TIDMPOW

RNS Number : 5429K

Power Metal Resources PLC

22 December 2022

22 December 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Commercial Update

Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces a commercial update providing the latest position in respect of various corporate activities recently completed or underway.

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

"I am a resolute believer in the junior resource sector and its ability to deliver considerable returns for investors. The sector is, ultimately, driven by cyclicity caused by shifting supply and demand fundamentals for the underlying metals.

Over the past 4 years, Power Metal has assembled a unique and diverse global project portfolio which is ready for what I believe will be a longstanding and robust bull market for junior resource companies.

After a long-sustained bear market for resource juniors, I believe that the sector recovery has now begun as demonstrated by rising metal prices and the evident growing demand for metals in most industrial settings and for investment security.

In the last 6 months we have seen the IPO of Power Metal investee company First Class Metals PLC and completion of the Kanye Resources disposal to Kavango Resources PLC. These two transactions alone brought additional listed securities into the Power Metal portfolio that are together currently worth c.GBP4.1m (at the mid-market price on 21.12.22 market close).

Below you will see a further five transactions which each have the potential to add considerably to the Power Metal balance sheet. This corporate activity will complement our ongoing and successful exploration work at the Molopo Farms Complex and Tati Gold projects both located in Botswana and our Athabasca Basin uranium interests in Canada.

I would like to thank our professional teams for working so diligently on multiple complex transactions and positioning us where we are today. I also want to thank our shareholders who have stayed with us, through this challenging part of the cycle, patiently supporting us while we continue to push the business forward in advance of the next bull market.

We approach the Christmas and New Year break with a heightened sense of excitement and optimism for 2023 and beyond."

 
           Company/Operations                POW                                   Status 
                                              % 
 First Class Metals                        27.91%     Following the disposal of Power Metal's 
  PLC (LON:FCM)                                        Schreiber-Hemlo interests to FCM 
  Exploration in the                                   in September 2021, FCM successfully 
  Schreiber-Hemlo region                               secured admission to the Official 
  of Ontario, Canada.                                  List (by way of a Standard Listing 
  www.firstclassmetalsplc.com                          under Chapter 14 of the Listing Rules), 
                                                       on 29 July 2022. 
                                                       Power Metal holds a total of 18,516,097 
                                                       FCM shares, which are subject to 
                                                       a hard lock-in agreement until 29 
                                                       July 2023, with a further 12-month 
                                                       orderly market arrangement thereafter. 
                                                       The Company also holds 517,705 warrants 
                                                       to acquire new FCM ordinary shares 
                                                       at a price of 10p and with an expiry 
                                                       date of 29 July 2023. 
                                                       At the closing market mid-price of 
                                                       17p on 21 December 2022 the value 
                                                       of Power Metal's shareholding in 
                                                       FCM is GBP3,194,027. 
                                         ----------  ----------------------------------------------------------------- 
 Kavango Resources                          9.85%          Following completion of the disposal 
  PLC (LON:KAV)                                            of Power Metal's interest in the 
  Exploration in Botswana                                  Kanye Resources joint venture back 
  www.kavangoresources.com                                 to partner KAV, as announced in November 
                                                           2022, Power Metal's interests in 
                                                           KAV, which is also on the Official 
                                                           List of the London Stock Exchange, 
                                                           include: 
                                                            *    69,500,000 KAV ordinary shares. 
 
 
                                                            *    Warrants to acquire 4,750,000 KAV ordinary shares at 
                                                                 a price of 2.5p (expiry April 2023) 
 
 
                                                            *    Warrants to acquire 30,000,000 KAV ordinary shares at 
                                                                 a price of 4.25p (expiry January 2025) 
 
 
                                                            *    Warrants to acquire 30,000,000 KAV ordinary shares at 
                                                                 a price of 5.5p (expiry January 2025) 
 
