Power Metal Regulatory News (POW)

15 March 2021

Power Metal Resources plc

("Power Metal" or the "Company")

Canadian Silver Project - Commercial Update

Intention to Seek IPO for Project

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to provide a commercial update for shareholders covering the Silver Peak Project ("Silver Peak" or the "Project"), in British Colombia, Canada. The Project includes the Eureka-Victoria Silver Mine, the first Crown-granted mineral property in British Colombia.

The original agreement in respect of the Silver Peak project was announced on 14 September 2020 and may be viewed through the following link:

https://www.powermetalresources.com/n/n251/canadian-silver-project-option-exercised

Highlights:

· Power Metal has accelerated its earn-in to the Silver Peak Project and now holds a 30% Project interest. 

· A new Canadian company is being formed to hold a 100% interest in the property and Power Metal will retain its 30% interest in the Project through the new company. 

· Power Metal has agreed with its partners who hold the remaining 70% interest in Silver Peak to list the Project holding company on a recognised stock exchange and the process has now commenced with relevant paperwork being prepared in this regard. Further information will follow shortly with regard to the listing plans.

· Power Metal has agreed to pay the CAD$108,952 (£62,313) remaining under the exploration earn-in commitment of CAD$250,000 into the new Canadian company to extinguish that earn-in requirement. This payment will be made from existing cash resources. 

· Power Metal has also elected to satisfy the final earn-in payment to secure its 30% Project interest through the issue of 5,139,281 new ordinary shares of 0.1p in the Company ("Ordinary Shares") at a price of 2.225p and the issue of 2,569,641 warrants to subscribe for new Ordinary Shares at an exercise price of 2.89p and with a three year life to expiry from today's date. The Ordinary Shares and warrants issued were in accordance with the original agreement announced 14 September 2020 and further information in this regard is provided below.

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

"Alongside its extensive exploration activities Power Metal is intent on generating material organic value from corporate work in respect of its portfolio of interests. In just seven months since we engaged with Silver Peak we are now, with our partners, planning to move this project interest into its own independent listing.

The level of interest in quality silver projects is considerable and we believe that material value can be generated for Power Metal through the listing of Silver Peak.

Further information will follow with regard to our plans when we have concluded the important preparatory work for the listing.

Power Metal now has three project interests moving forward with planned IPOs including Silver Peak, Kanye Resources (the strategic joint venture with Kavango Resources plc) and the Australia gold joint venture (with Red Rock Resources plc).

We believe that these proposed IPOs could accelerate the crystalisation of value from the Company's projects into 2021, providing an earlier recognition of project value."

Acceleration to 30% Interest - Transaction Information

Balance of Exploration Earn-in Commitment

In the original agreement Power Metal was to pay CAD$250,000 against exploration expenditure at the Silver Peak Project. Previously Power Metal has paid CAD$141,048 leaving a balance outstanding of CAD$108,952.

As the Project is moving into a proposed listing process immediately Power Metal has agreed to pay the CAD$108,952 (£62,313) remaining under the exploration earn-in commitment directly into the new Canadian company to extinguish that earn-in requirement. This payment will be made from existing cash resources.

Final Earn-in Payment

Also in the original agreement Power Metal was able to pay a final earn-in payment amount of CAD$200,000 in a combination of cash and warrants or shares and warrants.

Power Metal has elected to satisfy the final earn-in payment through a shares and warrants payment as outlined below.

To secure its 30% Project interest Power Metal is to make a payment of CAD$200,000 (£114,349) through the issue of 5,139,281 new Ordinary Shares ("Final Payment Shares") to the Vendors of the Project interest (Michael Nugent and Jo Shearer). The number of shares to be issued is based on an agreed 7 day volume weighted average price of Power Metal shares (2.225p).

In addition, as per the original agreement the Vendors will also receive 2,569,641 warrants to subscribe for new Ordinary Shares ("Final Payment Warrants") exercisable at a price of 2.89p representing a 30% premium to the issue price of the Final Payment Shares. The Final Payment Warrants have a three year life to expiry from today's date.

Admission and Total Voting Rights

Application will be made for the 5,139,281 Final Payment Shares to be admitted to trading on AIM, which is expected to occur on or around 22 March 2021 ("Admission"). The Final Payment 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 1,143,017,211 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 (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 metals 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.