Power Metal (AIM:POW) First Development Resources – Selta Project Update

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, provides an update to shareholders in respect of the Selta Project (“Selta” or the “Project”).

Selta is 100% owned by Power Metal’s 82.78% owned subsidiary First Development Resources Limited (“FDR”).

FDR is planning to list on the London capital markets in Q3 2022 (the “IPO”) and is focussed on district-scale exploration opportunities in Australia.

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

“Some 70km south-east of the Selta Project lies Nolans Bore, a significant rare-earth element deposit held by ASX listed Arafura Resources Limited. We secured the Selta Project with a view, in part, to investigating the rare-earth element potential of Selta and its considerable 1,575km2 licence footprint.

It’s too early to be definitive, though our findings on rare-earth element prospectivity have been encouraging, and today have moved forward considerably.

This is exciting for us as we make plans to demonstrate the potential of Selta through disciplined and intensive exploration. The work we outline below demonstrates the importance of extremely valuable desktop work where, for very little cost, creative explorers can often access the findings of work undertaken and funded by others historically.”

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

“Our work has identified compositionally similar granites over both the Nolan’s Bore deposit and the Selta Project. The stream sediment sample results we have outlined below, and which cover the southern target in the map provided, are extremely high which could mean the granites over Selta are also enriched in rare-earth elements.

We are continuing to build our information database, and to date the in-country team and our technical advisors in the UK have been doing some incredible work that we believe has added considerable value to the Selta Project.”

BACKGROUND

Prospectivity for Uranium and Rare Earth Elements Confirmed Previously

The recently completed in-depth review (the “Review”) of all publicly available geological, geophysical and geochemical data for the Selta Project in Australia’s Northern Territory originally identified four uranium (“U”) and three rare-earth element (“REE”) targets within the Selta Project area, as well as the potential for lithium, gold and base-metal mineralisation.

The 16 March 2022 announcement in respect of this in-depth review may be viewed below through the following link:

https://www.londonstockexchange.com/news-article/POW/selta-project-multiple-target-areas-identified/15371081

New and Refined Prospectivity for REE’s Through Follow-on Work

Further desktop work has since been completed and an additional data set has been identified which has enabled FDR to: 1) delineate an additional REE target; 2) materially increase the prospectivity of the original three REE target areas; and 3) further refine the location and shape of the original three REE target areas at Selta.

The targets delineated are shown in the map linked below on the Company’s website:

https://www.powermetalresources.com/fdr-crossland-data/

NEW HIGHLIGHTS

· Historical stream sediment sample results within the Selta Project area collected by Crossland Uranium1 between 2014-2016 has enabled FDR’s geology team to delineate an additional REE target area at Selta – resulting in four prime target areas for REEs that materially boost the overall exploration potential.

· The Crossland data set includes several high-magnitude REE-in-steam results from all target areas, which has not only increased the overall prospectivity of the four targets but allowed FDR to further refine the shape and location of said targets.

· The Crossland data set combined with the previously completed Selta desktop review will enable a focussed approach to the next phase of exploration which will comprise a site visit to reconcile observations with historical data and identify preliminary targets for further investigation.

CROSSLAND URANIUM STREAM SEDIMENT DATA

Overall, the FDR geology team analysed two separate datasets of Crossland stream sediment samples which included 103 stream sediment samples in total within the Selta Project which were analysed for 15 (out of 17) REEs including: cerium (Ce), dysprosium (Dy), erbium (Er), europium (EU), gadolinium (Gd), holmium (Ho), lanthanum (La), lutetium (Lu), neodymium (Nd), praseodymium (Pr), samarium (Sm). terbium (Tb), thulium (Tm), yttrium (Y) and ytterbium (Yb). Sample analysis was completed by Genalysis Laboratory Services. The total of these 15 rare-earth element assays combined is referred to as the Total Rare-Earth Element (“TREE”). The results are summarised below:

Twelve samples were found to be highly anomalous (> 3800 ppm TREE – >90th percentile) for TREEs, of which eight samples were found to be extremely anomalous for TREEs (>7,000 ppm). Of the twelve highly anomalous samples, seven were also found to be anomalous for neodymium (>2217 ppm Nd) and praseodymium (>557 ppm Pr). These results illustrate significant local elevations of critical REEs.

Other elements of note that returned anomalous results include:

· 5 samples had anomalous Zirconium >7,440 ppm with a peak result in one sample of 20,892 ppm .

· 8 samples had anomalous Thorium >1,215 ppm with a peak result in one sample of 3,213 ppm.

· 9 samples had anomalous Uranium >118 ppm with a peak result in one sample of 136 ppm.

· 6 samples had anomalous Tungsten >62 ppm with a peak result in one sample of 189 ppm.

· 4 samples had anomalous Phosphorus (> 1,100 ppm), up to 6,500 ppm in one sample.

Note: Lithium was not assayed for in the stream sediment samples .

These results, combined with the high TREE values listed above – including one sample of up to 16,743 ppm (1.6% TREE) – are suggestive of potentially strong bedrock REE mineralisation upstream of the sample sites.