 
                                                           In addition, Power Metal holds a 
                                                           1% net smelter return ("NSR") royalty 
                                                           across all Kanye Resources properties 
                                                           as at 8 July 2022. 
                                                           At the closing market mid-price of 
                                                           1.5p on 21 December 2022 the value 
                                                           of Power Metal's shareholding in 
                                                           KAV is GBP1,042,500. 
                                         ----------  ----------------------------------------------------------------- 
 Golden Metal Resources                    83.13%     During 2021, Power Metal acquired 
  PLC (GMT)                                            outright three projects located in 
  Exploration and development                          Nevada, USA (Pilot Mountain, Garfield 
  in Nevada, USA.                                      and Stonewall) and secured an option 
  www.goldenmetalresources.com                         to acquire a 100% interest in a fourth 
                                                       project (Golconda Summit). 
                                                       The projects were acquired through 
                                                       GMT, then a wholly-owned subsidiary 
                                                       of Power Metal and a vehicle incorporated 
                                                       in advance of a planned listing in 
                                                       the London capital markets. 
                                                       A subsequent Pre-IPO financing for 
                                                       GMT raised GBP750,000 before expenses. 
                                                       Power Metal currently holds 49,874,437 
                                                       GMT shares or 83.13% of GMT issued 
                                                       share capital. 
                                                       GMT has now completed the pre-IPO 
                                                       work required and a listing document 
                                                       has now been prepared (subject to 
                                                       final data additions) and the IPO 
                                                       financing is underway. 
                                                       A series of roadshow meetings have 
                                                       been undertaken with interested parties 
                                                       including institutions based in Canada 
                                                       and the UK and to date the GMT business 
                                                       model and listing proposal has been 
                                                       well received. These meetings will 
                                                       continue over the coming weeks and 
                                                       into the new year, allowing those 
                                                       with conflicts during the holidays 
                                                       to finalise their interest in the 
                                                       IPO early in the new year. 
                                                       GMT is looking to complete the IPO 
                                                       Financing and, subject to standard 
                                                       regulatory approvals, the final listing 
                                                       steps in early 2023. 
                                         ----------  ----------------------------------------------------------------- 
 First Development                         62.12%*    During 2021. Power Metal acquired 
  Resources PLC (FDR)                                  three exploration projects in Western 
  Exploration in Western                               Australia (Wallal, Braeside West 
  Australia and the                                    and Ripon Hills), 
  Northern Territory                                   The projects were acquired through 
  of Australia.                                        FDR, then a wholly-owned subsidiary 
  www.firstdevelopmentresources.com                    of Power Metal and a vehicle incorporated 
                                                       in advance of a planned listing in 
                                                       the London capital markets. 
                                                       Subsequently, in 2021, FDR acquired 
                                                       an additional exploration project 
                                                       in the Northern Territory of Australia 
                                                       (Selta). 
                                                       Additional commercial transactions 
                                                       were undertaken by FDR in 2022 with 
                                                       the acquisition of a 100% interest 
                                                       in Pardoo Resources Pty Ltd (a project 
                                                       holding company) and the purchase 
                                                       of NSR royalties retained by the 
                                                       vendors of the vehicles holding the 
                                                       above projects. 
                                                       Power Metal currently holds 38,605,697 
                                                       FDR shares or 62.12%* of FDR issued 
                                                       share capital. 
                                                       FDR is nearing completion of all 
                                                       the IPO work streams and is finalising 
                                                       the listing document in preparation 
                                                       for a planned IPO financing roadshow 
                                                       which is expected to commence in 
                                                       early 2023. 
                                         ----------  ----------------------------------------------------------------- 
 New Ballarat Gold                          49.9%     In 2020 Power Metal established a 
 PLC (NBGC)                                            joint venture with Red Rock Resources 
 Exploration in the                                    PLC (LON:RRR) focused on exploration 
 Victoria Goldfields                                   projects in the Victoria Goldfields, 
 of Australia.                                         Australia. 
 https://www.powermetalresources.com/pr                The joint venture has secured a ground 
 oject/victoria-goldfields/                            footprint in the Victoria Goldfields 
 .                                                     comprising 1,841km(2) of granted 
                                                       licences and 493km(2) of exploration 
                                                       licence applications awaiting grant. 
                                                       The footprint includes two former 
                                                       high-grade working gold mines (Ajax 
                                                       and Berringa), with Berringa currently 
                                                       the subject of an ongoing diamond 
