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Power Metal Resources PLC (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces a strategic business update providing the latest position of the Company and its forward objectives, together with director changes to lead Power Metal into the next stage of its business development.

STRATEGIC BACKGROUND

Company Historical Strategy

§ Power Metal has undergone rapid growth over the past four years.  The scale of the Company’s acquisition, exploration and corporate development activities over recent years positions the Company very well to generate significant value at this point in the cycle.

§ From an initial concentration on west and central Africa in 2019 the Company now has direct and indirect exposure to strategic resource exploration projects in secure jurisdictions in North America, Africa and Australia, across a commodity suite with metals that are demonstrating increasingly critical global demand.

§ The work to build the Company has been carefully completed to a high standard and during a highly volatile period for the junior resource sector.  That time has been used to accumulate and advance interests whilst valuations in the sector have been modest and in readiness for stronger conditions during a junior resource sector recovery, as we have seen many times in previous cycles.

Building a Strong Management and Operational Team

§ Power Metal has built a strong UK based corporate team who are managing the key areas of geology, company management, finance, compliance and communications.  The Company also works with established and capable UK advisors and also in-country teams to conduct project-based operations in the various jurisdictions in which it operates.

§ Together, the team have created a professional and disciplined operational core to oversee the Company’s global interests, and to manage the extensive field operations and corporate activities completed and underway.

§ By necessity and to further build the momentum of the Company with wider and impactful strategic partnerships, certain Board and senior management changes are to be implemented as outlined below.

Focus of Operational Activities and Strategic Partnerships

§ Power Metal will apply greater focus to its operational activities, seeking the efficient completion of spin-out IPOs and project disposals and concentrate exploration on strategically important retained projects. This increased focused is expected to more rapidly build value for shareholders.

§ The size and scale of the Power Metal business means it is ready for partnerships at project and corporate level with larger mining companies and internationally significant sector funds and institutions.

FOCUSING POWER METAL

An overview is provided on the status of all Power Metal project interests and vehicles later in this report.  It is important to recognise the Company’s strategic interests include but are not limited to:

Creating a Substantial Uranium Business

The Company is to build a greater focus on its strategic uranium business and seeks to become the leading uranium exploration and development company in London.

§ The initial focus is the Company’s 100% interest in a 967km² uranium project footprint in the Athabasca Basin area of Saskatchewan, Canada, over 16 properties (2 properties under disposal agreements).

§ Power Metal is looking to efficiently complete project staking and acquisition of uranium properties in the Athabasca Basin region to add to its existing portfolio and to secure high impact uranium opportunities globally should they meet the Company’s exacting investment criteria.

§ Power Metal will also complete, communicate and implement plans for extensive exploration across retained uranium properties in 2023.

Uncovering District Scale Nickel and Gold Systems in Botswana

The Company will seek to expedite the release of results for priority exploration projects already underway and focus on rapid advancement of strategic Botswana interests. These include:

§ 87.71% interest in the district scale Molopo Farms Complex Project in Botswana, with a 2,402m diamond drill programme completed, with geological feeder zone model confirmed and nickel sulphides already confirmed, two significant elements from exploration drilling undertaken, combined with historical work, with assay results awaited.

§ 100% interest in the Tati Project in Botswana with an 8km long gold-in-soil anomaly, where reverse circulation drilling in 2022 confirmed up to 47.1g/t gold in a one metre composite sample with extensive follow-on exploration currently underway, and the first stage of field work (geophysics and trenching) now completed, with geophysical interpretation and assay results awaited.

Driving Planned IPO Vehicles Forward

The planned IPOs have taken longer than originally anticipated.  There are reasons behind this including the extensive preparatory work in the pre-IPO process, the need to complete work in all vehicles to enable immediate and proactive exploration campaigns upon listing. Also proper recognition of  market conditions during 2022 is a factor, a year which saw a severe decline in investor sentiment in the junior resource sector, with few IPOs occurring in the sector generally.

