29 February 2024
Power Metal Resources
PLC
("Power Metal" or the
"Company")
Acquisition - Strategic Metals
Extraction
Power Metal Acquisition of 75% Interest
in GSA (Environmental) Limited
Power Metal Resources PLC (AIM:POW), the
London-listed exploration company seeking large-scale metal
discoveries across its global project portfolio, announces that the
Company has signed binding heads of terms (the "Agreement") with
GSA (Environmental) Limited ("GSAe") upon which Power Metal agrees
to conditionally acquire 75% of the entire issued share capital of
GSAe.
GSAe is a privately owned UK-headquartered
engineering technology provider and process licensor, which
specialises in the extraction of strategic metals from 'secondary
sources' including power station ash, refinery waste,
titanium dioxide waste and spent catalysts, while also producing
much more environmentally friendly residue. GSAe aspires to be the
first-choice global provider of technological solutions to
environmental problems posed by toxic metals in waste
products.
Power Metal will pay initial consideration of
£75,000 through the issue of new ordinary shares of 0.1p each
("Ordinary Shares") in Power Metal, full details of which are set
out below. The maximum total consideration for the acquisition is
£1 million, payable in cash and/or new ordinary shares in the
Company (the "Transaction") with the maximum payment subject to
GSAe achieving a number of performance milestones, including a year
three annual profit of at least £1 million.
Sean Wade, Chief Executive Officer of
Power Metal Resources plc, commented:
"I
am very excited to announce this proposed strategic acquisition for
Power Metal. We have ambitious plans for this innovative business
and believe that the extraction of strategic metals from waste
products fits well with our strategy of seeking exposure to the
critical metals needed for the global energy
transition.
GSAe's proprietary technology has wide application, including
in Saudi Arabia, with its plentiful supply of metal-rich power
station ash. We believe this acquisition represents a significant
step forward in our efforts to become a major operator in the
region.
Moreover, the Directors believe the acquisition will also
create a substantial revenue opportunity for Power Metal
shareholders, which if successful, will allow us to fund our
activities with less recourse to dilutive equity
financing.
I
look forward to announcing the completion of this transaction in
due course."
CORPORATE
HIGHLIGHTS (GSA (Environmental)
Limited)
§ Founded in 2003, GSAe
specialises in metals extraction from secondary sources (e.g.
refinery residues, TiO2 waste, ash, spent catalysts),
providing a sustainable source of strategic metals
(including scandium, yttrium, other rare
earth elements (REE), vanadium, nickel and niobium) for use in high growth advanced
manufacturing.
§ GSAe's robust and
adaptive technology enables the production of high purity
strategically important metals at production costs that
substantially undercut traditional mining routes. Using
hydrometallurgical techniques, GSAe's metals extraction technology
allows for improved sustainability/environmental impact by
preventing otherwise harmful compounds being released. It also
substantially reduces the volumes of waste materials sent to
landfill.
§ GSAe already has a
Memorandum of Understanding in place with a major Saudi Arabian
supplier of fly ash with several further discussions
ongoing.
AGREEMENT
TERMS
Maximum total consideration payable is capped
at £1 million, structured as follows:
-
Power Metal will pay initial consideration of £75,000 through the issue of Ordinary
Shares in Power Metal at an issue price equal to the volume
weighted average price ("VWAP") in the 5 trading days immediately
prior to the completion of conditions precedent set out below (the
"Effective Date");
-
Immediately upon execution by GSAe of a commercial agreement
with a third-party of no less than £160,000 value (the "Third-Party
Agreement Date"), £75,000
payable through the issue of Power Metal Ordinary Shares at an
issue price equal to the VWAP in the 5 trading days immediately
prior to the Third-Party Agreement Date;
-
Upon the first anniversary of the Effective Date (the "First
Anniversary Date"), £250,000 payable at the sole discretion
of GSAe in cash or by the issue of Power Metal Ordinary Shares at
an issue price equal to the VWAP in the 5 trading days immediately
prior to the First Anniversary Date, conditional upon GSAe
recording a profit in the relevant period of no less than
£450,000;
-
Upon the second anniversary of the Effective Date (the
"Second Anniversary Date"), £250,000 payable at the sole discretion
of GSAe in cash or by the issue of Power Metal Ordinary Shares at
an issue price equal to the VWAP in the 5 trading days immediately
prior to the Second Anniversary Date, conditional upon GSAe
recording a profit in the relevant period of no less than £650,000;
and
-
Upon the third anniversary of the Effective Date (the "Third
Anniversary Date"), £350,000 payable at the sole discretion
of GSAe in cash or by the issue of Power Metal Ordinary Shares at
an issue price equal to the VWAP in the 5 trading days immediately
prior to the Third Anniversary Date, conditional upon GSAe
recording a profit in the relevant period of no less than
£1,000,000.
Completion of the Transaction is conditional
upon completion of due diligence by Power Metal and other customary
pre-conditions.
It is the intention of the parties to the
Agreement that the conditions should be satisfied within 30 days
from the Effective Date of this Agreement. Should all conditions
precedent not be satisfied within 30 days, the Agreement may be
terminated at the Company's sole discretion.
While the Directors of the Company believe that
the Transaction will proceed, there can be no certainty at this
stage that the Transaction will complete. A further announcement
will be made in due course.
During the period of 1 June 2023 to 31 December
2023, GSAe incurred a profit (unaudited) of £156,680 and, as at 31
December 2023, it had gross assets of £242,401 (unaudited) and net
assets of £40,387 (unaudited).
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
|
|
Sean Wade (Chief Executive
Officer)
|
|
|
|
SP Angel Corporate Finance (Nomad
and Joint Broker)
|
|
Ewan Leggat/Caroline Rowe/Harry
Davies-Ball
|
+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
|
BlytheRay (PR Advisors)
|
+44 (0) 20 7138 3204
|
Tim Blythe
|
|
Megan Ray
|
|
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.