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Power Metal Resources #POW – Botswana Molopo Farms Complex – Gallery

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is  pleased to announce the launch of a website gallery providing images and videos of the Molopo Farms Complex project in south-west Botswana.

The launch of the gallery follows the announcement on 7th October 2020 when the Company provided a drilling update from the Molopo Farms Complex project.  This announcement may be viewed through the following link:

https://www.powermetalresources.com/n/n265/botswana-molopo-farms-complex-drilling-update

The gallery, which currently hosts images of the preparation of the site for drilling commencement, may be viewed through the following link:

https://www.powermetalresources.com/gallery/7/molopo-farms-complex-botswana

Further images and videos will be added to the gallery as the drill programme progresses.

For further information please visit  https://www.powermetalresources.com/   or contact:

Power Metal Resources plc
Paul Johnson (Chief Executive Officer)+44 (0) 7766 465 617
 SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat+44 (0) 20 3470 0470
 SI Capital Limited (Joint Broker)
Nick Emerson                                                                                                           +44 (0) 1483 413 500
 First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson+44 (0) 20 7330 1883

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 metal exploration in North America and Australia together with base metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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.

Power Metal Resources #POW – Project Portfolio Update

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to provide a project portfolio update for shareholders.

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

“Power Metal has built a diverse portfolio of interests and has multiple projects in the active exploration phase.  The latest position for all our project interests is outlined below, together with details of targeted near-term news flow across our business.

To assist investors and shareholders keep track as we push ahead with multiple exploration programmes we continue to enhance our communications tools embracing both public and investor relations disciplines.  The Company’s corporate website is being updated at present and a new website is to be launched in the coming month.  We are also looking to launch or enhance project level websites where appropriate.

We work hard to keep our corporate presentation fully up to date with each Company announcement, so it should remain a primary tool for shareholders wishing to learn more.  Today we are also launching  a Project Dashboard for shareholders which will be held on our website and contain an updated overview of each project, its status and near-term plans.

Power Metal are seeking large scale metal discoveries through active exploration, much of which is currently underway or about to commence.  Given the level of activity it’s important we remain open to feedback.  Therefore, should shareholders have any questions, or suggestions, please let us know via info@powermetalresources.com.”

Project Information Sources for Shareholders:

Further details in respect of Power Metal’s nine project interests can be found on the Company’s website https://www.powermetalresources.com/s/30/projects

The Company maintains a frequently updated Corporate Presentation which provides an overview of each project and additional corporate information and this may be viewed through the following link:

https://www.powermetalresources.com/p/193/presentations

Recognising the breadth of the Company’s projects, and the ongoing active exploration across numerous projects, Power Metal have today launched a Project Dashboard.  This provides an updated list of Company’s projects, their current status and each project’s targeted near term newsflow.

The Dashboard is now embedded into the Company’s website and a pdf copy may be downloaded through the following link:

https://www.powermetalresources.com/Uploads/8668-POW_Project_Summary_Updated.pdf

The latest project status and targeted news flow is also outlined below.  Shareholders should note that the targeted outcomes and plans may be impacted by a variety of factors, of which readers will be aware the continuing Covid-19 pandemic remains a material factor.  Power Metal works with its in-country partners to mitigate and manage all risks proactively and efficiently to ensure where possible the safe continuation of ground operations.

Power Metal Project Status and Targeted News Flow:

