Power Metal (AIM:POW) Haneti Project, Tanzania – Exploration Update

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces results from the Company’s inaugural diamond drilling programme on the nickel-copper-cobalt-platinum group element Haneti Project (“Haneti” or the “Project”) and the new Babayu Lithium Prospect (“Babayu”), both located in central Tanzania.

The Haneti Project is held in Joint Venture (“JV”) with Power Metal holding a 35% Project interest and JV partner and London listed Katoro Gold (LON:KAT) holding a 65% interest.

In tandem with the early 2022 diamond drilling campaign at Haneti, a prospecting and rock sampling programme was completed at the Babayu Lithium Prospect located approximately 40km southwest of Haneti and included in the same project JV. Both work programmes were completed by in-country geological consulting teams managed by the operator Katoro Gold. The Haneti drilling and Babayu prospecting results were received around the same time and are both presented herein.

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

“The Joint Venture has now completed its first diamond drill programme at Haneti, a district scale exploration opportunity in Tanzania.

Drilling has confirmed the presence of nickel albeit not as yet in economically significant intersections. However with the information from the programme we can now undertake more advanced targeting for next stage exploration. We are targeting the discovery of economic nickel with the work programme going forward.

The completion of this programme also enables the JV to re-engage with potential project partners to discuss the findings and next steps in further detail.

The work undertaken was extended to include an assessment of lithium prospectivity which was perhaps less of a focus in the past. The results of this work have confirmed significant lithium potential and the JV is now implementing a lithium consolidation strategy to build our interests in this area.

At this important time in the advancement of Haneti, Power Metal is working with our JV partners Katoro Gold to undertake expedited work programmes and move the Haneti project forward.”

PROGRAMME HIGHLIGHTS

Haneti Nickel

· All drill holes intersected significant sequences of altered ultramafic and mafic rocks, representing the first ever fresh rock drill core samples extracted from the Project.

· Integration of thin section petrographic analyses with bulk rock geochemical results across multiple intersected lithological units suggest that the platinum-group element (“PGE”) potential at Haneti is limited to serpentinite units, and that nickel and copper mineralisation should preferentially be targeted within the intrusive gabbro units.

· Whilst the drilling results showed anomalous results for nickel (Ni), copper (Cu), gold (Au) and PGE that are subject to further interpretation, economically significant intersections of these metals were not encountered in the drilling.

Babayu Lithium

· Rock sampling results from the Babayu Lithium Prospect highlight significant lithium and tantalum potential with lithium-caesium-tantalum (Ta) (“LCT”) pegmatite mineralisation outlined over a 600m strike-length. The chip sample results (up to >10,000ppm Li and 2,680ppm Ta) and strike length combined with the perceived shallow dip of the main pegmatite body show the potential for a significant near-surface mineralised body that warrants further assessment and evaluation.

· Licence applications have been made in respect of the lithium prospective areas and the JV is currently implementing a lithium consolidation strategy including existing lithium applications and reviewing potential partnerships with local licence holders.

ADDITIONAL HANETI DRILL PROGRAMME INFORMATION

Historical geophysical and geochemical sampling programmes completed prior to the 2022 drilling campaign were successful in identifying at least three high-priority drilling targets at Haneti. As no fresh rock samples had ever been obtained from the Project, the decision was made to drill these targets. The main programme goal was to extract fresh rocks to obtain a better understanding of the subsurface geology as well as to intersect Ni-Cu sulphide mineralisation.

The 2022 diamond core drilling programme was completed successfully with a total of 900 m drilled. This included three drill holes which were targeting previously outlined mafic-ultramafic Ni- Cu-PGE sulphide targets at the Mihanza and Mwaka Hill prospects (on PL no. 11797/2022). The three holes completed are outlined and summarised below:

· Mwaka Hill Prospect: Hole MWDD01 was drilled to 245.8m down hole depth at an inclination of -63 ° and MWDD02 to 224.0m at a -64° inclination. The two holes intersected significant thicknesses of altered ultramafic rocks (serpentinite) and mafic rocks (gabbro). Hole MWDD01 gave the highest Ni intersection of 2.00 m @ 0.45% from 81.5m downhole. In MWDD02 two wider intersections were encountered with 4.0m @ 0.38% Ni from 151.4m and 4.0m @ 0.35% Ni from 159.4m. All elevated Ni results were found exclusively within serpentinite.

· Mihanza Hill Prospect: Hole MHDD01 at the was drilled to 430.2m at a -64° inclination. The hole intersected similar rock types as at the Mwaka Hill prospect but contained no significant Ni intersections but did contain anomalous PGE, Au and Cu results including: 2.0m of 0.08g/t platinum (Pt) + palladium (Pd) from 241.3m; 2.0m of 0.21g/t Au from 392.4m; and 2.0m @ 0.11 % Cu from 236.2m.

Haneti 2022 Drill Programme Collar Table

The drilling field work phase was followed by laboratory analyses, performed at SGS’s laboratory located in Mwanza, Tanzania with samples also then transferred to SGS South Africa to mitigate certain operational difficulties at SGS Tanzania. This re-routing of samples and the additional work required in respect of the lithium prospectivity added some additional time to the return of completed findings to the operational team.

