Power Metal Regulatory News (POW)

24 July 2023

Power Metal Resources PLC

("Power Metal" or the "Company")

Commercial Update

Power Metal Resources PLC (AIM:POW), the AIM listed metals exploration and development company, is pleased to provide a commercial update covering a number of corporate initiatives currently underway and to also provide a financial update with the latest available unaudited Gross Asset and Shareholders' Equity position of the Company as at 30 June 2023.

Highlights:

· Multiple corporate initiatives underway to optimise Power Metal's positioning ahead of a resource sector recovery with work advancing concurrently across various business interests.

· Accelerated exploration underway across the Company's Athabasca uranium interests in Saskatchewan, Canada and the Tati Goldfields project in Botswana.

· Intention to apply for OTC listing for easier trading of Power Metal shares on market by US investors.

· Appointment of Financial Adviser to Uranium Energy Exploration for their planned listing, the Company's first uranium project spin-out listing.

· Significant increase in Gross Assets and Shareholders' Equity since 30 September 2020 year end, in absolute terms and also per issued share, demonstrating that Power Metal has been generating value per share notwithstanding share dilution over the period.

Sean Wade, Chief Executive Officer of Power Metal Resources plc, commented: 

"I am very pleased to be able to update shareholders on these important developments. We are well aware of the challenging market conditions of late, and as such, it is important for us to demonstrate to shareholders that significant steps are being taken to position the Company in readiness for what we expect will be a considerable recovery in the junior resource sector.

"The planned application for an OTC listing will give us the opportunity to address a much wider international investor base and therefore substantially improve liquidity in the shares. We want to make it as easy as possible for people to invest and this is a significant step forward in that regard.

"We see significant potential demand for a pure-play uranium exploration vehicle and look forward to the planned listing of Uranium Energy Exploration. We are also excited about the planned listing of First Development Resources. Both events will, we believe, deliver considerable Balance Sheet expansion.

"As far as the Balance Sheet is concerned more generally, I am very pleased to update shareholders on where this stands as at 30 June 2023. We have continued to achieve excellent growth in Shareholder Equity since the 30 September 2022 year end, reflecting the successful IPO of Golden Metal Resources and other corporate activities. Importantly our Shareholder Equity per share has grown over recent years demonstrating that the financings undertaken have fed through to increasing value for shareholders.

"During the summer and autumn period, the Company is looking to finalise a number of value crystallisation events that we expect to further bolster the balance sheet.

"Finally, it is important to note that Power Metal is focused on achieving major metal discoveries across its portfolio of interests. In that respect, we are similar to many exploration companies. However, rather than expect our shareholders to bear the costs of all exploration through repeated rounds of equity financing, we are also focused on finding, through spin-out listings, joint ventures and disposals (principally for acquirer equity), multiple innovative financing structures for the costs of project management and exploration. We will continue to offer shareholders material exposure to the discovery upside through large equity holdings in our investee companies."

Corporate Initiatives

Power Metal has undertaken three project disposals to date leading to significant equity positions in Kavango Resources PLC (LON:KAV), First Class Metals PLC (LON:FCM) and Golden Metal Resources PLC (LON:GMET). Together these investments are currently valued at £6.7 million and represent a small proportion of the historic project interests previously held by the Company. 

The Company is eager to build a more extensive portfolio of investments through continuing disposals and recognises the potential for the value of the portfolio to grow considerably through this disposal activity and, as the junior resource sector recovers, through an appreciation of the value of its underlying investments.

At present, the Company is actively pursuing a number of corporate initiatives in the following business interests as summarised below. Shareholders should note, however, that there can be no certainty that the current initiatives underway below will lead to a successful conclusion.

In addition, the Company is actively involved in discussions in respect of exploration and development opportunities in Saudi Arabia, which are plentiful and offer high impact potential for the Company. Further information in respect of material developments will be announced in due course.

Accelerated Exploration

Alongside the above corporate initiatives, the Company is pursuing proactive exploration at a number of properties in and surrounding the Athabasca Basin, targeting uranium discoveries; and also, at the Tati Goldfields project in Botswana, targeting a significant gold discovery.

Further exploration focused updates are expected as material developments occur.

OTC Listing

The Company is pleased to announce that it is intending to apply for a listing on the US OTC market. The application will be subject to various regulatory approvals and an update on its progress will be provided in due course.

If successful, this important step will provide easier trading accessibility for US investors wishing to buy Power Metal shares on market and will, in the Company's view, potentially increase the liquidity of Power Metal share trading.

Appointment of Beaumont Cornish as Financial Adviser to Uranium Energy Exploration ("UEE")

The Company is pleased to announce the appointment by UEE of Beaumont Cornish Limited as Financial Adviser in respect to the intended listing of UEE on a recognised London exchange. The listing will be subject to the various regulatory approvals and an update will be provided in due course.

The UEE transaction details are being finalised and a further update to the market will be provided in due course. UEE will hold the Reitenbach and E-12 uranium properties in Saskatchewan, Canada currently 100 per cent owned by Power Metal. Additional selected interests from the current portfolio and external assets may be added to enhance the planned listing portfolio.

Financial Update

Power Metal is pleased to report that, on an unaudited basis, the Company Shareholders' Equity as at 30 June 2023 was £15.5m vs £10.2m, on an audited basis, as at 30 September 2022, demonstrating growth of 52 per cent*. 

The Company's Gross Assets total as at 30 June 2023 was £15.8m vs £10.7m, on an audited basis, as at 30 September 2022, demonstrating growth of 48 per cent*.

* The Consolidated Shareholders' Equity at 30 September 2022 was £11.7m and the Consolidated Gross Assets £14.6m. The Consolidation process is an accounting exercise that fully reflects the value of subsidiary company net assets , however the consolidation exercise is only conducted as part of the preparation of `power metal's interim and full year financial statements.

The Gross Asset and Shareholder Equity figures are accounting valuations based on cash, listed investments at market value on 30 June 2023 and the cost value of project acquisitions and project operational expenditures (corporate and exploration costs).

The Company and Consolidated Gross Assets and Shareholder Equity per issued ordinary share has been increasing each reporting period end since 30 September 2020, demonstrating that Power Metal has been generating value per share notwithstanding share dilution over the period. 

Since 30 September 2020, the Company (unconsolidated) Gross Assets per issued POW share have grown by 89 per cent and Company Shareholder Equity per share by 105 per cent to 30 June 2023.

The growth outlined above has been achieved despite extremely challenging market conditions over recent years and without the benefit of stronger listed asset valuations that would ordinarily occur in more normalised or positive market conditions.

In addition, accounting valuations, other than for cash or listed investments, Gross Assets and Shareholder Equity do not reflect the full value of business interests at the reporting date, many of which, in the Board's view, are now worth considerably more than their accounting valuation at 30 June 2023. That value will be more accurately reflected as disposals of project interests are undertaken at market value.

For clarity, included within the above Gross Asset valuation at 30 June 2023 is cash and listed investments of c. £10.0m.

For further information please visit https://www.powermetalresources.com/ or contact:

NOTES TO EDITORS

Power Metal Resources plc - Background

Power Metal Resources plc (AIM:POW) is an AIM listed metals exploration company which finances and manages global resource projects.

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 grow the Company or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.