PROJECTMETALPOWINTERESTCURRENT STATUSTARGETED KEY NEWS 2020
     
AUSTRALIAVictoria Goldfields Joint Venture Gold49.9%12 applications over (2,188 km2.) Completed historic project reports, exploration planning and NI 43-101. Potential grant of exploration licences, starting with first 3 priority applications, then launch of exploration programmes.Progress updates for listing on North American stock exchange.
BOTSWANADitau Camp Project Rare Earths50%2 licences (1,386km2) Rare earths potential established from recent exploration work.Commence orientation study to assist in the characterisation and exploration vectoring for the Ditau Project carbonatite ring-structures potentially hosting rare earths.
BOTSWANAKalahari Copper Belt Project CopperSilver50%2 licences (1,386km2) southwest of Sandfire Resources’ T3 and A4 Dome copper-silver discoveries.Exploration results from soil sampling, then ground magnetic surveying, and possibly airborne electromagnetic surveying, leading into drill target development.
BOTSWANAMolopo Farms Complex Project NickelCopperPGMsUp to 50.96%3 licences (1,780km2) with multiple targets identified from electromagnetic survey and ground geophysics. Planned launch of maiden drill programme and thereafter delivery of results from drilling to the market including on-site findings and laboratory assays.
CAMEROONCobalt Blue Project CobaltNickel100%4 licences adjacent to, or within 50km of the Nkamouna/Nada cobalt/nickel deposit.  Announce findings from review of exploration strategies and potential commercialisation options.
CANADASilver Peak Project Silver 30%Mineral claims over historical Eureka-Victoria Silver Mine and high grade, intrusion related, polymetallic Ag-Pb-Zn-Cu veins.Planned launch of drill programme targeting high grade silver veins and following channel sampling in September 2020 which highlighted bonanza grade of up to 14,937g/t (482 oz/t).
DRCKisinka Project CopperCobalt70%Exploration licence of 41 carrés miniers (each 84.95 ha) with a 6.8km copper anomaly identified.Copper/cobalt assay results pending from 2020 pitting programme.C onversion of the licence to a Permis d’Exploitation (production license) with a 25 year life.
TANZANIAHaneti Project NickelCopperPGMsGold etc35%Large polymetallic land package of c5,000 km2  including 80km long ultramafic complex with drill ready nickel sulphide/PGM targets.Planned launch of maiden drill programme and thereafter delivery of results from drilling to the market including on-site findings and laboratory assays
USAAlamo Gold Project GoldUp to 75%Package of mining claims covering c766 acres prospective for gold following the discovery of native gold nuggets near surface.Planned follow on exploration programme after initial short reconnaissance survey conducted successfully in August 2020.

REGULATORY STATEMENT

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

For further information please visit  https://www.powermetalresources.com/   or contact:

Power Metal Resources plc
Paul Johnson (Chief Executive Officer)+44 (0) 7766 465 617
 SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat+44 (0) 20 3470 0470
 SI Capital Limited (Joint Broker)
Nick Emerson                                                                                                           +44 (0) 1483 413 500
 First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson+44 (0) 20 7330 1883

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 metal exploration in North America and Australia together with base metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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.

Power Metal Resources #POW Establishes A New Strategic Joint Venture In Botswana

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to announce the acquisition of a 50% interest in a 2,680 km2 portfolio of base and strategic metal project interests in Botswana (the “Acquisition”) to be held in a new strategic joint venture holding company further details of which are provided below. 

BACKGROUND

On 15 April 2020 Power Metal and Kavango Resources plc (LON:KAV)(“Kavango”) announced a conditional acquisition agreement in respect of the Ditau Camp project in Botswana, held 100% by Kavango.

In recent months the companies have been involved in discussions, the outcome of which is a new strategic joint venture (“JV”) agreement to create a new joint exploration company, with the objective of floating the company as a Botswana-focused vehicle on a major stock exchange in 2021.

HIGHLIGHTS

–     Power Metal to acquire a 50% interest in four Botswana prospecting licenses currently 100% owned by Kavango and forming a new JV between the companies.

–    Two prospecting licenses prospective for copper and covering 1,294.2km2 are situated in the Kalahari Copper Belt in central west Botswana located directly to the southwest of Sandfire Resources’ T3 and A4 Dome copper-silver discoveries;

–      Two further licenses comprise the Ditau Camp project covering 1,386km2 and prospective for rare earths in south west Botswana;

–     Consideration for the acquisition payable to Kavango comprises £75,000 in cash, 6 million new ordinary shares of 0.1 pence each in the Company (“new Ordinary Shares”) at a price of 1.25p each and 5 million Power Metal warrants at 2.0p with a two year life to expiry and in the event of early exercise of 2.0p warrants, replacement warrants at 5.0p;

–     In addition, Power Metal commits to sole funding of US$150,000 over a two year period for exploration expenditure across the Ditau Camp and Kalahari Copper Belt projects to ensure expeditious and proactive project exploration with any further expenditure above US$150,000 being funded jointly by Power Metal & Kavango;

–      The four project licenses are to be held in a new Botswana private holding company, with an appropriate holding company structure to enable the possibility of the new vehicle to seek a listing on a Canadian or UK stock exchange in 2021.

