#POW Power Metal Resources – Quarterly Business Operational Update

Work continues on technical analysis following the drill programme completed in early 2021. Significant nickel sulphides have been identified in the drill core with assays up to 1.7% nickel and 0.55g/t platinum.  Further selected samples are to be assayed for additional nickel sulphide and PGE content.

Discussions are in process with regard to corporate developments in respect of the Molopo Farms Complex interest together with next stage exploration including additional drilling.

Key Potential Value Drivers: Confirmation of further nickel sulphide and platinum group elements (PGEs) from assay testing, outcome(s) from corporate discussions and launch of next stage exploration.

South Ghanzi Project is held within Kanye Resources plc, a joint venture vehicle 50% held by Power Metal and 50% by partners Kavango Resources plc (LON:KAV) who are the operators of the project.

Drill target refinement continues at the South Ghanzi Project, together with initial exploration at the recently acquired South Ghanzi Extension Licences and the Mamuno Licences.  Together, the ground footprint in the Kalahari Copper Belt (KCB) totals 4,257km².

Approval of the Environmental Management Plan (EMP) for South Ghanzi is being sought to enable drilling to be undertaken.

Further consideration is being given by the joint venture partners with regard to the planned IPO of Kanye Resources plc and an update in this regard will be provided in due course.

Key Potential Value Drivers: Approval of the EMP, drilling of South Ghanzi targets and initial exploration findings from the recently acquired KCB licences.

Ditau Camp Project is also held within the Kanye Resources plc joint venture as outlined above.

To date three specific targets have been identified for drilling, which is expected to commence in Q4 2021.

Further exploration work is continuing on the ground including ground based geophysical surveys.

Key Potential Value Drivers: Drilling of Ditau targets and results from ongoing exploration.

The company recently completed its Phase I and Phase II work programmes, which included high-resolution soil sampling (1,107 samples collected), mapping and prospecting (49 rock samples collected), as well as ground-based geophysics including high-resolution magnetic and radiometric surveys.

The results have highlighted five target areas across the two licences, which are defined by kilometre-scale geochemical anomalies that are coincident with various geological structures that were highlighted by the ground geophysical surveys.

The company is now in the preparatory stage for an inaugural drilling campaign, which will include roughly 1000m of reverse circulation (RC) drilling across the various target areas.

Drilling is expected to commence during the first week of October subject to final preparations.

Key Potential Value Drivers: Results of ongoing exploration including drill results.

Next stage exploration is drill testing of the 6.8km copper-cobalt geochemical anomaly identified from previous exploration programmes.

Preparations are continuing for drilling including target refinement and sourcing of appropriate contractors.

Drilling is expected to commence in Q4 2021.

Key Potential Value Drivers: Drill testing of copper-cobalt targets.

The next stage of exploration is deep diamond drill testing at Haneti targeting nickel sulphide – PGE mineralisation.

Final preparations are underway for this drill programme which is targeted to commence in Q4 2021.

Key Potential Value Drivers: Drill testing of nickel sulphide – PGE targets.

Power Metal has an interest in 49.9% of New Ballarat Gold Corporation plc (“NBGC”) held in joint venture with 50.1% held by Red Rock Resources plc (LON:RRR).

Through its Australian operating subsidiary, Red Rock Australiasia Pty Ltd, NBGC has a strategic land  footprint in the Victoria Goldfields, Australia.  The footprint comprises 1,458m² of ground under 9 licence applications and 7 granted licences covering 848km². 

Extensive exploration is continuing, combining desk-based research with field exploration.  Drill targets have been identified following additional discoveries of historic mine workings within the granted licence area. A diamond drill programme has been scheduled for the end of the year.

The joint venture partners are working together to expedite a listing of NBGC on the London capital markets.  The new board of NBGC has been selected in readiness for listing and NBGC has appointed all key advisors in this regard.

Key Value Drivers: Material findings from ongoing exploration, further licence grants and the listing of NBGC on the London capital markets.

During Q2/Q3 2021 Power Metal assembled a strategic package of exploration and development interests in Nevada USA under the corporate vehicle Golden Metal Resources Ltd (“Golden Metal”). Golden Metal’s project portfolio includes:

–  Golconda Summit – an exploration property targeting high grade near surface gold, where Power Metal has a right to earn-in to a 100% interest.

Permit has now been received allowing a trenching, sampling and mapping work programme to be undertaken. Final preparations are in hand and exploration is expected to commence at Golconda Summit in October.

–  Garfield/Stonewall – two 100% owned exploration properties targeting gold-silver mineralisation. 

Initial exploration now launched includes the processing of various Aster and Worldview-3 hyperspectal satellite imagery datasets over the Garfield Property, which will allow for the remote mapping of various iron and hydrothermal alteration minerals.

–  Pilot Mountain – an option to acquire a 100% interest in an advanced exploration and development property with a substantial JORC compliant tungsten, copper, silver and zinc resource.

Due diligence is fully underway to enable option exercise to proceed by the date of option expiry on 29/10/2021.

Golden Metal is seeking a listing on the London capital markets and is currently assembling its advisory team to complete the listing documentation.

