6 May 2021

Power Metal Resources PLC

("Power Metal" or the "Company")

Botswana Molopo Farms Complex - Commercial Update

Kalahari Key Restructuring Progressing Well and Intention to Seek Listing

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce a commercial update in respect of Kalahari Key Mineral Exploration Pty Ltd ("Kalahari Key" or "KKME") and the Molopo Farms Complex Project (the "Project" or "MFC Project").

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

"We are delighted to see the MFC Project structuring discussions progressing so efficiently and we continue to work with our partners to implement this as quickly as possible.

The decision to create a new UK plc to hold the remaining 60% interest in the MFC Project is an important step.  We believe the planned UK listing will enable fuller recognition of the MFC Project's value, particularly given the notable exploration success already achieved and the level of interest being shown in the Project.  We also welcome Richard's appointment as Newco CEO and note that as expected he is already pursuing matters with some determination.

For Power Metal we are pleased to support the listing of the new vehicle, which will enable our holding in Kalahari Key to have demonstrable value, further building our working capital with additional listed equity.

In the interim we continue to push on with technical work at the MFC project and further updates are anticipated in the near term."

Background

As announced on 22 April 2021 Power Metal has earned-in to a 40% direct interest in the MFC Project, which is targeting prospective magmatic intrusion-hosted massive nickel sulphide and platinum-group element ("PGE") mineralisation in Botswana.  The balancing 60% direct interest is held by Kalahari Key.

It is the intention of Power Metal to retain ownership of its 40% direct MFC Project interest at this time.

Restructuring Process

To reflect the new ownership structure a number of steps are planned as follows:

1.    Kalahari Key will remain a single project holding company and continue to manage the MFC project, and a new local board will be established including at least one director from Power Metal.

2.    The share capital of Kalahari Key will be restructured to reflect a new ownership structure for the MFC Project with 60% of Kalahari Key shares held by existing Kalahari Key shareholders and 40% of shares held by Power Metal.

3.    The above 60% Kalahari Key shareholding will be held through a newly formed UK plc ("Newco") in which existing Kalahari Key shareholders (including Power Metal) will have the same percentage ownership interest as currently held in Kalahari Key.

Proposed Listing of Newco

The intention is for Newco to list on a recognised stock exchange on the London capital markets during 2021 and for it to become a proactive resource exploration vehicle.  Newco operations will principally include advancement of the MFC Project and the acquisition of additional opportunities, with a focus on Botswana.

Newco Management

A new Chief Executive Officer, Richard Nolan, has been appointed to manage Newco operations and the proposed listing process. Richard has over 20 years' international experience in banking and management including equity research, mergers & acquisitions and private equity.  He has held board level positions with several natural resource focused companies both private and publicly listed.

Additional Newco board appointments will be announced in due course.

Financing of Newco

Following settlement of any outstanding costs within Kalahari Key, the proceeds from a recent rights issue (raising circa US$259,000 and in which Power Metal took up its rights), when settled by participants, will be applied to initially fund Newco. Thereafter it is expected that Newco will seek additional funding through further private funding rounds or through an IPO on a recognised stock exchange.

Power Metal Interest in the MFC Project

Currently, before the restructuring above, Power Metal holds 18% of Kalahari Key and therefore with its 40% direct project interest has an overall effective economic interest in the MFC Project of 50.8%. 

Following the restructuring and upon settlement of the Kalahari Key rights issue in which Power Metal has participated the Company will hold 21.7% of Newco, meaning its overall effective economic interest in the MFC Project will increase to 53.02%.

Latest Exploration Information

Latest exploration results from the MFC Project including assays from diamond drilling displaying significant nickel intersections were published on 8 April 2021 and may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/botswana-molopo-farms-complex-assay-results/14929973

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:

Notes to Editors:

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration and development company seeking a large scale metal discovery.

The Company has a global portfolio of project interests including precious and base metal exploration in North America, Africa and Australia. Project interests range from early stage greenfield exploration to later stage prospects currently subject to drill programmes.

The Board and its team of advisors have expertise in project generation, exploration and development and have identified an opportunity to utilise the Company's position to become a leader in the London market for investors wishing to gain exposure to proactive global metals exploration.