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

“The new acquisition announced today is a significant development for Power Metal, adding further strategic metal projects into the business portfolio and in the secure, stable and supportive operating jurisdiction of Botswana.  The acquisition also complements Power Metal’s interest in the Molopo Farms Complex project, which is seeking a large-scale nickel-platinum group metal discovery in Botswana, and where a maiden drill programme is planned.

We are keen to develop more insight into the potential of the Ditau Camp project, and this can only be achieved through proactive ground exploration which we intend to undertake with our JV partners.  Moreover, the addition of two key Kalahari Copper Belt licences brings the Company into a highly prospective copper territory which, as I have personally experienced, has the potential to deliver considerable discoveries.  Again, ground exploration is key, and we intend to be proactive.

It is a pleasure to be working with the Kavango team who have considerable operational experience and a commitment to finding a new large-scale metal discovery in Botswana. This commercially focussed outlook is what we share at Power Metal.  We have found the two teams have complementary skills and intend to blend our resources in the search for a metal discovery.”

FURTHER INFORMATION:

Transaction Terms 

Power Metal is to acquire a 50% interest in the two licenses comprising the Ditau Camp project (PL169/2012 and PL010/2019) and two licenses in the Kalahari Copper Belt (PL036/2020 and PL037/2020).

Consideration for the acquisition comprises payment to Kavango as follows:

–      An immediate payment £75,000 in cash;

–      The issue to Kavango of 6,000,000 Power Metal new Ordinary Shares at a price of 1.25p each, for value of £75,000 (the “Acquisition Shares”);

–      The issue to Kavango of 5,000,000 warrants to subscribe for Power Metal new Ordinary Shares at a price of 2.0p each with a two year life to expiry from admission to trading on AIM of the Acquisition Shares (the “Acquisition Warrants”).

Should the Power Metal Volume Weighted Average Share Price (“VWAP”) meet or exceed a price of 7.5p for five consecutive trading days Kavango will then have 14 calendar days to exercise the Acquisition Warrants and make payment to Power Metal or the Acquisition Warrants will be cancelled.

Should Kavango exercise the Acquisition Warrants within 12 months of issue, they will receive replacement warrants to subscribe for Power Metal new Ordinary Shares at a price of 5.0p each with a two year life to expiry from admission of the Acquisition Shares (the “Super Warrants”).

Should the Power Metal VWAP meet or exceed a price of 10.0p for five consecutive trading days Kavango will then have 14 calendar days to exercise the Super Warrants and make payment to Power Metal or the Super Warrants will be cancelled.

Power Metal will pay the first US$75,000 toward Ditau Camp and KCB exploration spend within 12 months of today’s date and a further US$75,000 in the subsequent 12 months (the “Initial Spend”).  Power Metal may at its sole discretion accelerate the Initial Spend into the first 12 months.

Kavango and Power Metal must pay their share of additional spend after the Initial Spend on Ditau Camp or the KCB licenses or will dilute their percentage interest in line with standard industry provisions. 

Kavango and Power Metal will be joint operators.

The Ditau Camp and KCB projects will be transferred into a new private Botswana company which will be held 100% by a UK or overseas public company which will seek a listing on a Canadian or UK stock exchange targeting a listing in 2021.

Power Metal will provide a fund of up to £10,000 to cover the costs of the above corporate structuring which will be undertaken in line with local regulations for the licenses and the holding companies and which will seek regulatory approvals where relevant.

Kalahari Copper Belt Project (“KCB”)

The KCB stretches 1,000 km from northern Botswana to central Namibia and is prospective for copper-silver deposits. The KCB is relatively underexplored and is a key emerging trend globally, located in stable and pro-mining jurisdictions.

In recent years the KCB has attracted substantial exploration interest. This has resulted in significant copper-silver discoveries including:

Cupric Canyon’s Zone 5 deposit (“Zone 5”), which hosts a mineral resource of 91.7 million tonnes (“Mt”) grading at 2.1% copper and 14 grams a tonne (“g/t”) of silver.

MOD Resources’ and Metal Tiger’s (LON:MTR) commercial discovery at T3, which was subsequently acquired by Sandfire Resources (ASX:SFR) (“Sandfire”) in October 2019.

