Kalahari Copper Belt - Exploration Update

14 May 2021

Power Metal Resources PLC

("Power Metal" or the "Company")

Kalahari Copper Belt - Kanye Resources Exploration Update

Extensive anomalies identified, including seven AEM conductive targets

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide an exploration update in respect of the South Ghanzi Project which is part of the Kanye Resources ("Kanye") Botswana focussed corporate vehicle Strategic Joint Venture ("SJV") with Kavango Resources plc ("Kavango")(LON:KAV) who are the operator of the SJV, see announcement of 29 March 2021.

The South Ghanzi Project ("South Ghanzi" or the "Project") is focussed on exploration for copper-silver deposits on the Kalahari Copper Belt ("KCB"), Botswana.

Further to the completion of over 1,200 line-km of airborne electromagnetic ("AEM") geophysics survey flown by SkyTEM Surveys ApS ("SkyTEM") over South Ghanzi (announced 17 March 2021), the results of AEM data processing and interpretation have delineated seven conductive anomalies constituting high priority targets for further work.

Follow up ground-based investigation of AEM conductive anomalies has delivered encouraging results. Where existing soil sampling results coincide with an AEM anomaly (Target A1 named "Acacia") there is a close positive correlation between elevated copper ("Cu") and zinc ("Zn") results in soil geochemistry, a conductive anomaly and regional geological mapping. 

The soil geochemical survey lines will now be extended to provide further coverage and resolution over A1, and additional soil surveys will be placed over the remaining conductive anomalies.

The additional soil data in conjunction with geological logging of existing water borehole rock chips, the AEM results, and further geological modelling will help fine-tune the placement of drill holes in a planned programme to test emerging high priority targets for copper mineralisation later in 2021 as outlined below.

These findings align closely with previous fieldwork conducted and the established regional exploration model for the discovery of major copper/silver deposits within the KCB.

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

"We are extremely pleased with the exploration progress made by our joint venture partner Kavango at the South Ghanzi copper-silver project, centrally located within the burgeoning Kalahari Copper Belt. The exploration work completed over the last 12 months at South Ghanzi has been carried out in a systematic and disciplined manner which has paid off with the discovery of at least seven highly compelling exploration and drill targets.

Power is particularly encouraged by the 4km x 4km Acacia target, as it possesses not only a high conductivity signature detected by the AEM survey, but also almost perfectly coincident Zn- and Cu-in-soil anomalies, which are key signatures typical of nearby copper-silver discoveries within the Belt.

The exploration story at South Ghanzi continues to progress at pace and we eagerly await the next phase of results and drill testing of several of these high-priority targets."

Technical Summary

Ø Seven conductive, kilometre-scale anomalies defined by the processed SkyTEM AEM survey data:

- Each conductive anomaly represents an area of focus for follow-up geochemical sampling and drill testing.

- Initial data interpretation suggests a range of target depths of 40m to 400m for exploration drilling.

- Follow-up work includes additional soil sampling and geological modelling ahead of a drilling programme planned for later in 2021.

Ø Three of the AEM conductors are associated with interpreted anticlines/fold structures. These are the highest priority targets for further exploration.

Ø Target A1 ("Acacia") is a 4km x 4km conductor on the northern boundary of the PL 036/2020 licence area:

- Located within an interpreted fold "nose", which is plunging southwest.

- Soil geochemistry directly over the anomaly demonstrates elevated levels of copper (>42ppm) and zinc (>75ppm) relative to background.

- Zinc is believed to be a key pathfinder element for the discovery of copper/silver deposits within the KCB.

Ø Target G ("Morula") is estimated to be about 2km wide with at least 12km of strike on a south-westerly trend along the central backbone of licence PL 036/2020:

- AEM data and the soil geochemistry suggest this target possibly represents the mineralised southern limb of the "Morula" fold.

- Subject to further infill soil survey lines and verification, the soil geochemistry anomaly along the Morula target holds the potential to extend over 12km based on the geophysical data and existing results from seven 4km long soil sample lines (at 500m line-spacing and 100m sample points). Four survey lines currently intersect the southwest of Morula with three intersecting the northeast. The two groups of soil sample lines are currently 7km apart.

- All soil sample lines returned readings with significant concentrations of copper (38ppm to 62ppm) and zinc (59ppm to 111ppm) where they cross the 12km long Morula target.

- Seven infill soil sample lines are planned at 1km spacing, to test the extent of elevated copper and zinc across Morula.

Ø Target B ("Baobab") is a 2km x 3km closed conductor, about 1km south west of the Morula fold and 4km south east of Ghanzi town within PL 036/2020:

- The Target sits across the "nose" of a second major "opposing" fold, interpreted to be on the same stratigraphic horizon as Acacia.

- Baobab is in a very encouraging geological setting and a soil geochemical survey is planned in the near term.

Ø Target E ("Elephant") lies in the southeast corner of PL 037/2020. It is a broad, 2.5km wide conductor with a strike of at least 6km and open at both ends:

- Unlike most of the other targets, the main body of the Elephant anomaly is interpreted to be between 400 and 600m below surface.

- A number of faults intersect the main body, giving rise to several close surface conductors, which could be sampled with shallow drilling.

- Soil geochemistry demonstrates elevated levels of copper and zinc across this anomaly.