Preparations for the first three IPO vehicles (see below) are now essentially complete and the vehicles ready for listing have fully prepared proactive exploration plans in place.  We also believe there is increased investor engagement and interest in 2023 generally and we are seeking to complete all transactions as quickly as possible and are taking all necessary steps to accomplish this.

Therefore, the focus commercially is to accelerate completion of all remaining disposals and spin-out IPO-listings for all relevant projects and vehicles. These include but are not limited to the following vehicles in which Power Metal has a strategic interest:

§ Power Metal holds an 83.13% interest in Golden Metal Resources PLC (“GMR”) which through local subsidiaries holds the Pilot Mountain project containing the largest known critical tungsten metal mineral resource estimate in the USA and Golconda Summit a gold exploration target for a Carlin-style gold discovery. GMR is undertaking a planned listing in London, has completed the pre-IPO preparations and the IPO financing is underway. 

§ Power Metal holds a 58.59% interest in First Development Resources PLC (“FDR”) which through local subsidiaries holds the Wallal Project hosting drill ready magnetic bullseye targets, demonstrating geophysical similarities to the recent Havieron discovery made by Greatland Gold PLC and a large rare earths, uranium and lithium project 65km north west of the Nolans rare earths project held by Arafura Rare Earths Ltd. FDR is undertaking a planned listing in London, has almost entirely completed the pre-IPO preparations and the IPO financing is expected to commence shortly.

§ Power Metal has agreed the disposal of two uranium properties in the Athabasca Basin to Teathers Financial PLC which is to be renamed Uranium Energy Exploration PLC (“UEE”).  The disposals are conditional on the successful listing of UEE in London creating a new uranium exploration focused company holding the Reitenbach and E-12 properties (Power Metal expects to hold 50-55% of UEE on listing). The pre-IPO preparations are complete and the IPO financing is expected to commence shortly.

§ Power Metal holds 49.9% of a joint venture company New Ballarat Gold Corporation PLC (“NBGC”) which holds, through its local subsidiary, a large footprint of granted exploration ground in the Victoria Goldfields of Australia including two former high-grade working mines and where recent drilling (at Berringa) has confirmed visible gold in the core of the first three holes drilled, assays awaited.  The intention of the JV partners is for NBGC to undertake a planned listing, with the technical results including assay of the current drill programme forming part of the technical data presented as part of that listing exercise.

DIRECTOR CHANGES

The entire Power Metal team have worked relentlessly to build the Company to its current strong position in the junior resource environment.

The next steps taken by the Power Metal group are key to the delivery of value to shareholders and the whole team. Specifically, board leadership of Power Metal Resources PLC with its retained interests needs to be optimised to meet the opportunities available to the Company.

When considering the Power Metal Board, consideration must always be given to the suitability, availability and capability to commit the time and energy required by the Company in the next stage of growth. 

Reflecting this, certain Board changes are now being implemented for reasons outlined in further detail below.

Sean Wade is to become an Executive Board Director and Chief Executive Officer with immediate effect and is charged with driving Power Metal to the next stage in its corporate growth as outlined in the “Focusing Power Metal” section above.

Sean is an experienced corporate executive within the natural resource sector, having held senior roles in mining companies including Berkeley Energia PLC, Pensana PLC and Asia Resource Minerals PLC. He has worked on numerous transactions in the capital markets, including IPO’s, secondary capital raising and M&A in a wide variety of different jurisdictions and exchanges. His extensive network covers numerous capital providers, including institutional funds, family offices and private wealth.

Sean started his career at Cazenove & Co in 1993. In 2007 he was a founding shareholder in Liberum Capital. Since 2012, he has worked in corporate business development and investor relations. He founded Scout Advisory Limited in 2020 undertaking consultancy work with various listed and private companies in the resource exploration mining sector.

His connections with internationally recognised mining companies and investment institutions will enable the Company to develop corporate and financial partnerships necessary to grow the business. We believe this network will also help accelerate and cement the disposal pathways for certain interests further enhancing the Company’s financial strength. 

