15 December 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Merger Agreement - Wilan Project, South Australia

Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces a merger of its Wilan Project ("Wilan" or the "Project"), located in South Australia, with a number of other Australian exploration interests (the "Merger"). The Merger will create a new Australian exploration company and provide Power Metal with exposure to the world class Mount Isa copper belt located within Queensland, Australia

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

"Power Metal recognises the forward dynamic of copper as a commodity and the Merger will provide the Company with an immediate equity exposure to a strategic portfolio of exploration interests in the Mount Isa copper belt of Queensland, Australia.

The Queensland Projects are targeting major copper discoveries within a world class copper belt and are situated close to ground held by a number of substantial mining companies."

HIGHLIGHTS

·    The Wilan Project is comprised of two exploration licences ("ELs") which cover a total area of 1,994km², held within Power Metal Resources Australia Pty Ltd ("POW Australia"), which is a wholly-owned subsidiary of Power Metal Resources PLC.

·    A heads-of-terms agreement (the "Agreement") has been signed to combine POW Australia (100% owner of the Wilan Project) with two companies holding a 100% interest in a portfolio of two granted exploration licences and four licence applications covering 1,507km² in the Mount Isa copper belt of Queensland, Australia (the "Queensland Projects").

·    The Queensland Projects are held by two private Australian companies, RAB Resources Pty Ltd ("RAB Resources" or "RAB") and New Horizon Metals Pty Ltd ("New Horizon" or "NHM").

·    A new company ("NewCo") will acquire outright the shares in POW Australia, RAB Resources and New Horizon (the "Merger Parties"). Following the Merger Power Metal Resources plc will hold a 20% interest in NewCo.

·    POW Australia will be renamed Wilan Resources Pty Ltd shortly after completion of the Merger, enabling Power to retain the POW Australia name.

·    Following the Merger, NewCo will then commence the process for a planned listing targeting Q2 2023 or the acquisition of NewCo and its interests from an existing listed vehicle, subject to agreement of all the Merger parties.

·    Further information to follow with regard to the Merger progress & structuring, planned listing and project level developments across the combined project portfolio.

PROJECT MAPS

Project maps covering the Queensland Projects and Wilan Project licence footprints are provided below and will be uploaded to the Power Metal website in due course.

Fig. 1: Queensland Licence Footprint

Fig. 2 - Wilan Project Licence Footprint and Surrounding Area

TRANSACTION TERMS

NewCo will acquire 100% of the share capital of New Horizon, RAB Resources and POW Australia and then hold the Queensland projects and the Wilan Project.

The NewCo ownership on completion of the Merger and grant of the New Horizon licence applications below is outlined in the table below.

The Merger Parties will appoint the board of NewCo and will each have a right to nominate at least one board member.

Note: 20% of the NewCo shares will be issued to New Horizon immediately, with the balancing 20% issued on the grant of the Copper Creek and Bortala licence applications.  Should an acquisition of NewCo and/or its interests by an existing listed vehicle complete prior to any planned listing (which may only proceed with the agreement of all the Merger parties), then the remaining 20% of NewCo shares would be automatically issued to New Horizon on completion.

PROJECT LICENCE OVERVIEW

RAB interests include:

Gregory River - East and West

Tenures Exploration for Minerals (EPM's) 28642 and 28643, the Gregory River (East and West) Project, are exploration licences in application by RAB Resources covering 169.6km² and 220.8km², respectively.

Gregory River East and West tenements are prospective for copper, gold, lead, zinc, and cobalt.

Fiery Creek

Tenure EPM 27879 the Fiery Creek Project is a granted exploration licence held outright by RAB Resources covering 320km² with an expiry date of 16/03/2027.  Fiery Creek is believed to be prospective for copper, gold, lead, zinc, and cobalt.

Dynamite Creek

Tenure EPM 27870 the Dynamite Creek Project is a granted exploration licence held outright by RAB Resources covering 288km² with an expiry date of 16/03/2027.  Dynamite Creek believed to be is prospective for copper, gold, and cobalt.

NHM interests include:

Copper Creek

Tenure EPM 28272, the Copper Creek Project is an exploration licence in application by New Horizon covering 195.2km² with a lodgement date of 31/1/2022.  Copper Creek is prospective for copper, cobalt, silver, uranium, and rare earth elements.

Bortala

Tenure EPM 28271, the Bortala Project is an exploration licence in application by New Horizon covering 313.6km² with a lodgement date of 31/1/2022.  Bortala is prospective for copper, cobalt, silver, lead, zinc, uranium, and rare earth elements.

POW Australia interests include:

Wilan Project

The Wilan Project includes two granted exploration licences ("ELs") including EL6819 and EL6870.

EL6819, is a granted exploration licence held outright by POW Australia covering 999km² with an expiry date of 23/08/2028.

A desktop technical review completed over EL6819 identified an approximately 4 x 6km coincident magnetic and gravity geophysical anomaly located in the southeastern part of the Project. Such coincident geophysical anomalies have been noted as potential targets for iron oxide copper-gold mineralisation ("IOCG") elsewhere within the highly prospective Gawler Craton.

The Wilan Project also includes recently granted EL6870 which covers an area of 995km² and lies to the northwest of EL6819 which carries an expiry date of 10/11/2028.

Exploration targets within EL6870 include potential surficial lacustrine uranium (U) and vanadium (V) mineralisation located within the western part of the Project. The lacustrine targets were identified by recently completed radiometric and hyperspectral analysis. In addition, within the northern part of EL6870, multiple kimberlitic indicator minerals have been identified by a previous operator, including occurrences of pyrope, kimberlitic ilmenite and picroilmenite. 

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 - Background

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration company which finances and manages global resource projects and is seeking large scale metal discoveries.

The Company has a principal focus on opportunities offering district scale potential across a global portfolio including precious, base and strategic 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.

Power Metal will develop projects internally or through strategic joint ventures until a project becomes ready for disposal through outright sale or separate listing on a recognised stock exchange thereby crystallising the value generated from our internal exploration and development work.

Value generated through disposals will be deployed internally to drive the Company's growth or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.

Exploration Work Overview

Power Metal holds a number of priority exploration projects with active exploration underway currently. The status of each project is outlined in the table below:

Exploration work programmes may also be underway within Power Metal investee companies and planned IPO vehicles where Power Metal has a material interest, the findings from which will be released on their respective websites, with simultaneous updates through Power Metal regulatory announcements where required.  These interests are summarised in the table below:

^{^} subject to completion of Merger announced 14.12.22.

^~ subject to completion of disposal of Reitenbach and E-12 properties, announced on 8.8.22 and 4.11.22, respectively.

^* reducing to 58.59% on issue of equity for NSR buyout announced 5.12.22.