SELTA PROJECT- PROXIMAL TO WORLD-CLASS REE DEPOSIT

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

The Nolans Bore REE-phosphate-uranium-thorium deposit is one of the largest of its kind globally 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 (P2O5).2

Commercial production at the Nolans Bore REE deposit is targeted for late 2024, with the Feasibility Study considering a 4,440 tonne per annum Nd-Pr oxide producing open pit mining operation with a 38 year mine-life and an NPV8% of US$1.011B.3

Arafura Resources was recently awarded a grant for up to AU$30 million to contribute to the construction of their rare earths separation facility which is expected to cost in the region of AU$90.8 million. The grant was allocated from the Federal Government’s AU$1.3 billion Modern Manufacturing Initiative which has been established with the aim of developing Australia as a regional resources technology and critical minerals processing hub within 10 years.4

Arafura Resources recently announced it has signed a non-binding memorandum of understanding (MoU) with one of the world’s most progressive automotive groups, South-Korean based Hyundai Motor Company. The MoU provides a framework for the parties to negotiate a binding offtake agreement for the supply of up to approximately 1,000 – 1,500 tonnes per annum of Nd-Pr Oxide from the Nolans Project to commence in 2025 for a seven year term on a cost, insurance and freight basis.5

The underlying geology within the Selta Project is interpreted by FDR’s geological team to be comparable to the Nolans Bore deposit. Notably, REE and uranium mineralisation at Nolan’s Bore is hosted within G6 granites which are postulated to be compositionally similar to the G5 granite prevalent across the Selta Project. Furthermore, preliminary statistical analysis was carried out on the Crossland stream samples, and a strong statistical correlation was noted between REEs, uranium, thorium and phosphorous within the dataset. This relationship suggests pegmatite hosted REE mineralisation may be the source of the stream sediment anomalies.

FDR EXPLORATION INTERESTS

FDR Australia holds the following exploration licence interests:

Wallal Project (Wallal Main-E45/5816 – 390km 2 – granted), (Wallal West 1-E45/5853 96km 2 – granted) and (Wallal West 2 – E45/5880 – 86km 2 – granted).

A comprehensive geophysical review has identified three magnetic bullseye anomalies located under Phanerozoic sedimentary cover which are interpreted to have possible geological similarities major Au-Cu deposits within the Paterson Province including Winu (Rio Tinto) and Havieron (Newcrest Mining-Greatland Gold joint venture).

Braeside West Project (E45/5854 – 137km 2 – one granted licence)

In-depth desktop analysis of historic exploration data is currently underway on the Braeside West Project. A recent base-metal discovery by neighbouring company Rumble Resources Ltd (ASX:RTR) has enhanced the overall prospectively within the Braeside West Project area as it is hosted within a similar geological environment to that of Rumble Resources discovery.

Ripon Hills Project (E45/5088 – 42km 2 – one granted licence).

The Ripon Hills Project is prospective for base-metal and gold mineralisation associated with deep-seated north-south oriented fault structures which run through the Ripon Hills Project area. In-depth desktop analysis of historic exploration data is currently underway over the project.

Selta Project (EL 32737, EL 32738, EL 32755 – 1,575km2-three granted licences)

The Selta Project is located in an area considered to be highly-prospective for uranium and rare earth element mineralisation. FDR recently completed an in-depth review of all geological, geophysical and geochemical data which also identified the potential for lithium, gold and base-metal mineralisation as well as the possibility of tin-tantalum-tungsten rich pegmatites.

The data disclosed in this announcement is derived from historical reports and historical sampling results. FDR has not undertaken any independent investigation of the sampling nor has it independently analysed the results of the historical exploration work in order to verify the results. FDR considers these historical sample results relevant as it will use this data as a guide to plan future exploration programmes. FRD’s future exploration work will include verification of the data through further analysis.

REFERENCES

1) Crossland Nickel Pty Ltd – Report Number CR2016-0105. Available at: https://geoscience.nt.gov.au/gemis/ntgsjspui/simple-search?location=1%2F3&query=%22CR2016-0105%22&rpp=10&sort_by=score&order=desc

2) Mineral Resources for the Nolans Bore Deposit as of June 2017 using a 1% TREO cut-off grade. Available at: Arafura – Nolans (arultd.com)

3) Arafura Resources Limited 2015 & 2017 Annual Reports. Available at:

https://www.arultd.com/investor/asx-announcements-2021/asx-archive.html

4) Arafura Resources Awarded AU$30M in new initiative funding. Available at: Arafura Resources Awarded A$30M In New Initiative Funding (theassay.com)

5) Arafura Resources Limited ASX Announcement available at: Arafura and Hyundai motor Company sign non-binding MOU for neodymium and praseodymium offtake (asx.com.au)

GLOSSARY

Stream Sediment Sample – a sample collected from concentrated material within the bed of a stream, a widely used technique in early stage exploration.

Total Rare Earth Element (TREE) – The abundance of the fifteen lanthanides (Lanthanum, Cerium, Praseodymium, Neodymium, Promethium, Samarium, Europium, Gadolinium, Terbium, Dysprosium, Holmium, Erbium, Thulium, Ytterbium, Lutetium) plus Scandium and Yttrium. These elements are vital components for modern electronical and battery technology.

IPO AND LISTING PROCESS

FDR is seeking a listing on the London capital markets and is working with advisors in this regard and is targeting a listing on the London capital markets in Q3 2022.

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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