Power Metal (AIM: POW) Selta Project Update

Selta Rare Earth Element and Uranium Project – Project Update

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces an update in respect of the Selta Project (“Selta” or the “Project”) prospective for Rare Earth Element (“REE”) and Uranium (“U”) mineralisation located in the Northern Territory, Australia.

A map showing the location of the Selta Project may be viewed through the following link:

https://www.powermetalresources.com/selta-project-overview-map-2/

HIGHLIGHTS

– URE Metals Pty Limited (“URE”) has received notification from the Northern Territory Government’s Delegate for the Minister for Mining and Industry of their intention to imminently grant all Selta Project Mineral Exploration Licences EL 32737, EL 32738 and EL 32755 (see below for further information).

– First Development Resources Limited (“FDR”) have commenced an in-depth review of all available geological, geophysical and geochemical data associated with the Selta Project and adjacent ground. The objective of the review is to identify priority targets for further investigation.

Paul Johnson Chief Executive Officer of Power Metal Resources plc commented:

“The profile of REE and uranium exploration has increased significantly of late as the demand for critical minerals to support technological advancements in electric vehicle and alternative energy sources continues to grow.

Power Metal acquired the Selta Project to secure a strategic positioning in this highly prospective REE and uranium area in the Northern Territory of Australia. As you will see below, this acquisition looks very much to be in the right place and timely.”

Tristan Pottas Chief Executive Officer of First Development Resources Ltd commented:

“In parallel with the finalisation of the licence grant process we have now initiated an in-depth review of all relevant historical data associated with the Selta Project and the region as a whole, with the aim of identifying prospective areas of interest for further investigation.

The central Northern Territory region remains of particular interest to explorers looking to capitalise on the increase in global demand for REEs and uranium as evidenced by our listed neighbours MegaWatt Lithium and Battery Metals Corp (CSE:MEGA); who recently announced they were set to commence exploration at their nearby properties1. We look forward to updating the market on the findings of our in-depth data review as the study progresses.”

BACKGROUND

Selta is held within URE Metals Pty Limited, an Australian private company and wholly owned subsidiary of First Development Resources Limited which is planning to list on the London capital markets in Q2 2022. Power Metal currently holds a 96.15% interest in FDR.

URE was acquired by FDR in a transaction managed and funded by Power Metal and the announcement dated 19 November 2021 in respect of this transaction may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/uranium-rare-earths-acquisition-australia/15219001

LICENCE GRANT PROCESS

URE has received notification from the Delegate of the Minister for Mining and Industry, as provided by section 78(2) of the Mineral Titles Act 2010 of their intention to grant Mineral Exploration Licences EL 32737, EL 32738 and EL32755 which together make up the Selta Rare Earth Element and Uranium Project in the Northern Territory, Australia.

The grant will be effective from the date of payment of the rent for the first operational year which totals AU$19,190. Arrangements have been made for immediate payment and FDR expects to receive final grant notification in the coming days.

FDR through URE has commenced an in-depth review of all historical geological, geophysical and geochemical data associated with the Selta Project. The objective of the review is to identify targets for follow up investigation.

SELTA PROJECT IN-DEPTH DATA REVIEW

FDR have partnered with Mr Matthew Stephens of Luksam Consultants based in Queensland, Australia, to complete an in-depth review of all historical geological, geophysical and geochemical data associated with the Selta Project and the Central Northern Territory region as a whole.

Mr Stephens, who is a Fellow of the Australian Institute of Geoscientists (FAIG), has over 35 years of continuous industry experience which has included sound exposure to pre-feasibility, feasibility and due diligence studies as well as geotechnical Reviews, independent geologist reports, National I 43-101 reports and tenement appraisals.

In addition to compiling a review of all historical data, the desktop study will provide a comprehensive appraisal of the regional setting of Selta Project access, infrastructure and a prioritised list of exploration target areas.

SELTA PROJECT – BACKGROUND

The Selta Project, considered to be prospective for uranium and rare-earth elements, is located in Australia’s Northern Territory within the prospective but largely under-explored central Aileron Province, between the Georgia and Ngalia Basins, in a region the Northern Territory Government has declared prospective for uranium mineralisation.