Ø 3D modelling of the SkyTEM AEM data is planned to include re-logging of water borehole rock chips and historical drillholes.

Ø An Environmental Management Plan ("EMP") application is progressing. Upon award of the EMP, Kanye plans to initiate exploration drilling on the South Ghanzi Project.

Exploration Rationale

The South Ghanzi licences (PL 036/2020 and PL 037/2020) cover an area of 1,294 km² and lie within the Central Structural Corridor of the KCB immediately south of the town of Ghanzi.

Sedimentary horizons hosting copper/silver mineralisation in the KCB are known to be conductive and AEM surveys are a recognised and tested exploration method for identifying high priority drill targets.

Kanye's strategy in the KCB is to follow-up conductive AEM targets with proven exploration methods including soil geochemical sampling, geological/structural mapping, and three-dimensional data inversion modelling. The correlation of positive zinc and copper soil geochemistry in conducive structural settings with positive AEM results is a successful exploration vector for drill targeting.

The current understanding of the regional lithology and stratigraphy of the KCB has helped with the identification of a number of smaller anticlines associated with the AEM conductors which, subject to further verification and soil sampling, could form the basis for multiple potential drill targets across the South Ghanzi Project.

AEM Survey Results

SkyTEM Ltd, a Danish geophysical contractor, conducted a total of 1,271 line-kms of AEM survey over the South Ghanzi licences (PL 036/2020 and PL0 37/2020) in February 2021. The AEM surveys, flown together with airborne magnetic surveying, were carried out on lines 200m apart with an approximately North-South orientation.

The survey blocks were based upon analysis of magnetic data, soil geochemistry, remote mapping of geological structures and field mapping of the stratigraphy and structural geology.

The AEM surveys defined seven distinct conductor anomalies across both licences. These appear to be mostly related to fold hinge structures and are interpreted to be confined to the interface between the Ngwako Pan and D'Kar Formations. The coincidence of AEM conductors with copper and zinc soil anomalies is an important exploration vector.

- Copper is a less mobile element in soil, so the identification of elevated Cu readings over background levels through Kalahari Cover is promising.

- As a more mobile element, zinc is believed to be a key "pathfinder element" in the search for major copper/silver deposits. Zinc has been successfully used as an exploration vector for other discoveries in the KCB.

The most significant AEM conductor (Acacia) lies just south of the northern boundary of PL036/2018 about 9km SW of Ghanzi town. The conductor is approximately 4km x 4km in area and is made up of at least 4 individual pods. The conductive material appears to exist almost from surface to an interpreted depth of no more than 200m. The conductor lies almost entirely within a fold "nose", which is plunging to the SW and within the D'Kar Formation just above its contact with the Ngwako Pan Formation.

To date 16 line-km of soil sampling has been completed over Acacia. Results demonstrate extensive copper and zinc anomalies over the conductive target with average results over 42ppm copper and over 75ppm zinc.

The Morula target lies just to the south of Acacia and is also supported by a strong copper in soils anomaly. The conductor is at least 2km wide and over 12km along strike (currently open at each end).

This target probably represents the southern limb of the same fold but appears to be sheared along a thrust fault. This sheared limb has been cut by a number of NNE trending structures (faults). Such faults are known to be associated with mineralisation elsewhere on the KCB.

The third priority conductor (Baobab) is 2km x 3km in area and is contained within the "nose" of a second major fold interpreted on the same stratigraphic horizon as the Acacia target. The size and geological setting for this conductor is encouraging. Kavango will prioritise soil sampling of this area in the coming weeks.

The fourth priority conductor (Elephant) lies in the southeast corner of the South Ghanzi Project and is also supported by a strong copper in soils anomaly. The conductor is at least 2.5km x 5km in area and remains open along strike.

Unlike the other targets, the main body of the Elephant anomaly is interpreted to be between 400 and 600m below surface. A number of faults intersect the main body, giving rise to several close surface conductors which could be sampled with shallow drilling. The close surface conductors are the higher priority exploration targets.

Environmental Management Plan Update

The EMP application process was initiated in February. The award of an EMP is a prerequisite for exploration drilling in Botswana. The Department of Environmental Affairs ("DEA") has accepted the project brief for the EMP. A consultant, working on behalf of Kavango, will now engage and consult with local farmers before submitting a report to the DEA to progress the application.

FURTHER INFORMATION

Strategic Joint Venture - Group Structure and Interests

The SJV currently has a 100% interest in the two Ghanzi South prospecting licences ("PLs") prospective for copper/silver mineralisation on the KCB (1,294km2) and the two 'Ditau Project' PLs south of the town of Kang in central Botswana (1,386km2). The Ditau Project is prospective for minerals associated with carbonatite intrusions including rare earth elements. All four PLs are currently being transferred into the name of Kanye Resources Botswana (Pty) Ltd from Kavango Minerals (Pty) Ltd.

Kanye Resources Botswana (Pty) Ltd, incorporated in Botswana, is a 100% subsidiary of UK registered Kanye Resources plc and is the SJV initiative between Kavango (50%) and Power Metal (50%). As announced 17 March 2021, a listing of Kanye Resources plc on the London Stock Exchange is planned for later in the year.

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.

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 and base 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.

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.