Power Metal Regulatory News (POW)

3 November 2022

Power Metal Resources PLC

("Power Metal" or the "Company")

Kalahari Key Botswana - Acquisition & Drilling 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 the acquisition of an additional 58.7% interest in Kalahari Key Mineral Exploration Pty Limited ("Kalahari Key" or "KKME") (the "Transaction").

The steps outlined below will result in Power Metal holding an 87.71% interest in Kalahari Key, which will hold a 100% interest in the Molopo Farms Complex Project (the "Project", "Molopo Farms" or the "MFC Project") targeting a large-scale nickel-platinum group metal ("PGM") discovery in southwest Botswana. 

The conditional acquisition was originally announced on 18 May 2022 which may be viewed through the following link:

https://www.londonstockexchange.com/news-article/POW/kalahari-key-botswana-acquisition/15458701

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

"Today Power Metal announces the next steps towards completion of the acquisition of Kalahari Key shares and the remaining steps that will take Power Metal's interest in Kalahari Key and therefore Molopo Farms to 87.71%.

Drilling at Molopo Farms continues successfully with the first two drill holes now complete and downhole geophysics on the first hole underway. The drill rig is moving to target area T1-14 in the coming days to commence the third diamond drillhole targeting a superconductor identified there by a recently completed moving loop electromagnetic survey.

 A further detailed operational update is expected in the near term."

DIAMOND DRILL PROGRAMME UPDATE

The first two holes into target T1-6 have been successfully completed as follows:

- DDH1-6(B) drilled to 650.0m

- DDH1-6(B)(2) drilled to 300.2m

Downhole geophysics is currently underway at DDH1-6(B).

The drill site has been prepared at target T1-14 ready for diamond drilling into the electromagnetic superconductor target identified. Drilling at T1-14 is expected to commence shortly.

The Company expects to release a further detailed operational update covering the latest developments at Molopo Farms in the near future.

ISSUE OF CONSIDERATION SHARES

Following the receipt of regulatory approvals for the Transaction as announced on 28 October 2022 Power Metal and as outlined in the original Transaction announcement of 18 May 2022 (see link above), Power Metal will now issue the following consideration to the shareholder of Kalahari Key selling their shares to Power Metal (the "Vendors"):

Initial Consideration:

Initial consideration of £807,348 payable through the issue to the Vendors of 46,134,171 new ordinary Shares of 0.1p each in the Company ("Ordinary Shares") at an issue price of 1.75p per new Ordinary Share ("Consideration Shares") and warrants over 46,134,171 new Ordinary Shares at a 3.5p exercise price with an expiry date of 18 May 2024 ("Consideration Warrants").

With respect to the Consideration Warrants, Power Metal will hold an acceleration right, whereby should the volume weighted average Power Metal share price exceed 7.0p for 5 trading days, Power Metal has the right to serve written notice to the Vendors of 14 days to exercise and pay for the Consideration Warrants or they may be cancelled.

Further Consideration:

In the event, that by 18 May 2024 Kalahari Key or the MFC Project is sold for US$10million or greater, or a joint venture (or earn-in) agreement is signed with a potential third party where the potential project spend is US$10million or greater, Power Metal will issue the Vendors with further warrants over 46,134,171 new Ordinary Shares at an exercise price of 5.0p with a 2 year life to expiry ending 18 May 2024 ("Further Consideration Warrants").

In respect of the Further Consideration Warrants Power Metal will hold an acceleration right, whereby should the volume weighted average Power Metal share price exceed 10.0p for 5 trading days, Power Metal has the right to serve written notice to the Vendors of 14 days to exercise and pay for the Further Consideration Warrants or they may be cancelled.

CONVERSION OF PROJECT EARN-IN

Power Metal is working with Kalahari Key to issue a further 17,033 Kalahari Key shares to Power Metal to extinguish its previously secured 40% earn-in to the Molopo Farms Complex Project and restore Kalahari Key to an effective 100% interest in the MFC Project. 

New Power Metal Holding in Kalahari Key

Following the completion of the above steps ("Completion") Power Metal's holding in Kalahari Key will amount to 37,348 shares or 87.71% of Kalahari Key issued share capital as follows:

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 46,134,171 Consideration Shares to be admitted to trading on AIM which is expected to occur on or around 10 November 2022 ("Admission"). The Consideration 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 1,660,789,092 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.

Further information in respect of Molopo Farms may be viewed on the Company's website through the following link:

https://www.powermetalresources.com/project/molopo-farms-complex/

In addition, photographs and videos from the Project are and will be available on the Company's website gallery section, through the following link:

https://www.powermetalresources.com/investors/gallery/molopo-farms-complex-botswana/

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 multiple internal exploration programmes completed or underway, with results awaited. The status for each of the Company's priority exploration projects is outlined in the table below.

# following completion of administrative processes for share transfer and restructuring

Exploration work programmes may also be underway within Power Metal investee companies and 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. These interests are summarised in the table below: