Power Metal (POW.L) Molopo Farms Complex – Drilling Progress Update

Botswana Molopo Farms Complex – Drilling Progress Update

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide a drilling update confirming completion of the first hole (KKME 1-14) at the Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key” or “KKME”) Molopo Farms Complex Project (the “Project” or “MFC Project”), which is targeting prospective massive nickel sulphide and platinum-group metal (“PGM”) mineralisation in Botswana.

HIGHLIGHTS

– The first hole (KKME 1-14) of a planned 2,505 metre four-hole programme has been completed successfully and achieved target depth of 520 metres with near 100% core recovery.

– The suite of rocks encountered in KKME 1-14 has successfully confirmed the proposition that the geology at the MFC Project is that of a feeder zone.

– About 167 metres of ultramafic rock, a potential host for PGMs and nickel, has been encountered below an altered contact around 41 metres down hole. Samples to be prepared and assay tested.

– Downhole geophysics to be undertaken at the end of hole to identify and clarify the conductive structures around and below the 520 metre hole depth.

CHIEF EXECUTIVE OFFICER UPDATE

Paul Johnson Chief Executive Officer of Power Metal Resources commented: “I am extremely pleased to report the programme has got off to a great start with successful completion of the first exploration hole KKME 1-14 down to the planned depth of 520m.

For the MFC Project we have successfully and significantly validated the geological proposition that the geology at the Project is that of a feeder zone.

We have some important work to undertake utilising the core from KKME 1-14 which includes field-based core review and sample preparation for assay testing. We are also to undertake downhole geophysics shortly to confirm the conductive structures at depth.

Whilst the analysis of the core and down hole geophysics is being carried out at KKME 1-14, and to keep the programme running efficiently, we will now move the drill rig to the second hole location where drilling is expected to commence imminently. Further details on this to follow shortly.

In summary, we are now full thrust into the MFC Project programme, and are already many steps forward from just a few weeks ago. We have validated the geological model, successfully completed our first drill hole and have core from the 520m hole which we are now examining and will be testing.”

DRILL PROGRAMME FURTHER INFORMATION

· The first drill hole KKME 1-14 at the MFC Project has now attained a target depth of 520m. The hole was completed safely and securely and has achieved near 100% core recovery.

· KKME 1-14 was sited in the Jwaneng-Makopong Shear/Feeder zone to the east of the main Molopo Farms Complex intrusion. (The next two holes are planned to intersect the same zone within the main part of the intrusion.)

· KKME 1-14 has successfully confirmed the geological proposition that the geology at Molopo Farm is that of a feeder zone. In addition, the hole appears to confirm the geophysical modelling, with some precision in the identification of conductors at depth.

· The drill core is now the subject of field-based analysis and after cutting and visual inspection, samples will be prepared for assay testing at an accredited laboratory in South Africa. In addition, thin sections of rock will be taken for petrographic analysis.

· The assay testing will confirm the composition of the drill core and metal content. The petrographic analysis is an in-depth investigation of the chemical and physical features of the rock which will add considerably to our geological understanding of the area.

· The drilling has confirmed the presence of ultramafic rocks of the Molopo Farms Complex along the Jwaneng-Makopong Shear/Feeder zone.

· The outcome of the drilling includes the discovery of a serpentinite intrusion into the Transvaal strata. This intrusion comprises 167 metres of ultramafic serpentinite in the drill core (the planned petrographic and chemical analysis of the core will allow a more exact lithological description).

· The ultramafic serpentinite extended from 41m to 208m (with the top 20m highly weathered) within the drill hole. Serpentinite is a potential host rock for PGMs and nickel and therefore the rock will be subject to assay testing.

· The hole finished after passing through 25m of pyritic and graphitic mudstones from around 480m to 505m which could be the conductor identified from geophysical work or could overlie it.

· The graphitic and iron sulphide mudstones (“Mudstones”) encountered towards the bottom of the hole died out with depth, while the geophysics carried out before drilling indicated an anomaly stronger with depth.

· Moreover, the Mudstones should be a continuous unit (at the base of the Segwagwa Group) and yet the geophysical conductor target appears to be more confined.

· As a result further investigation is required to confirm or eliminate the presence of other conductive structures around or below the end of hole.

· A down-hole geophysical probe is now being deployed into the first hole to gather additional deep-seated data to supplement the surface derived Time Domain Electromagnetic (“EM”) and Natural Field Audio Magneto Telluric (“NF-AMT”) geophysical modelling.

· The down-hole geophysics work will detect any other conductive structures for 300m around and below the drill hole. This will provide detailed and more precise data to help identify the location of any other conductive structures that should be targeted with further drilling.

· Should the geophysical probe results and modelling show the presence of a significant conductor below the current end of hole, we have the option of reinstating the rig to extend or deviate the hole.

· Whilst analysis work is undertaken at KKME 1-14 and to ensure programme continuity we are making preparations to move the drill rig to the second drill hole location out of a planned four-hole programme at the MFC Project and further information in respect of this drill target will be provided shortly.

OWNERSHIP STRUCTURE – MOLOPO FARMS COMPLEX PROJECT

Power Metal currently has an 18.26% shareholding in Kalahari Key and has elected to earn in (“Earn-In”) to a 40% direct interest in the MFC Project by funding US$500,000 of exploration expenditure in 2020, notably the diamond drilling of selected targets (the “Drill Programme”). On completion of the Earn-In, and on the basis of the current 18.26% shareholding in Kalahari Key, Power Metal will have an effective economic interest of 50.96% in the MFC Project.

THE DRILL PROGRAMME

The Drill Programme is for an initial planned 2,505m across four diamond core drill holes with planned target hole depths varying from 525m to 710m.

The Drill Programme is designed to intersect four high priority targets prospective for massive nickel sulphide mineralisation, delineated by both Time Domain Electromagnetic (“EM”) and Natural Field Audio Magneto Telluric (“NF-AMT”) geophysics surveys.

FINANCING OF THE EARN-IN

In respect of the US$500,000 Earn-in spend Power Metal has to date sent cash payments for initial expenses of US$133,641 to Kalahari Key, leaving a balance of US$366,359 (approximately £278,000) remaining.

This balancing amount is fully funded and covered by Power Metal existing working capital comprising cash and listed investments which as at 13 November 2020 was approximately £1,734,000.

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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.


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