Power Metal Resources plc / EPIC: POW / Market: AIM

26 May 2021

Power Metal Resources plc ("POW", "Power Metal" or the "Company")

Interim Results

Power Metal Resources plc the AIM listed metals exploration and development company is pleased to announce its unaudited interim results for the six months ended 31 March 2021.

Statement by Paul Johnson, Chief Executive Officer:

"In the six months ended 31 March 2021 we have pushed the Power Metal business to explore extensively across its project portfolio with, in our view, some excellent and very fortunate findings. We are seeking large scale metal discoveries with the emphasis on plural as we believe our portfolio is capable of delivering a number of discoveries.

Junior resource exploration is a high-risk endeavour, so investors in Power Metal rightly expect the potential for outsized returns that come with discoveries and to achieve them requires proactivity and investment in exploration.

Since October 2020 we have invested in exploration work in every single project we hold an interest in including three separate drill programmes across interests in Botswana, Canada and Tanzania.  There are more planned drill campaigns in the coming months. 

Notable exploration successes announced to date include the identification of extensive anomalies from the Kalahari Copper Belt, Botswana (held in JV with Kavango Resources plc), significant nickel drill intersections from Molopo Farms Complex Project, Botswana, and bonanza grade silver from the Silver Peak Project, Canada.  These are by no means the only successes and as noted above we have been very fortunate with early exploration success across our portfolio.

Notwithstanding the exploration progress being made, and our search for large scale metal discoveries, we are also running a commercial enterprise that has to balance the books and generate working capital to fund its operations.

We recognise the value of the London capital markets providing access to additional finance and that is one of the principal reasons junior resource companies list. That said we are also looking to build our working capital organically through targeted growth in our investment portfolio and the spin-out of certain projects into their own listed vehicles. 

Financial strength for a junior exploration company is important and as at 21 May 2021 Power Metal had working capital of circa £2.57 million, representing cash and listed company investments. This robust working capital figure was notwithstanding the material expenditure on exploration and corporate development in the half year ended 31 March 2021.

We seek size and scale in our business through metal discoveries in district scale exploration and innovative corporate activity.  To do this we have recognised the need to build our operational team and now have an in-house Exploration Manager, Investor Relations Manager and Corporate Spin-Out Management.  The expanded team is intensively engaged on delivering growth in our business through our project portfolio.

I would like to thank the board and Power Metal team for their determined dedication to our business objectives.  The support we receive from our advisor network continues to be first rate and needs to be as Power Metal is a proactive company.

As always, and never to be left unsaid, I thank our shareholders for their support and commitment to the Power Metal business and its ambitions.  It is easy to be ordinary, yet we have no such desire, and with the support of our shareholders we aim to make Power Metal a stand-out performer demonstrating how an ambitious, determined junior resource company can deliver."

Power Metal Interests at today's date:

⁽¹⁾ Conditional agreement to acquire First Development Resources (Pty) Ltd.

⁽²⁾  50.8% reflects effective economic interest including 40% direct project interest and 10.8% indirect interest through shareholding in project holding company Kalahari Key Mineral Exploration Pty Ltd

Operational Highlights

In the Half Year to 31 March 2021:

Australia

·    Further development of the Australian Gold Joint Venture focused on the Victoria Goldfields including notably the grant of the first three exploration licences announced in February 2021, a further two licences in March 2021 and the commencement of ground exploration across the granted licence ground.

·    Option Agreement announced in January 2021 to acquire First Development Resources Pty Limited with interests in two copper-gold properties in the Paterson Province  Eastern Pilbara, Western Australia. (Note this Agreement was subsequently superseded in April 2021 as outlined below).

Botswana

·    Drilling commenced in October 2020 at the Molopo Farms Complex Project in Botswana with a 2,500m diamond drill programme targeting nickel sulphide and platinum group metal ("PGM").  By half year end 3 holes were complete with results sent for assay testing.  Mineralogical studies confirmed the presence of nickel sulphides in drill core.

·    Exploration work undertaken across the Botswana Joint Venture with Kavango Resources plc (LON:KAV) at the South Ghanzi (Kalahari Copper Belt), targeting copper-silver and the Ditau Project, targeting rare earth elements.

Canada

·    A 500m diamond drill programme was launched in October 2020 at the Silver Peak Project in British Colombia, Canada, but access challenges and weather conditions led to a change in plans with a man-portable drill rig being used instead to undertake a shortened drill programme. Results announced December 2020 showed high grade silver and demonstrated mineralised vein continuity, with the full drilling programme planned to recommence in 2021.

·    Acquisition of 7 exploration properties in the Schreiber-Hemlo region of Ontario.

The Democratic Republic of the Congo (The DRC)

·    High grade copper and cobalt values announced November 2020 from assay testing on the 2020 pitting, mapping and sampling undertaken at the Kisinka Project in the DRC, which led to the commencement of ground geophysics in December 2020 to delineate targets for drilling.

Tanzania

·    A rotary air blast drill programme commenced in December 2020 at the Haneti Nickel Project, held in joint venture with Katoro Gold plc (LON:KAT), to provide information leading into a subsequent planned diamond drill programme targeting nickel sulphide and Platinum Group Metals.

USA

·    Exploration fieldwork undertaken at the Alamo Gold Project in Arizona USA, as announced in December 2020.

After 31 March 2021:

·    The Rotary Air Blast drilling programme results from the Haneti Nickel PGM Project were announced in April 2021 and confirmed the move to deep diamond drilling;

·    Assay results released in April 2021 from hole K1-6 at the Molopo Farms Complex Project in Botswana, confirming significant nickel intersections and later that month the Company confirmed the completion of its earn-in to a 40% direct project interest;

·    Extensive exploration work continued at the Australian Gold Joint Venture in the Victoria Goldfields granted licences and a further update covering this was provided in April 2021, together with confirmation of a further two licence grants later that month;

·    A conditional acquisition of First Development Resources Pty Limited was announced in April 2021, with a revised acquisition structure and now including 5 licence interests in the Paterson Province, East Pilbara, Western Australia;

·    The Company announced the creation of a new resource project incubator subsidiary in May 2021, Power Capital Investments Limited;

·    In May 2021, the Company announced the Kisinka Project in the DRC saw prominent magnetic highs identified from ground geophysics, and an intention to drill at Kisinka following completion of preparatory exploration work.  In addition, confirmation was received that the project had been awarded a 25-year Production Licence;

·    An Option agreement was announced in May 2021 allowing for the acquisition of a 100% interest in two exploration licences in the Tati Greenstone Belt, Botswana, targeting gold and nickel;

·    In May 2021 positive findings were announced from the South Ghanzi Project in the Kalahari Copper Belt, Botswana, with extensive anomalies identified including 7 airborne electromagnetic targets for follow up geochemical sampling and drill testing; and

·    As at 21 May 2021, Power Metal's working capital comprising cash and listed investments amounted to circa £2.57 million, providing a robust underlying financial position for ongoing operations.

Financial Highlights for the Half Year Ended 31 March 2021:

·    Loss for the period, attributable to owners of the parent of £0.59 million (2020: £0.24 million), resulting in a loss per share of 0.07 pence (2020: 0.05 pence);

·    Warrant exercises during the period raised £2,692,474 for the Company; and

·    Net assets of £4.6 million at the period end (30 September 2020: £2.4 million).

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 POW 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 discovery of precious or base metals.

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.

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 MARCH 2021

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2021