with Awtad and Alara.

"This deal showcases our intent to deliver value from a diverse portfolio and I look forward to providing shareholders with updates from the proposed agreement."

At 1305 BST, shares in Power Metal Resources were up 3.03% at 17p.

Reporting by Josh White for Sharecast.com.

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