Power Metal Regulatory News (POW)

30 March 2021

Power Metal Resources PLC

("Power Metal" or the "Company")

Botswana Molopo Farms Complex - Exploration Update

Nickel Sulphides Confirmed, Assay Progress, Downhole Geophysics Update and Third Drill Hole Update

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to announce an exploration update at the Kalahari Key Mineral Exploration Pty Ltd ("Kalahari Key" or "KKME") Molopo Farms Complex Project (the "Project" or "MFC Project"), which is targeting prospective massive nickel sulphide and platinum-group element ("PGE") mineralisation in Botswana.

CHIEF EXECUTIVE OFFICER UPDATE

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

"The confirmation of nickel sulphides in the core from drill hole KKME 1-6 is a very positive outcome and adds yet more weight to the geological proposition being tested at the MFC Project.

The team at KKME are continuing to stay focused and assimilate technical information as it flows in. Further data is due in the form of laboratory assay results, continuing University mineralogical analysis of core samples and downhole geophysics data, all of which is expected shortly.

Undoubtedly we will have more to say soon and we look forward to sharing further findings in due course." 

HIGHLIGHTS:

Mineralogical Testing

Selected quarter core samples were sent to the Geology Department of the University of Witwatersrand in Johannesburg (the "University") for thin section mineralogical analysis.

Nickel sulphides have been identified in three core samples containing visible sulphide grains taken from the drill hole KKME 1-6 (at Target 1-6). A total four thin sections, from the three core samples, were cut from areas with the most abundant sulphides and textural heterogeneity.

The sulphides were studied under optical light and using a Tescan Integrated Mineral Analyser ("TIMA") scanning electron microscope in the Earth Lab of the University.

The preliminary study shows that the primary magmatic, pentlandite-bearing, assemblage is present only in sample IMK-05139 (taken from 310m down-hole depth). Two samples (IMK-05149 and IMK-05153) from down-hole depths of 295m and 297m respectively) contain relics of primary pentlandite within predominant secondary nickel sulphides, arsenides and alloys (Heazlewoodite, Shandite, Maucherite, Awaruite, and Breithauptite) that were likely formed under reduced conditions.

These associations are typical of serpentinised peridotite and could be related either to hydrogen by-production during serpentinisation or involvement of organic carbon into hydrothermal process. The PGE content of all sulphides was under a detection limit of the energy-dispersive analysis but this also needs to be confirmed with a more appropriate assessment.

While these results are encouraging, it is necessary to stress that they are very preliminary, and further work is in progress at the University. 

Glossary:

Awaruite Ni3Fe a nickel-iron alloy

Breithauptite NiSb a nickel-antimony alloy

Heazlewoodite Ni3S2 a secondary nickel sulphide mineral

Maucherite Ni11As8 a nickel arsenide

PGE platinum group elements (ruthenium, rhodium, palladium, osmium, iridium, and platinum)

Pentlandite (Fe,Ni)9S8 a primary nickel sulphide mineral

Peridotite an ultramafic, magnesium-rich rock derived from rocks in the earth's mantle and most often found where mid-ocean rifts or other breaks in the oceanic crust have allowed the penetration of magma to surface

Serpentinisation a low temperature anaerobic oxidation process of ultramafic rocks in the course of which density is reduced and volume increased by the addition of water, in the course of which nickel and other elements undergo remobilisation as a result of hydrothermal activity

Shandite Ni3Pb2S2 in inclusions a secondary nickel sulphide mineral

Assay Testing

Samples from drill hole KKME 1-6 have now been delivered to the Scientific Services laboratory in Cape Town. The half core samples are to be analysed for nickel, copper, zinc, gold and platinum. 

Delivery of the samples was impacted by a transit delay at Johannesburg which we understand arose due to Covid-19 related operational restrictions. We understand that assay testing has now commenced on the samples.

A full assessment of hole KKME 1-6 will be made once all of the mineralogical and chemical analyses have been received.

Samples for hole KKME 1-14 are still in transit to the laboratory.

Third Drill Hole Progress

The third drill hole (KKME 1-11a) was at 455m on the 27th March and to date core has been examined to 450m. Here the rock is a fine grained black ultramafic, magnetic, and relatively unfractured. There are minor serpentine/talc veins.

Downhole Geophysics

KKME's consultant has now completed downhole geophysics fieldwork in respect of hole KKME 1-6 and the full technical report is expected shortly.

OWNERSHIP STRUCTURE - MOLOPO FARMS COMPLEX PROJECT

Power Metal currently has an 18.26% shareholding in Kalahari Key and has elected to earn in ("Earn-In") to a 40% direct interest in the MFC Project by funding US$500,000 of exploration expenditure by 30 April 2021, including the diamond drilling of selected targets (the "Drill Programme").

On completion of the Earn-In, and on the basis of the current 18.26% shareholding in Kalahari Key, Power Metal will have an effective economic interest of 50.96% in the MFC Project.

To date Power Metal has funded US$418,141 of the US$500,000 earn-in requirement, with US$81,859 (c. £59,426) remaining to complete the earn-in funding requirement. This amount will be paid by Power Metal from existing funds in the Company's US dollar account.

THE DRILL PROGRAMME

The Drill Programme is for an initial planned 2,505m and is designed to intersect high priority targets prospective for massive nickel sulphide mineralisation, delineated by both Time Domain Electromagnetic ("EM") and Natural Field Audio Magneto Telluric ("NF-AMT") geophysics surveys.

COMPETENT PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O'Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Competent Person under the AIM Rules - Note for Mining and Oil & Gas Companies. Mr O'Reilly is a Principal consultant working for Mining Analyst Consulting Ltd which has been retained by Power Metal Resources PLC to provide technical support.

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 metal exploration in North America and Australia together with base and strategic metal exploration in Africa. 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.