Key Value Drivers: Positive findings from exploration work at Golconda Summit and Garfield properties and the listing of Golden Metal on the London capital markets.

Power Metal is to acquire a 75% interest in First Development Resources Pty Ltd (FDR Australia), an Australian company holding five exploration interests in the Paterson Region of Western Australia.

Initially the licences included one granted exploration licence and four licence applications.

Power Metal has received confirmation that two additional exploration licence applications have now been granted (Wallal Main E45/5816 and Wallal West 2 E45/5880), two of the three strategic Wallal Project licences, with the remaining licence (Wallal West 1 E45/5853) expected to be granted imminently.

The Wallal Project is the focus of ongoing exploration work including 2D seismic geophysics reprocessing and a passive seismic survey which is intended to help refine drill targeting within the Wallal Main Licence area.

Drill targets comprise magnetic bullseye targets of similar geological nature to that drill tested by Greatland Gold plc leading to the discovery of the Havieron deposit in the Paterson Province.

The acquisition which is now proceeding will trigger the acquisition of FDR Australia by First Development Resources Limited, which Power Metal plans to list on the London capital markets.

Key Potential Value Drivers: Licence grants, formal acquisition of FDR Australia, listing in London and deep drill testing of magnetic bullseye targets.

Power Metal announced the disposal of its Schreiber-Hemlo interests to First Class Metals (“First Class”) on 07/09/2021 for consideration of £1mn.  With the shares received on the disposal, and following a subscription by Power Metal of £28,764 at £3/share in the pre-IPO raise, Power Metal currently has an interest of c.38% in First Class (after reflecting the c.£400,000 pre-IPO raise undertaken by First Class).

First Class is seeking a listing on the London capital markets and provided an update to shareholders on 27/09/2021 confirming considerable progress from both from exploration and corporate perspectives.

Power Metal is working with First Class to support their listing plans and looks forward to reporting further progress in this regard. On listing Power Metal will be a significant shareholder in First Class.

Key Potential Value Drivers: Exploration updates from the Schreiber-Hemlo interests and listing of First Class on the London capital markets.

Power Capital Investments  (Power Capital) is currently in the early stages of three potential new projects namely:

–  Gold exploration in Europe where Power Capital has a signed agreement with a third party.  To date assay testing of samples has been undertaken demonstrating high-grade gold mineralisation in hand samples. Currently Power Capital is funding the third party to lodge licence applications covering the area of interest.  Thereafter the plan is to launch additional exploration programmes.  Power Capital may earn-in to a 50% interest by expending €100,000 on exploration and corporate costs.

–  Consideration of an African rare earths initiative with a specialist  geological team employing new technology to identify rare earth deposits in Africa.

Limited information will be provided in respect of the above Power Capital projects to preserve commercial sensitivity, notably where work is needed to secure exploration licences or to protect commercial partners.

At present none of the Power Capital projects above are considered material in the context of the Power Metal business overall.  Should they become so, further disclosures may be necessary.

NOTE: A maximum investment level of £100,000 per opportunity has been established and a minimum 50% Power Capital holding interest in any opportunity following Power Capital’s investment.

Key Potential Value Drivers: Advancement of any Power Capital investment into full Power Metal project status or spin-out IPO opportunity.

Further to the announcement of 21 September 2021, Andrew Bell, Chairman of Power Metal stepped down from the board yesterday to focus on the large spin-out IPO of NBGC (see above).

Current Non-executive director Scott Richardson Brown is to become Interim Chairman pending the appointment of a new Chairman in due course.

The Company operates a hub and spoke operational management style coordinating and controlling global exploration operations from its UK Head Office.

In 2021 with the growth of our business portfolio, and the success of exploration and commercial ventures, we have built the Head Office team with exploration management, commercial management and financial and administrative support.

We are also seeking to optimise resources, and our Head Office team will be deployed to support spin-out vehicles, managerially and administratively, helping to reduce the operational costs to Power Metal of new team members.

Power Metal has a growing balance sheet which, as with many other exploration companies, has a core of capitalised exploration costs for ongoing exploration projects.

Power Metal can monetise its operational interests as demonstrated by the disposal of the Schreiber-Hemlo business interests (see above).

And importantly, Power Metal is planning to spin-out other business interests into listed vehicles, and any new listings will add materially to the Company’s balance sheet.

Excluding all of the above the Company also holds working capital, comprising cash and currently listed (tradable) investments, which funds day to day operations.  As at 24/09/2021 this amounted to working capital of £2.51million.

As the financial year comes to a close Power Metal is working with One Advisory, its financial and compliance service partner, to prepare for the annual audit, with financial results for the year ended 30 September 2021 expected to be published in February 2022.

As a responsible exploration company Power Metal is further bolstering its Environmental, Social and Governance initiatives and will be publishing further information in the coming months covering the various measures implemented.

In 2020 the Company undertook a Finance, Administration and Compliance Protocols and Procedures Review to further improve its underlying Governance and is now further bolstering this with detailed business process mapping across the Company.  These measures are considered necessary as the Company expands in size, scale and breadth of corporate and exploration activities.