The T3 Project currently hosts a mineral resource of 60.2Mt grading at 1.0% copper and 14.0g/t silver and an Ore Reserve of 342,700 tonnes of contained copper and 14.6 million ounces (“Moz”) of silver.

Sandfire’s A4 Dome satellite discovery, which is located directly to the west of T3 and is subject to an ongoing resource drilling campaign. 

Prior to applying for any Prospecting Licenses (“PLs”), Kavango undertakes extensive desktop and due diligence studies. In addition, Kavango analyses publicly available exploration data to enhance its geological and geophysical understanding of the area.

Kavango was granted two PLs, in April 2020 and which lie in a highly prospective area immediately south of the District capital of Ghanzi. The PLs covering a total of 1,294.2 km2 are as follows:

–      PL 036/2020 – (590.20km2) for initially 3yrs to 31 March 2023 — Yr1 exploration expenditure BWP 548,000 (about £37,500) – currently 100% owned by Kavango

–      PL 037/2020 – (704.00km2) for initially 3yrs to 31 March 2023 — Yr1 exploration expenditure BWP 548,000 (about £37,500) – currently 100% owned by Kavango

The JV plan to commence field work on the two KCB licenses shortly and will likely comprise both regional and detailed soil geochemistry. Planned work also includes a ground magnetic survey to refine the positions of the prospective geological contacts, below Kalahari sand cover, with the option of follow-on electromagnetic survey work to identify potential conductors associated with those contacts.  Controlled-source audio-frequency magnetotellurics (“CSAMT”) surveying will be carried out over soil anomalies to define the stratigraphy, structures and mineralisation.

Drilling is planned by the JV partners when suitable targets have been identified.

Ditau Camp Project

Ditau comprises of two prospecting licenses (PL169/2012 and PL010/2019), which cover an area of 1,386km2. Surface prospecting work by Kavango has involved geochemical soil sampling and magnetic and gravity geophysical surveys. Analysis of results from this work, and pre-existing airborne magnetic geophysics data, has enabled the identification of 10 separate magnetic “ring structures” within the Ditau license area. 

One of these ring structures is a 7km by 5km magnetic and gravity anomaly (the “Ditau Prospect”). In Q1 2019 Kavango conducted an initial 1,000m diamond drill programme at the Ditau Prospect across two holes, 1.8km apart. 

Drill core assay and whole rock geochemistry results from the two holes were released in August 2019 and whilst they did not identify economic mineralization, the results confirmed the presence of highly altered Karoo sediments, sitting above a mafic intrusive body. The alteration observed in the drill cores stretched to >300m depth.

These results were considered encouraging because the age of the Karoo rocks (c.120million years), the high level of their alteration and the fact this alteration stretched to >300m depth; valuable geological pointers, when exploring for potentially economic mineral deposits.

Further, the geochemistry obtained from the drill core of the two Ditau Prospect holes suggested the metasomatic alteration encountered was due to a process known as fenite alteration or “fenitization”. Fenite alteration is particularly associated with carbonatite intrusions, where it occurs as an aureole or halos around the carbonatite intrusive, and it has significant potential to be used as an exploration tool to find mineralised intrusions in a similar way alteration patterns are used in other ore systems, such as porphyry copper deposits.

Carbonatites and alkaline-silicate rocks are the most important sources of Rare Earth Elements and niobium. REEs include much sought after elements, such as Neodymium and Praseodymium, which are used in the manufacture of the new generation of electric vehicles (EVs) and other high-tech applications.

By way of comparison, Kavango consider the post-Karoo age of the fenitized rocks intersected by drilling at the Ditau Prospect, is comparable to the post-Karoo at the Longonjo carbonatite which is being developed as a neodymium and praseodymium open pit mine, by Pensana Metals Limited in Angola.

Subsequent to the release of the August 2019 drill results from Ditau, Kavango learned that Canadian miner Falconbridge Limited (“Falconbridge”) drilled into 3 carbonatites (the “Falconbridge Carbonatites”) in the early 1970s at a location less than 50km from Ditau and hosted by similar Karoo country rocks.

Falconbridge was looking for kimberlites in this area, which lies within a cluster of over 20 kimberlites discovered at the same time. Kimberlites, otherwise known as “diamond pipes”, are the most important source of diamonds mined today. However, carbonatites have similar looking magnetic and gravity anomalies to these diamond-bearing formations.