As a result of and to focus on certain critical family health matters Paul Johnson is to step down as Chief Executive Officer with immediate effect and from the Board on 17 March 2023.

After stepping down Paul will continue working with the Company and the corporate team on the managerial transition, continuing communication strategies and notably to accelerate the work behind crystallisation of value from the Company’s interests. This will include anticipated completion of disposal transactions and ongoing support for spin-out listings and disposals, where applicable.

Scott Richardson Brown is to assume the role of permanent Non-executive Chairman.  This reflects Scott’s service continuity as interim Non-executive Chairman since October 2021, and the leadership of the Board and the Company over that time.

Following completion of the above changes on 17 March 2023 the Board will comprise:

Scott Richardson Brown – Non-executive Chairman

Sean Wade – Chief Executive Officer

Ed Shaw – Non-executive Director

Owain Morton – Non-executive Director

The Company is also planning to appoint a Finance Director reflecting the expansion of business activities going forward, a Technical Director and an additional Non-executive Director to complete the Board build-out at this time.

Scott Richardson Brown, Non-executive Chairman commented: “I want to welcome Sean to the Power Metal Board and as Chief Executive Officer.  His extensive relevant experience and connectivity across the resource industry will be a major asset to the Company as we move to the next important stage of business growth.

I am aware of the immense commitment Paul has made over four years building Power Metal to the business it is today and the opportunity that presents for shareholders in the Company.  I also understand and support Paul’s decision to step down from the Board to enable him to deal with  significant personal challenges. 

I think it is important to have Paul continuing to work with Power Metal in the key areas of transition, communications strategy and value crystallisation from the portfolio, something he has been instrumental in creating.”

Paul Johnson Chief Executive Officer commented: “It has been a privilege to bring Power Metal forward over the last four years, to the point where it is now a global business with a portfolio of strategic project interests, in optimal jurisdictions and positioned especially well in the junior resource sector.  I look forward to remaining involved with the Company, and its commercial work.

As the largest shareholder and taking an objective view, this managerial transition is the right step now for Power Metal to reach its fullest potential.  I will take great pride in watching Power Metal, as I expect, take its rightful place amongst the leaders in this sector.”

Sean Wade, incoming Chief Executive Officer commented: “I am very pleased to be appointed as CEO to lead Power Metal. In my view, the Company has an excellent resource asset set that is yet to be recognised by the wider market and thus fairly reflected in the market capitalisation of the Company.

The exciting challenge of unlocking this inherent value will be addressed in part by the completion of the disposal transactions and focusing our business operations on advancing the key exploration interests in Africa, potentially with strategic partners. In addition, and notably, there has been particular interest in a well-planned, well communicated and well executed expansion of the Company’s uranium exploration activities.

I firmly believe that Power Metal is in a great position to advance its projects and continue to gain recognition in the wider mining community and with recognised sector focused investors.“

ALL COMPANY INTERESTS IN OVERVIEW

REGULATORY DISCLOSURES

The following information is disclosed pursuant to Rule 17 and Schedule Two paragraph (g) of the AIM Rules for Companies in relation to Sean Edward Wade, aged 52:

Mr Wade does not hold any shares in Power Metal.

Mr Wade has confirmed there is no further information to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM rules.

As part of Mr Wades’ employment contract Mr Wade will be issued with Power Metal share options, namely, 12,500,000 options to subscribe for new Power Metal ordinary shares of 0.1p each at an exercise price of 3.25 pence with a life to expiry of 3 years from today (the “Director Options”). The Director Options are subject to a minimum service period of 6 months and may not be exercised until the volume weighted average price of Power Metal shares trades at 5.0 pence for ten consecutive trading days.

PDMR DISCLOSURE

The notifications below, made in accordance with the requirements of the EU Market Abuse Regulation, provide further detail on the director’s share dealing.

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: