Power Metal Regulatory News (POW)

12 July 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Canadian Lithium Projects - Earn-In Update

Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces an update in respect of its earn-in agreement to acquire 100% of the Authier North and Duval East lithium properties ("Authier North" and "Duval East", collectively the "Properties"), located in the prolific Val D'Or mining camp in Quebec, Canada (the "Earn-In").

The Authier North and Duval East Earn-In interest is held by Power Metal's wholly-owned Canadian subsidiary Power Metal Resources Canada Ltd ("POW Canada") which is focused on strategic energy metal opportunities within Canada's top mining jurisdictions.

EARN-IN AGREEMENT CONTINUATION

The Earn-In agreement was originally signed in July 2021 and a link to the announcement covering this is below:

https://www.londonstockexchange.com/news-article/POW/agreement-canadian-lithium-properties/15061434

The Earn-In is staged with annual decision points to consider continuation into the next year and Power Metal have notified the property owner that the Company will continue into year two of the Earn-In.

RATIONALE FOR CONTINUATION

· On the back of strong lithium price fundamentals, and continued success at the neighbouring Sayona Mining Limited ("Sayona Mining"; ASX: SYA) Authier Lithium Project ("Authier Project"), Power Metal has made the decision to continue into the 2nd year of the Authier North Lithium Earn-In.1 

· The Company engaged a Canada-based lithium geologist to produce a Property Evaluation report (the "Evaluation"). The Evaluation considered the Authier North 2021 programme results, as well as the ongoing results from the neighbouring Authier Project in order to determine next exploration steps.

· On 1 March 2022, Sayona Mining announced a doubling of their Quebec lithium resource base, including an updated JORC (2012) compliant Measured, Indicated and Inferred Mineral Resource at their Authier Project of 17,136,000 tonnes at 1.01% Li20.2

· The Sayona Mining updated Authier Project Resource model includes the further downdip extension of their main lithium-bearing pegmatite dyke towards Power Metal's Authier North Property, as well as the establishment of an additional, sub-parallel pegmatite dyke which outcrops approximately 350m closer to the shared claim border with Authier North.2 This newly discovered dyke also dips towards the Authier North Property.

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

"Power Metal's Authier North and Duval East lithium Properties represent a strategic lithium interest for the Company with a footprint adjacent to the highly successful Authier Project held and operated by Sayona Mining.

Our work has identified priority lithium targets and we intend to continue our ground exploration work at the Properties in the near future."

PROPERTY EVALUATION AND EXPLORATION NEXT STEPS

The evaluation that was completed highlighted a priority Target Area (the "Target") on the Authier North Property that was not investigated by the Company during the 2021 programme. This Target is located near the eastern property boundary, where there is a contact zone between the La Motte Batholith (granitic intrusive) and the surrounding metasediments. This contact zone represents an analogous geological setting to that of lithium-bearing pegmatite dyke constituting the Authier Project Mineral Resource, which is located approximately 2km along strike to the west.

Power Metal will be sending a geologist to site in order to geologically map and prospect the approximately 800m of strike-length of this contact zone which exists within the Authier North Property. The next exploration steps for the property will be planned based on the findings of this work.

EARN-IN CONTINUATION PAYMENTS

By continuing into the second year of the Earn-In with Eagle Ridge Mining Limited, the following has become payable:

· Cash payment of CAD$25,000.

· Share-based payment of CAD$50,000, which is satisfied by the issue of new ordinary shares with the price determined using a 10-day volume weight average price ("VWAP") over the period 27 June to 8 July 2022. That VWAP is 0.85859p per share, and at the current exchange rate, CAD$50,000 is equivalent to £32,197, so 3,749,985 new Power Metal ordinary shares of 0.1p each ("Earn-In Shares") will be issued to Eagle Ridge Mining Limited.

Once issued, the Company has satisfied all requirements outlined in order to proceed to year 2 of the Earn-In. Prior to the expiry of two years from the date of the Earn-In original agreement, Power Metal must incur CAD $50,000 in exploration costs on the Property.

