Power Metal (AIM:POW) Results for the Year Ended 30 September 2021

Audited Financial Results for the Year Ended 30 September 2021

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces its consolidated audited results for the year ended 30 September 2021, for the Company and its subsidiaries (together the “Group”).

Highlights from the year under review:

Operational

· After an extensive preparatory period drilling commenced in October 2020 at the Molopo Farms Complex Project (“MFC Project”) in Botswana, where the Company funded US$500,000 of exploration costs to earn-in to a 40% direct project interest. Results were released during the course of the year with potentially significant nickel sulphides identified from the three hole drill programme and the company completed its earn-in during April 2021, securing a direct 40% interest in the MFC Project.

· In January 2021 an option was secured over exploration interests in the Paterson Region of Western Australia and during 2021 various amendments were made to this original option culminating in the acquisition of a 5 licence exploration package covering 751km2 post-year end. Work undertaken during the year demonstrated the presence of magnetic bullseye anomalies demonstrating geological and geophysical similarities to the Havieron deposit discovered by Greatland Gold plc.

· January 2021 saw option agreements signed over exploration project interests in the Hemlo Schreiber region in Ontario Canada, with options crystallised in the year and it was then announced in September 2021 that the entire interests in the Hemlo Screiber region were sold to First Class Metals Limited (“FCM”) for £1 million through the issue to wholly owned subsidiary Power Metal Canada Inc of 333,334 FCM shares at £3 per share. FCM is seeking a listing on the London capital markets.

· The Company saw its 49.9% owned joint venture in the Victoria Goldfields see its first licence applications granted and the launch of inaugural ground exploration in February 2021, with various updates released during the year confirming additional licence grants and gold exploration progress.

· In March 2021 the Company confirmed the acceleration of its earn-in to a 30% holding in the Silver Peak silver project in British Columbia, Canada, and in July 2021 diamond drilling commenced which would ultimately lead to the discovery of further bonanza grade silver, with significant copper, lead and antimony credits.

· Also in March 2021, the company announced a business update from its 50% owned joint venture with Kavango Resources plc in the Kalahari Copper Belt (“KCB”), Botswana that saw the signing of conditional acquisition agreements to acquire 8 new KCB licences and increasing the joint arrangement’s KCB ground footprint to 4,255km2. The acquisitions were completed in August 2021 and saw all KCB interests transferred to a new 50% joint operating company Kanye Resources Pty Ltd.

· In May 2021 the Company secured an option agreement over two gold – nickel prospecting licences in Botswana, and after due diligence exercised the option in July 2021. Accelerated exploration led to the discovery of multiple kilometre-scale gold, nickel and arsenic anomalies announced in July, ultimately leading into a post-year end reverse circulation drill programme. Following option exercise the two licences underlying the properties (the “Tati Project”) were successfully transferred post-year end into a new 100% Power Metal owned Botswana holding company, Tati Greenstone Resources Pty Ltd.

· June 2021 saw the Company sign an Assignment and Assumption Agreement to acquire a right to earn into a 100% interest in the Golconda Summit Gold Property in Nevada USA, marking the Company’s first project in Nevada.

· Also in June 2021 acquisitions in Nevada continued with the acquisition of a 100% interest in the Stonewall and Garfield exploration projects from fellow AIM listed Sunrise Resources plc.

· July 2021 saw the identification of rare earth element drill targets at the Ditau Camp project in Botswana, also held in the 50% owned joint venture with Kavango Resources plc, Kanye Resources Pty Ltd.

· The Company signed an agreement in July 2021 through which it may acquire a 100% interest in the Authier North lithium exploration property in Quebec, Canada, situated adjacent to Sayona Mining’s (ASX:SYA) Authier lithium project.

· In September 2021 the Company launched a uranium staking programme in the Athabasca area of Saskatchewan, Canada which ultimately saw c.412km2 of ground staked, allocated into 7 project packages.

Financial

· Loss for the year to 30 September 2021 of £622k (2020: £1.4 million);

· Pre non-controlling interest total equity of £6.3 million at the year-end (2020: £2.7 million); and

· Raised £3.6 million in cash during the year from the exercise of Power Metal share warrants, including by directors.

Post-year end

In November 2021, Power Metal raised over £1,050,000 gross proceeds through a placing of 60,000,000 new ordinary shares of 0.1 pence each, at an issue price of 1.75 pence per share. In conjunction with the placing, each new ordinary shareholder receives an attaching warrant, to subscribe for a further new ordinary share of 0.1 pence each, at an exercise price of 3.5 pence each, expiring after two years.

Following the end of this reporting period, to the date of signing, the Company has received funds of £593,481 in relation to warrant and option exercises, issuing a total of 74,192,876 new ordinary shares.

Drilling programme commencement at Tati project in Botswana was announced October 2021 with completion by the calendar year end and results dispatched to Intertek in Australia for assay testing.

New copper anomalies identified at the Garfield project in Nevada USA, with additional claims staked to cover the ground footprint over the identified anomalies, as announced in October 2021.

In October 2021, it was announced that the final licence application was granted at the Wallal project, leading to the Company signing a revised agreement to acquire 100% of First Development Resources Australia Pty, via its subsidiary First Development Resources Ltd. The transaction consideration was funded through the issue of 13,333,333 Power Metal new ordinary shares at an issue price of 2.75 pence each and 13,333,333 warrants over Power Metal shares at an exercise price of 4.5 pence per ordinary share. Additional consideration of 10,000,000 Power Metal shares at an issue price of 3.2 pence and 10,000,000 warrants over Power Metal shares with an exercise price of 5.0 pence per ordinary share will be settled by Power Metal for all other Australia licences with interests held by First Development Resources Pty Ltd, owned by third parties to be transferred to First Development Resources Pty Ltd.

Approval of the Environmental Management Plan was secured in October 2021 for the Kalahari Copper Belt and Ditau Camp projects licence areas held in the Kanye Resources joint venture with Kavango Resources plc clearing the last key administrative step prior to drilling key targets at the project areas.

In October 2021, Power Metal Resources Australia Pty Ltd, a subsidiary of the Company, submitted two licence applications in South Australia covering 1,994km2 targeting Olympic Dam style mineralisation.

On 29 October 2021, the Group concluded the 100% share capital purchase of First Development Resources Pty Ltd (‘FDR Australia’) for total consideration of £749,743, consisting of £36,200 cash (AUD$66,000), 13,333,333 new ordinary shares in the Company at a share price of 2.75 pence, 10,000,000 new ordinary shares at a share price of 3.2 pence, and warrants with a total fair value of £26,876. FDR Australia holds exploration interests in the Paterson region of Western Australia and work in 2021 identified three magnetic bullseye targets hosted within the Wallal Project. The acquisition meets the definition of a business combination and will be accounted for using the acquisition accounting method in accordance with the Group’s accounting policies.

Details of the fair value of identifiable assets and liabilities acquired, purchase consideration and goodwill are as follows:

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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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