The carbonatites that Falconbridge intersected were just below the Kalahari sand cover and therefore would have been amenable to open pit mining. This implies they are post-Karoo age and therefore potentially comparable to the Ditau ring structures. 

Although the Falconbridge Carbonatites are located outside of the Kavango held ground the company is reviewing the Falconbridge results and designing an orientation study to assist in the characterisation and exploration vectoring for the Ditau ring-structures. As part of this orientation study the Falconbridge Carbonatites will be surveyed using ground magnetic and gravity geophysics and soil geochemistry.

The JV partners will provide further updates, concerning future work plans at Ditau Camp project in due course.

NEXT STEPS

Commencement of exploration at both the Ditau Camp and KCB projects.

COMPETENT PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 6,000,000 Acquisition Shares to be admitted to trading on AIM which is expected to occur on or around 28 September 2020 (“Admission”). Following Admission of the Acquisition Shares, POW’s ordinary issued share capital will comprise 816,066,542 ordinary shares of 0.1 pence each.

This number will represent the total voting rights in the Company, and following Admission, 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. The new shares will rank pari passu in all respects with the ordinary shares of the Company currently traded on AIM.

REGULATORY STATEMENT

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

CONTACT INFORMATION

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc 
Paul Johnson (Chief Executive Officer)+44 (0) 7766 465 617
  
SP Angel Corporate Finance (Nomad and Joint Broker) 
Ewan Leggat/Charlie Bouverat+44 (0) 20 3470 0470
  
SI Capital Limited (Joint Broker) 
Nick Emerson                                                                                                           +44 (0) 1483 413 500
  
First Equity Limited (Joint Broker) 
David Cockbill/Jason Robertson+44 (0) 20 7330 1883

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 metal exploration in North America and Australia together with base metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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.

Power Metal Resources #POW – Botswana Molopo Farms Complex – Progress Update

Power Metal Resources PLC (LON:POW) the AIM listed metals exploration and development company is pleased to provide an update in respect of the Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key” or “KKME”) Molopo Farms Complex Project (the “Project” or “MFC Project”), which is targeting prospective massive nickel sulphide mineralisation in Botswana.

Power Metal has an 18.26% shareholding in Kalahari Key and has elected to earn in (“Earn-In”) to a 40% direct interest in the MFC Project by expending US$500,000 on exploration expenditure, notably target drilling, in 2020. On completion of the Earn-In, Power Metal will have an effective economic interest of 50.96% in the MFC Project.

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

“KKME continue to make progress toward the objective of drilling major nickel sulphide targets in Botswana.  The team at KKME are continuing to work with the Botswana authorities to secure approval of the Environmental Management Plan, which is the final regulatory step before launch of the drill programme.

As with many nations, Botswana has been managing the impact of Covid-19 and has taken a number of robust steps in this regard.  We are optimistic with the measures taken and subject to regulatory approvals, the Molopo Farms Complex drill programme can commence in the near term.

As a result, we are making final preparations in drill programme planning, and further refining the drill targets through the launch of the Audio Magneto-tellurics survey (“AMT”) described below.  We have also now established a dedicated US Dollar account covering the US$500,000 earn-in expenditure for the drilling programme.

To be clear the US$500,000 cost is fully covered by the existing financial resources of Power Metal.  As at today’s date the cash and listed investments held by the Company amounted to £1.65million or circa US$2.15million.

Implementation of the planned drill programme will be a significant event for Power Metal and KKME, as we will be targeting nickel sulphide targets of considerable scale.  We are therefore switched and honing our focus on high impact project drilling.”

BACKGROUND:

A helicopter-borne electromagnetic survey, followed by ground geophysics, and subsequent desktop review, has to-date identified a total of eight targets prospective for nickel – platinum group metals (“PGMs”).  Four high profile drill targets have been selected for drilling, with eight drill holes designed to test these targets.

DEVELOPMENTS:

OPERATIONAL ELEMENT

UPDATE

MFC Project Drill Targeting

Project targets remain in four target groups as follows:

Chipo – Northern Targets

Tshepo – Central Targets

Galaletsang – Southern Targets

Tshenolo – Western Magnetic Targets

Initial drilling remains focused on the Chipo target group in the Northern area of the MFC Project where the decay constant from ground geophysics (up to 530 milliseconds for certain MFC Project targets) reaches or exceeds the high levels  associated with other massive sulphide discoveries in the region (including above 250 milliseconds in eastern Botswana).