The Project comprises three exploration licence applications covering a total land area of 1,574.92 km 2 including EL 32737 – 780.85km 2 , EL 32738 – 312.17 km 2 and EL 32755 – 481.90 km 2 .

The Northern Territory hosts some of Australia’s best known and high-grade uranium deposits and has a long history of uranium mining. In addition, the Aileron Province is a major exploration target for base metals including nickel (“Ni”) and copper (“Cu”), REEs and orogenic gold (“Au”) with numerous companies actively exploring within the region.

The Selta Project borders Prodigy Gold NL (ASX:PRX), IGO Ltd (ASX:IGO) and Canadian listed Megawatt Lithium and Battery Metals Corp (CSE:MEGA) (“Megawatt”); and is less than 70 km northwest of Arafura Resources’ (ASX:ARU) high-grade, world-class Nolans Bore REE deposit.

The Nolans Bore REE-phosphate-uranium-thorium deposit is one of the largest deposits of its kind in the world with a JORC (2012) compliant Mineral Resource of 56 million tonnes at an average grade of 2.6% total rare-earth oxides and 11% phosphate (P 2 O 5 ). Commercial production is targeted for late 2024, with the Feasibility Study considering a 4,440 tonne per annum neodymium (“Nd”) – praseodymium (“Pr”) oxide producing open pit mining operation with a 38 year mine-life and an NPV 8% of US$1.011B. 2

The Selta Project’s southern claim boundary abuts the Megawatt landholding. Promising surface samples collected within the Megawatt property coupled with a known radiometric trend is currently postulated by the Company to link the Megawatt property with Arafura’s ground to the south-east.

MegaWatt recently announced exploration for REEs and uranium was set to commence at their adjacent Arctic Fox Project, located immediately south of Selta, and their Isbjorn Project also within the Central Northern Territory region.

The Selta Project area is currently located along strike to the northwest of the radiometric trend and future work will seek to extend that trend within the Selta Project. The underlying geology within the Selta Project is interpreted by the Company to be comparable to the Nolans Bore deposit with REE and U mineralisation at Nolans Bore being hosted within G6 granites which are postulated by the Company to be compositionally similar to the G5 granite prevalent across the Selta Project.

Notably, within 5km of the Selta Project’s eastern boundary are three REE occurrences with results up to 543ppm Nd and 148ppm praeseodymium hosted within the G5 granite. Selta’s exploration potential has been enhanced by encouraging historical surface sampling results3 of up to 3.8 ppm U in soil samples, 27.2 ppm U in stream sediment samples and up to 244 ppm U in rock chip samples, all of which led to a study by The Australian Mineral Development Laboratories 3 stating:

“…the amount of uranium moved by solution or erosion is large enough for there to be several potentially economic orebodies.”

In addition to uranium the Company believe that the Selta project has significant potential for Cu, Au and silver (Ag) mineralisation.

Prodigy Gold’s Reynold Range Gold Copper Project, which borders the Selta Project’s lease area, has delivered encouraging results across four prospects for Cu, Au and Ag with reverse circulation drilling intercepts yielding 29m @ 2.32g/t Au (Falchion Prospect) and 17m @ 3.93g/t Au (Sabre Prospect) and surface samples of up to 7.5g/t Au, 783g/t Ag and 19.3% Cu (Scimitar Prospect) and 0.55g/t Au, 271g/t Ag and 20.3% Cu at the Reward Prospect. 4

REFERENCES

1. Megawatt Exploration for REEs & Uranium within Central Northern Territory Properties Set to Commence and Marketing Agreement. Available at Megawatt Lithium and Battery Metals Exploration for REEs & Uranium within Central Northern Territory Properties Set to Commence … – MegaWatt (megawattmetals.com)

2. Arafura Resources Limited Annual General Meeting Presentation, 21/10/2021. Available at : https://wcsecure.weblink.com.au/pdf/ARU/02438942.pdf

3. The Australia Mineral Development Laboratories (CR 74/19) Sixth Progress Report MP 4976/73 Geochemical Survey, Arunta Area Amdel (December 1973)

4. PRX ASX Release – 20 May 2021. Available at: https://wcsecure.weblink.com.au/pdf/PRX/02376469.pdf

COMPETENT PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules – Note for Mining and Oil & Gas Companies. Mr O’Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617


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