FURTHER INFORMATION

Authier North Property

The Authier North Property consists of fifteen (15) mineral claims covering an area of approximately 560-hectares and is prospective for lithium-bearing pegmatites and base-metal mineralisation.

The Authier North Property shares an extended claim border with Sayona Mining's Authier Lithium Project which hosts a JORC (2012) compliant Measured, Indicated and Inferred Mineral Resource of 17.1Mt at 1.01% Li2O (Lithium Oxide). The deposit is less than 700m from the shared claim boundary.

Sayona Mining published a revised Definitive Feasibility Study ("DFS" reported 11 November 2019 3) on their Authier Lithium Project. This DFS highlighted a net present value (discount factor 8%) of CAD$216 million and a pre-tax internal rate of return at 33.9% based on a Proven and Probable Ore Reserve estimate of 12.10 Mt @ 1.00% Li2O at a 0.55% Li2O cut‐off grade.

Additionally, on 11 January 20214, Sayona Mining announced a strategic partnership and offtake agreement with Piedmont Lithium Limited (ASX:PLL, Nasdaq:PLL) which includes a 25% ownership stake in Sayona Quebec (a wholly owned subsidiary of Sayona Mining), as well as 50% (60,000 tpa) offtake agreement for future production from the Authier Lithium Project. Sayona Mining reported they expect full commercial production of spodumene concentrate to commence between July 2023 and July 2024.

Very little historic exploration has been completed on the Authier North Property, with reports of five short drillholes completed in 1955 by Lyndhurst Mining Company Ltd (four of which returned elevated lithium and nickel assays), and only 4 rock samples which returned strongly anomalous chromium and nickel results (up to 0.42% Cr203 (Chromium (III) Oxide), and 0.21% nickel).

Duval East Property

The Duval East Property is located 3km east of the Authier North property and is located immediately east of a historical, non-compliant Duval lithium oxide resource. It is postulated that the geology containing the historical resource may extend towards the east onto the Duval East Property.

GLOSSARY

Batholith - large body of igneous rock formed beneath the Earth's surface by the intrusion and solidification of magma.

contact zone - Where two differing geological units are in contact with each other.

Dyke - An intrusion of igneous rock cutting across existing strata.

Granite - A coarse-grained (phaneritic) intrusive igneous rock composed mostly of quartz, alkali feldspar, and plagioclase.

Meta-sediments - Partially metamorphosed sedimentary rocks.

Pegmatite - An igneous rock showing a very coarse texture, with large interlocking crystals usually greater in size than 1 cm (0.4 in) and sometimes greater than 1 meter (3 ft). Most pegmatites are composed of quartz, feldspar, and mica, having a similar silicic composition to granite.

REFERENCES

1: https://tradingeconomics.com/commodity/lithium

2: Sayona Mining Limited, ASX announcement dated 1 March 2022: https://sayonamining.com.au/wp/wp-content/uploads/2022/03/SYA_Doubling-resource-base_1-Mar-22.pdf

3: Sayona Mining Limited, ASX announcement dated 11 November 2019: https://sayonamining.com.au/wp/wp-content/uploads/2019/11/SYA_ASX-Announ_20191111_Revised-Authier-DFS.pdf

4: Sayona Mining Limited, ASX announcement dated 11 January 2021: https://sayonamining.com.au/wp/wp-content/uploads/2021/01/SYA_ASX-Announ_20210111_Piedmont-Transaction.pdf

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.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 3,749,985 Earn-In Shares to be admitted to trading on AIM which is expected to occur on or around 19 July 2022 ("Admission"). The Earn-In Shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

Following Admission, the Company's issued share capital will comprise 1,480,786,146 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and may be used by shareholders as the denominator for the calculation by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.

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 has internal exploration programmes completed or underway, with results awaited, as outlined in the table below.

Exploration work programmes may also be underway within 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:

www.firstclassmetalsplc.com

www.goldenmetalresources.com

www.firstdevelopmentresources.com

Power Metal also holds a material investment in Kavango Resources plc with exploration updates available through their regulatory announcements and on their website:

www.kavangoresources.com

# subject to completion of acquisition announced 18.5.22 interest will increase to 87.71%