The drill programme will target prospective massive nickel sulphide mineralisation.

MFC Project Drill Budget

In recognition of the planned drill programme and imminent need to cover operational costs in this regard, Power Metal has transferred US$500,000 to a dedicated US Dollar account ready to make payments for drill programme related costs.

Audio Magneto-tellurics Survey

KKME has commenced AMT ground geophysical investigations on four of its targets for massive nickel sulphide mineralisation in the Molopo Farms Complex of south-east Botswana.

The AMT survey will provide a clearer 3D shape to the four targets being investigated and allows for further refining of the drill targets as KKME leads up to the drilling programme.

The AMT survey is being undertaken by Spectral Geophysics of Gaborone, Botswana.

As part of KKME’s commitment to supporting local scientists, a PhD student from Botswana’s University of Science and Technology (BUIST) will participate in the AMT fieldwork under the supervision of our geophysical consultant, Cas Lötter.

Impact of Covid-19 on Botswana Operations

The impact of Covid-19 on Botswana and operations in country is being monitored on an ongoing basis.

All activities conducted in country will follow the guidelines and requirements of the local authorities and with full regard for the safety of local communities and operational team members.

Environmental Management Plan (“EMP”)

Following submission of the EMP feedback was received from the Department of Environmental Affairs (“DEA”), Botswana and the EMP was updated as required and resubmitted in Q2 2020. Feedback from the DEA is awaited.

Review of New Project Opportunities

Given the extremely positive findings from ongoing work KKME have decided to focus their operational activities entirely on the planned drill programme at the Molopo Farms Complex.

 

Kalahari Key and MFC Project Background

Kalahari Key Mineral Exploration Company (Pty) Ltd, registered in Botswana, is a mineral exploration and geological consultancy company.

The MFC Project originally consisted of three licenses in covering an area of 2,725 square kilometres that are considered prospective for Nickel-Copper-PGMs mineralisation and 100% owned by Kalahari Key.

In November 2016 the company acquired two mineral exploration licences (PL310/2016 and PL311/2016) from the Botswana Government. The licences cover the eastern and central parts of a shear/feeder zone through the centre of the Bushveld-related Molopo Farms Complex in southern Botswana. A third licence (PL202/2018) was acquired in early 2018 immediately to the south of PL311/2016.

Licences PL310/2016 and PL311/2016 were due for renewal in late 2019 and renewal applications were submitted including evidence of work undertaken and associated costings in excess of the minimum stipulations for maintaining the licences and seeking renewal.  Renewals have been granted, with the usual provision of circa 50% land area relinquishment.

The exploration work undertaken to date has proved extremely useful in identifying the ground hosting the potential mineralisation and the remaining areas held under the renewal applications contains the key potentially mineralised structures.

A helicopter-borne electro-magnetic (“EM”) survey over the Molopo Farms Feeder Zone project area completed in Q2 2019 identified 17 sub-surface conductor targets and follow up ground EM surveys over 14 of the targets produced eight priority targets of considerable size and scale.  Four high-priority targets will be subject to initial drilling for which 8 drill holes have been designed to penetrate all targets.

The targets are highly conductive bodies which could potentially be host to massive nickel sulphides due to the spatial location, particular geological setting and associated magnetic response.

KKME appointed consultants Wellfields Consulting Services in Gaborone, Botswana to complete a pre-drilling Environmental Management Plan (“EMP”) and the EMP was submitted to the DEA in Q4 2019.  Feedback was received from the DEA and the EMP updated as required and resubmitted in Q2 2020.  Further feedback is waited from the DEA.

KKME implemented gravity surveys over the key drill targets, to eliminate as far as possible any chance that the targets are graphite rather than sulphide bodies, since the former although conductive would not be of interest, although this is considered unlikely given the geological setting.  This work was successfully completed and the final gravity survey report confirms that all targets remain valid.

KKME is undertaking an AMT survey to further refine the four key drill targets in the final run up to implementing the drill programme.

In addition, final preparations are now being implemented to ensure, on receipt of EMP approval, that KKME is in a position to mobilise and launch the drill programme as soon as possible.

