Power Metal Regulatory News (POW)

01 June 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

First Development Resources - Pre-IPO Financing £1,125,000

Power Metal Subsidiary First Development Resources Raises £1,125,000 in Pre-IPO Financing to Fund its Planned IPO and Operational Expenses

Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces its subsidiary First Development Resources Limited ("First Development" or "FDR") has undertaken a £1,125,000 Pre-IPO financing ("Financing").

FDR is planning to list on the London capital markets in Q3 2022 (the "IPO") and is focussed on district-scale exploration opportunities in Australia.

HIGHLIGHTS

· First Development has raised £1,125,000 through a Pre-IPO financing undertaken with SI Capital Limited, corporate broker, through the issue of 16,866,566 new First Development ordinary shares of 1 pence each ("FDR Ordinary Share") at a price of 6.67p per Ordinary Share, which will represent 27.14% of the issued share capital of First Development on completion of the Financing.

· 50% of Financing monies will be payable to First Development by 10.06.22 and 50% by 10.07.22 whereupon Financing completion will occur ("Completion") and all shares will be issued to Financing participants shortly after Completion.

· Power Metal has subscribed for £75,000 of the Financing, subscribing for 1,124,437 FDR Ordinary Shares ("POW Subscription").

· Following Financing Completion, Power Metal will hold a total of 38,605,696 FDR Ordinary Shares representing 62.12% of issued share capital First Development.

· On the basis of issued share capital of FDR on Completion of the Pre-IPO Financing the current valuation of First Development will be £4.125 million, and Power Metal's 62.12% holding will be valued at circa £2.562 million.

· The monies raised will enable First Development to fully self-finance its operations including IPO listing advisory costs, corporate expenses and various project expenditures.

· Paul Johnson, Chief Executive Officer of Power Metal has subscribed for £50,000 (749,625 FDR Ordinary Shares) in the Financing.

· No warrants are included automatically with the Financing however should warrants be offered as part of the planned IPO financing, participants in this Pre-IPO Financing will receive warrants on the same terms.

Tristan Pottas Chief Executive Officer of First Development Resources Ltd commented:

"The Pre-IPO Financing provides FDR with the necessary working capital to confidently push ahead with business operations including its planned listing on the London capital markets.

The FDR business has been built around Australian exploration and notably, what we believe are high impact opportunities in Western Australia's Paterson Province and the Northern Territory.

We have been analysing the extensive historical exploration data in and around our projects since early 2021, securing the benefits and knowledge from work undertaken by previous licence holders.

Using this core data and the latest in technological innovation in resource exploration we have been building targets for next stage work, including gold-copper drill targets at our flagship Wallal Project in the Paterson, and uranium-rare earth element and potential lithium targets at our Selta Project in the Northern Territory."

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

"The successful Pre-IPO Financing reported in today's announcement is the first decisive step on FDR's journey to becoming an independent listed vehicle. We believe the projects which make up FDR's portfolio present a compelling investment proposition which we look forward to watching develop under the management of the FDR board.

The Pre-IPO Financing means First Development becomes financially self-sufficient and Power Metal will no longer be required to fund FDR operations in the period leading up to the planned IPO and instead will become a strategic FDR shareholder.

Of particular note is that Power Metal has now seen three of its project packages find their own independent corporate pathway, management and financing including:

- Disposal of the Company's Schreiber - Hemlo interests in Ontario, Canada, into First Class Metals plc ("FCM") in September 2021. Power Metal currently has a 36.3% interest in the issued share capital FCM, which secured Pre-IPO financing in September 2021 and is seeking a planned listing this quarter.

- Golden Metal Resources plc ("GMT") focused on exploration and development interests in Nevada, USA, currently 83.13% Power Metal owned. GMT secured Pre-IPO financing in December 2021 and is seeking a planned listing this quarter.

- As announced today, First Development Resources, currently 82.78% Power Metal owned (62.12% following Completion) focused on Australian exploration interests and seeking a listing in Q3 2022."

We continue to work on the potential spin-out listing of other business interests. This includes our Victorian Goldfields joint venture with Red Rock Resources plc (LON:RRR) and held through New Ballarat Gold Corporation plc ("NBGC") where we hold a 49.9% interest." 

FDR EXPLORATION INTERESTS

FDR Australia holds the following exploration licence interests:

Wallal Project (Wallal Main-E45/5816 - 390km2 - granted), (Wallal West 1-E45/5853 96km2 - granted) and (Wallal West 2 - E45/5880 - 86km2 - granted).

A comprehensive geophysical review has identified three magnetic bullseye anomalies located under Phanerozoic sedimentary cover which are interpreted to have possible geological similarities major Au-Cu deposits within the Paterson Province including Winu (Rio Tinto) and Havieron (Newcrest Mining-Greatland Gold joint venture).

Braeside West Project (E45/5854 - 137km2 - one granted licence)

In-depth desktop analysis of historic exploration data is currently underway on the Braeside West Project. A recent base-metal discovery by neighbouring company Rumble Resources Ltd (ASX:RTR) has enhanced the overall prospectively within the Braeside West Project area as it is hosted within a similar geological environment to that of Rumble Resources discovery.

Ripon Hills Project (E45/5088 - 42km2 - one granted licence).

The Ripon Hills Project is prospective for base-metal and gold mineralisation associated with deep-seated north-south oriented fault structures which run through the Ripon Hills Project area. In-depth desktop analysis of historic exploration data is currently underway over the project.

Selta Project (EL 32737, EL 32738, EL 32755 - 1,575km2 - three granted licences)

The Selta Project is located in an area considered to be highly-prospective for uranium and rare earth element mineralisation. FDR recently completed an in-depth review of all geological, geophysical and geochemical data which also identified the potential for lithium, gold and base-metal mineralisation as well as the possibility of tin-tantalum-tungsten rich pegmatites.

IPO AND LISTING PROCESS

FDR is seeking a listing on the London capital markets and is working with advisors in this regard and is targeting a listing on the London capital markets in Q3 2022.

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.

Power Metal Exploration Programmes Underway/Results Awaited

Power Metal has exploration programmes completed or underway, with results awaited, as outlined below:

* Reducing to 62.12% after Completion of the Pre-IPO Financing

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