Following receipt and analysis of the assay results Haneti personnel prepared a comprehensive report, a summary of which is included below:

Thin Section Petrography, Bulk Rock Geochemistry and Lithological Associations:

An analysis of the thin section petrography, bulk rock geochemistry and geochemical and lithological associations of the drill core was performed by independent geologist Dr Martin Klaussen of the University of Stellenbosch.

· All three drill holes intersected one or more serpentinised ultramafic units of uncertain origin and a gabbroic intrusion.

· Drill holes MWDD01 and MWDD02 intersected the same stratigraphic sequence. These two drill holes orthogonally tested approximately 420m of the litho-structural inventory of the Mwaka Hill prospect.

· Drill hole MHDD01 intersected massive serpentinites from the start to the end of hole, with the serpentinite being texturally and chemically like the serpentinites encountered in MWDD01 and MWDD02.

· No disseminated or massive magmatic sulphide mineralisation (e.g. visible pyrrhotite, pentlandite, chalcopyrite, bornite, etc.) was encountered visually or geochemically in any of the three drill holes.

Babayu Lithium Prospectivity:

A reconnaissance site visit was completed in order to investigate historical reports of potentially significant pegmatite-hosted lithium mineralisation located near to the rural settlement of Babayu, Dodoma District. One pegmatite at the Babayu Prospect was investigated during this site visit. Some general observations were made during this visit.

The main pegmatite referred to above was traced for a strike length of approximately 600m. Along its strike length outcrop is sporadic and in no instances could its hanging wall and footwall contacts be ascertained with high confidence; however, its true width likely ranges between 1m – >7m, which is considered by the Company to be potentially significant. The pegmatite strikes west-northwest to east-southeast and is shallowly northeast-southwest dipping (20 – 30°) – it is gently folded and appears to be slightly sheared.

Five chip samples were collected over the main pegmatite to confirm lithium mineralisation. Based on the analytical results several relevant observations were made:

· Strong lithium mineralisation is present, most likely in the form of lepidolite/spodumene mineralisation, with two of the five rock samples returning >10,000ppm Li.

· The tantalum (Ta) values in two samples (2,608ppm and 1,354ppm) are exceptionally high, considering that a value of around 250ppm would be of economic interest.

· The Ta:Nb (niobium) ratio is favourable with Ta being much more abundant, representing the more valuable member of the two.

Based on the results, it is suggested that the Babayu lithium prospect should be further followed up on and the consistency of the high concentrations of tantalum and lithium should be evaluated further.

Haneti Drilling Programme Conclusions:

· The Haneti Project is associated with very-high, regional, background Ni values that are associated with various mafic-ultramafic lithologies. Most of the identified historical Ni-in-soil anomalies at Haneti, including those identified over the Mwaka and Mihanza Hill prospects, are likely being related to sub-economic Ni-laterite that developed over nickel-olivine rich serpentinites.

· The lack of distinct Cu and PGE anomalism in association with nickel suggests that high nickel values are primarily associated with the weathering of nickel silicates (particularly altered olivine). Therefore, any future target should be defined not only based on a discrete nickel anomalism but also by elevated Cu, PGE, and Cr values.

· Drilling confirmed that the serpentinites are highly magnet, which could have influenced results obtained from historical electromagnetic and magnetic geophysics surveys.

· The detailed work done by Dr Martin Klaussen of the University of Stellenbosch, suggests that the serpentinites are likely of ophiolitic origin, whilst the gabbros represent a younger, possibly layered mafic intrusion. In such a geological setting, the PGE potential is limited to the serpentinites, and Ni-Cu mineralisation should be preferentially targeted within the intrusive gabbros and possibly associated structures.

· The gabbros might be structurally controlled, possibly of pan-African age, which can be a positive aspect regarding associated Ni-Cu mineralisation.

Next Steps

Haneti Nickel

A desktop review of all historical exploration data is being undertaken. The review will take into account the knowledge gained from the 2022 Haneti diamond drilling campaign (the first ever completed on the Project). The results are intended to further improve and refine targeting for future exploration programmes on the Project.

Just prior to Covid-19 restrictions a number of companies expressed an interest in Haneti and a key requirement of their due diligence work was access to diamond drill core for analysis. With that drill core now in hand the JV will be engaging again with potential project partners.

Babayu Lithium

Additional liaison with the Tanzanian government regarding the lithium licence applications within the broader Babayu area. Further regional desktop studies focusing on the lithium potential of the broader Dodoma area are to be conducted with the aim of identifying further prospective target areas for staking and other potential opportunities for further investment.

GLOSSARY

Serpentinite: A metamorphic rock mostly composed of one or more of the serpentine group minerals that include antigorite, lizardite, and chrysotile. They are typically fascinating shades of green and are usually layered and banded.

Gabbro: A coarse-grained, dark-coloured, intrusive igneous rock. It is usually black or dark green in colour and composed mainly of the minerals plagioclase and augite.

Ophiolite: Ophiolites are suites of temporally and spatially associated ultramafic, mafic, and felsic rocks that are interpreted to be remnants of ancient oceanic crust and upper mantle.

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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