Liaison with drilling contractors has continued in 2020, including with some who have expressed a willingness to consider equity in lieu of cash for a portion of their drilling costs in respect of the initial programme.  A final decision on the specific contractor will be made shortly after receipt of the EMP approval.

There is continuing interest in the MFC Project from third parties and KKME is maintaining liaison with external organisations in this regard.

Power Metal Interest in Kalahari Key and the MFC Project

Power Metal has an 18.26% shareholding in Kalahari Key and on 31 December 2019 elected to earn into a 40% direct project interest in the MFC project by investing US$500,000 in the Project by 31 December 2020 (the “Earn-In”).

Following completion of the Earn-In, Power Metal will hold an effective economic interest of 50.96% in the Project.

The Company’s Kalahari Key acquisition agreement was announced on 13 May 2019 and readers can review this announcement through the following link:

https://www.powermetalresources.com/n/n104/acquisition-and-earn-in-agreement-botswana-project

Further Information on the Power Metal Project Level 40% Earn-In to the MFC Project

On 31 December 2019 Power Metal elected to earn-in to 40% of the MFC Project by entering into and then fulfilling a commitment to spend US$500,000 (“Committed Spend”) during the period to 31 December 2020.

Upon Power Metal entering into the Earn-In an MFC Project operational committee (the “Committee”) was established comprising members Roger Key (Kalahari Key Director), Andrew Bell (Power Metal Director) and Andrew Moore (Kalahari Key Director).  The Committee will determine the allocation of the Committed Spend and management of operational activities.  Upon completion of the Earn-In expenditure requirement Power Metal will hold 40% of the MFC Project.

The Committed Spend will be applied primarily to the completion of drilling of four targets at the MFC Project.

Also, following Power Metal electing to Earn-In, Paul Johnson (Power Metal Director) joined the Board of Kalahari Key.

Also, now Power Metal has elected to Earn-In, a Joint Venture Agreement (“JVA”) is being established between the parties which will determine strategy, operational management and corporate structuring.  This will include the usual fund or dilute provisions unless an alternate structure is agreed by the parties.

COMPETENT PERSON STATEMENT

The technical information contained in this disclosure has been read and approved by Mr Nick O’Reilly (MSc, DIC, 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.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

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 metal exploration in North America and Australia together with base metal exploration in Africa. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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.

Power Metal Resources plc #POW – Strategic, Operational and Financial Update

Power Metal Resources plc (LON:POW) the AIM listed metals exploration and development company is pleased to  provide a Strategic, Operational and Financial Update (the “Update”) to shareholders, following the Company’s £1,000,000 financing announced on 06 July 2020 (the “Financing”).

The Financing unlocked the potential of Power Metal, by providing the financial capability to push on with existing interests more innovatively and aggressively.

This announcement explains in more detail important elements of strategy, operations and financial management, in light of the funding raised.

HIGHLIGHTS

· Power Metal has two key strategic objectives:

1.  To make one or more major metal discoveries within its gold, base and strategic metal projects and then crystallise the value of such discoveries for shareholders’ benefit; 

2. To build its working capital and ‘balance sheet’ toward financial self-sufficiency and to reduce forward reliance on funding from the market to achieve its business objectives. 

· The Company currently has five main projects and two additional projects in the later stage of due diligence and commercial discussions. Each project has discrete operational targets which may lead to operational news flow, an outline of which is provided below .

· Following the Company’s Financing announced on 6 July 2020 the Company can confirm its total assets as at 10 July 2020 amounted to £3.04 million. Within total assets, cash, and tradable listed investments amounting to £1.7 million (including monies raised in the Financing).

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

“At Power Metal I am striving to build a diversified exploration business backed by a strong ‘balance sheet’ to drive the Company towards an ability to self-finance its own activities and break the dependency most juniors have on market financings.

I am keen for us to be bold and adventurous with reward weighted risk taking, but with solid underlying principles of risk management covering geopolitical, commodity, operational and financial considerations. In other words, combining boldness with risk management means diversification, which is what we have achieved.

Many companies put their business case forward focused around a single major project and concentrate their energies around that.  I understand this, but it’s not the Power Metal approach, where instead, in our view, we have numerous major projects, each of which is capable of delivering a transformational discovery and by virtue of this shareholder wealth.

