Power Metal (POW.L) Sale of Schreiber-Hemlo Interests.

Sale of Schreiber-Hemlo Interests for £1 million

Power Metal Sells its 100% owned Schreiber-Hemlo Interests to First Class Metals Ltd which is planning to list in London in 2021

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, is pleased to announce the sale of its Schreiber-Hemlo project interests in Ontario, Canada to First Class Metals Ltd (“First Class” or “FCM”).

HIGHLIGHTS

· Sale of Power Metal’s Schreiber-Hemlo project interests to First Class for £1 million consideration payable through the issue of 333,334 new ordinary shares of £1 each in First Class Metals Ltd (“First Class Shares”) at a price of £3 per share.

· First Class is a UK private company with an existing portfolio of interests in the Schreiber-Hemlo region held through its Canadian operating subsidiary First Class Metals Inc. and is currently seeking a listing on a recognised stock exchange in London, targeted for late 2021.

· Power Metal is also to invest CAD$50,000 (circa £28,764) to acquire 9,588 additional First Class shares in First Class’s pre-IPO financing currently underway at £3 per share.

· After the above Power Metal’s holding in First Class will amount to 342,922 shares or circa 39.9% based on currently issued share capital of FCM.

· Power Metal has the right but not the obligation up to IPO to maintain its percentage holding in FCM at a minimum of 35.5%.

Whilst it is the intention of First Class to pursue a listing on a recognised stock exchange in London targeted for late 2021, there is no guarantee that the IPO of First Class will proceed, whether it will be able to raise additional equity funding or at what price it will issue new shares to potential investors.

James Knowles, Executive-director of First Class Metals Limited commented:

“First Class Metals is delighted to have executed this agreement with Power Metal Resources. The combination of our asset bases in the Hemlo Schreiber Greenbelt Belt offers great synergies in joining together two highly prospective exploration packages which are located in one of the best mining postcodes globally.

Of particular interest is the combination of both companies adjoining interests in North Hemlo into what we now see to be a ‘district sized’ exploration block. The North Hemlo project is in close proximity to Palladium One (TSXV:PDM) ultra high grade nickel/copper Tyko discovery on it’s Eastern flank and Panther Metals (LSE:PALM) in the West.

We look forward in the near term to the planned listing of First Class Metals in London and advancing the enlarged package of land this agreement brings together in a cohesive and strategic manner.

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

“Power Metal is pleased to confirm the sale of its Schreiber-Hemlo interests into First Class which is currently preparing for a listing in London in the near future.

First Class has itself assembled a strategic footprint of ground in the Schreiber-Hemlo region and has already secured a joint venture with Palladium One just to the north of Power Metal’s Hemlo North Project.

Bringing our Schreiber-Hemlo interests together with First Class will create a larger more diverse exploration package and on listing Power Metal will hold a strategic stake.

Given the geological prospectivity and burgeoning interest in the Schreiber-Hemlo region, we feel that First Class, with its team and their evident commitment, has the potential to perform well as a listed vehicle in London.

We therefore look forward to First Class achieving its London listing as soon as possible.”

ABOUT FIRST CLASS METALS

First Class Metals Limited is a minerals exploration company focused on proving & developing the significant potential of the Pezim Blocks, Esa & Sugar Cube Gold/Base Metal Exploration Projects in Ontario, Canada.

These projects totalling 579 mining cell claims are located close to the Barrick Hemlo Gold Mine and adjacent to the Harte Gold Sugar Zone, within the Western portion of the Wawa-Abitibi Gold Belt of Ontario, Canada.

TRANSACTION TERMS

Properties

Power Metal Resources plc, through its 100% owned subsidiary Power Metal Resources Canada Inc (“Power Canada”) holds seven Hemlo Schreiber properties as follows (the “Properties”):

– Hemlo North Gold Project (25.82 km2):

· Roger Lake (50 claims)

· Olga Lake (42 claims)

· Dotted East (30 claims)

– McKellar Project (12.3km2)(58 claims)

– Coco-East Project (6.4km2)(30 claims)

– Enable Project (8.7km2)(41 claims)

– Magical Project (3km2)(14 claims)

The book value for the Properties as at the date of transaction was £231,837.

Acquisition Terms

First Class will acquire a 100% interest in the Properties as outlined above and the consideration for the acquisition will be £1,000,002 to be satisfied through the issue of 333,334 First Class Shares at £3.00 per share.

POW Participation in FCM Pre-IPO Financing

Power Metal is also subscribing for CAD$50,000 of First Class shares in the pre-IPO financing round (circa £28,764 for 9,588 new ordinary First Class Shares).

POW Pre-emptive Rights

Power Metal have the right but not the obligation up to the IPO to maintain its proportionate group shareholding at a minimum of 35.5% of FCM issued share capital on the same terms as any new FCM shares are issued.

Additional Terms

Power Metal and Power Canada and their professional corporate, licensing and geological teams will continue to work with First Class to assist with claim transfer, the IPO process and ongoing business support.

Power Metal may nominate a Non-executive Director to the board of First Class.

First Class and their subsidiaries agree to adopt the existing Net Smelter Return Royalty (“NSR”) for all properties acquired from Power Metal, which are held by a consortium led by established local prospector Brian Fowler. Details of the NSR was announced on 21 January 2021 and 26 January 2021.

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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