                                                       drilling programme. 
                                                       A National Instrument 43-101 technical 
                                                       report has been prepared covering 
                                                       7 of the licences, as an underlying 
                                                       document in preparation for listing 
                                                       of NBGC. 
                                                       The joint venture has a local operational 
                                                       team and is based out of Ballarat, 
                                                       Victoria. 
                                                       Across the footprint extensive evidence 
                                                       of historical gold workings exist, 
                                                       and outside of the footprint boundaries 
                                                       numerous positive exploration updates 
                                                       have been noted by fellow exploration 
                                                       companies. 
                                                       For example, we note recently the 
                                                       discovery of extensive gold mineralisation 
                                                       by Southern Cross Gold Ltd (a spin-out 
                                                       listing from Mawson Gold Ltd) included 
                                                       an intersection of 305.8m at 2.4g/t 
                                                       gold at their Sunday Creek project 
                                                       situated 5km east of the Kilmore 
                                                       project held by NBGC. Link here: 
                                                       https://wcsecure.weblink.com.au/pdf/SXG/02612149.pdf 
                                                       With the increasing confidence in 
                                                       the market and support for high-quality 
                                                       gold exploration investment opportunities, 
                                                       Power Metal is working with partner 
                                                       Red Rock Resources PLC to identify 
                                                       the best commercial structure and 
                                                       expeditious pathway to enable the 
                                                       planned listing to proceed. 
                                         ----------  ----------------------------------------------------------------- 
 NewCo                                       20%      Power Metal announced on 15.11.22 
  Exploration in Queensland's                (^)       the merger of its wholly owned Australian 
  Mount Isa copper belt                                holding company which holds a 100% 
  and in South Australia.                              interest in the Wilan Project located 
  NewCo to be incorporated                             in South Australia, with two other 
  shortly to allow the                                 Australian exploration companies 
  merger of three companies                            with 100% owned interests in the 
  and their interests                                  Mount Isa copper belt region of Queensland, 
  in South Australia                                   Australia. 
  and Queensland as                                    The intention is to secure a planned 
  per POW RNS 15.12.22).                               new listing on a recognised stock 
  NewCo website under                                  exchange of the new merger company 
  development.                                         NewCo, comprising the South Australia 
                                                       and Queensland interests, or to dispose 
                                                       of the new merger company into a 
                                                       currently listed or to be listed 
                                                       vehicle. 
                                                       Work is underway now to consider 
                                                       all available options and updates 
                                                       will be provided to the market in 
                                                       due course. 
                                         ----------  ----------------------------------------------------------------- 
 Uranium Energy Exploration               50-55%()   Power Metal has agreed the disposal 
  PLC (UEE)                                            of two uranium properties to UEE 
  Uranium exploration                                  subject to completion of a planned 
  in the Athabasca region                              listing of UEE. 
  of Canada                                            Following discussions with UEE, Power 
  www.uraniumenergyexploration.com                     Metal has agreed to extend the period 
                                                       for completion of the planned listing 
                                                       by 3 months to 31 March 2023. The 
                                                       intention is to list on a different 
                                                       exchange to that previously planned 
                                                       and to add further uranium projects 
                                                       to the UEE portfolio prior to the 
                                                       planned listing. 
                                                       As a result, UEE is now actively 
                                                       reviewing additional opportunities 
                                                       within the uranium space to bolster 
                                                       their portfolio in advance of the 
                                                       planned listing. 
                                                       The proposed business model (Uranium 
                                                       exploration focused on the Athabasca 
                                                       Basin area of Saskatchewan, Canada) 
                                                       has the support in principle of proposed 
                                                       investors in an IPO financing and 
                                                       would bring the first Athabasca focused 
                                                       investment proposition to the London 
                                                       capital markets. 
                                                       Further updates to follow as plans 
                                                       continue to advance. 
                                         ----------  ----------------------------------------------------------------- 
 

(^) subject to completion of Merger announced 15.12.22.

() 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

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 
 
SP Angel Corporate Finance (Nomad and Joint Broker) 
Ewan Leggat/Charlie Bouverat                          +44 (0) 20 3470 0470 
 
SI Capital Limited (Joint Broker) 
Nick Emerson                                          +44 (0) 1483 413 500 
 
First Equity Limited (Joint Broker) 
David Cockbill/Jason Robertson                        +44 (0) 20 7330 1883 
 
 
 
 

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.

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