It has not been easy building our diversified project portfolio during the challenging junior resource sector conditions of the last 18 months, but it may not have been possible but for those conditions that meant excellent opportunities remained available.

So now we find ourselves with a diverse and exciting portfolio of project interests, and with the support of shareholders and investors in the recent Financing, a considerable working capital position with which to drive forward those interests.  If we are fortunate in making a major discovery in just one of our projects, we could create significant value for our shareholders.

Now to practicality, and how we move forward. 

We have published below a step by step guide to our operational plans and our underlying financial position.  As shareholders will appreciate, not everything goes to plan, but I believe if we are transparent with the approach we are taking, and utilise the financial resources available to us, we will make our business model clearer and a more attractive investment proposition.

As a final note, all shareholders and investors are invited to provide feedback on Power Metal, and recommendations or suggestions to enhance what we do are always helpful.  Likewise if you have any questions please let us know through info@powermetalresources.com or my telephone number is below and at the bottom of all our market announcements.  If you have a question about our business, it will likely be shared by many others, so please ask, and that will also help us to further improve our investor information and market communications.

Thanks to all our shareholders for your interest and support.  As investors we are all focused on making money from our investments, however following a company’s story can also be an enjoyable part of the investing experience.  I believe Power Metal has a fascinating emerging story.

Now on with the work!”

STRATEGIC OBJECTIVES

Power Metal has two key strategic objectives:

To make one or more major metal discoveries within its gold, base and strategic metal projects and then crystallise the value of such discoveries for shareholders’ benefit.

The Company considers that each of its current projects has the potential to deliver a large-scale metal discovery.  The same belief also forms the basis around any selection of new projects brought into the portfolio. 

Projects will only remain in the Company’s portfolio while they demonstrate the ongoing potential, through exploration findings, to deliver a discovery, and only where the work programmes needed are comfortably within the available financial resources of the Company.

In the remainder of 2020, Power Metal has a number of stand-out opportunities that through exploration, could expose shareholders to a major metal discovery.  These include:

–    Molopo Farms Complex project Botswana, (“Molopo Farms Project”) (Following US$500,000 earn-in – 50.96% Power Metal) – drilling is planned for the coming months targeting major nickel – copper – platinum group metal (‘PGM’) targets;

–  Haneti Polymetallic project Tanzania, (“Haneti”) (up to 35% Power Metal) – exploration drilling plans are being developed to target major nickel – copper – PGM targets; 

–  Australia Gold JV – out of 11 licence applications in the Victoria Goldfields, proactive exploration may be undertaken in 2020 subject to license grants, local approvals and finalisation of targets following completion of the historic exploration and mining database, which includes specific drill target locations in priority licenses. 

To build its working capital and ‘balance sheet’ toward financial self-sufficiency and to reduce forward reliance on funding from the market to achieve its business objectives.

Power Metal is focused on building a large underlying working capital position with which it can move toward financial self-sufficiency and an ability to fund the central and project operational costs through its own financial resources, with reduced dependency on market financings.

This is not a model pursued proactively by many junior resource companies where a more traditional model of cash burn for exploration, then restore cash balances through placings, tends to apply.  Power Metal aims to do things differently.

There are three main ways in which Power Metal intends to build its ‘balance sheet’ working capital:

Adopting a dual approach of taking a position in project holding companies alongside direct project participation.

To date Power Metal have taken this approach three times with Kalahari Key Mineral Exploration Pty Ltd (“Kalahari Key”) – Molopo Farms Project, Katoro Gold Plc (“Katoro”) – Haneti and with Kavango Resources Plc (“Kavango”) – Ditau Camp Project*.

*Subject to the completion of successful due diligence 

The aim is that successful project development will drive the value of the ultimate holding company in which Power Metal has a stake, driving the value of our investment in that company higher.

The recent financing has enabled this option to be utilised for further potential transactions should opportunities arise.

Monetisation of existing project interests

Following acquisition of projects Power Metal plans to move each project forward corporately and technically.   From our portfolio certain interests may be vended to third parties or into new listings, in exchange for cash, equity and other forms of consideration which will build the Company’s working capital.

Investment in other junior resource sector opportunities

In the current climate there are opportunities for significant capital returns to be generated from investment in junior resource equity or related financial instruments.

Power Metal has created an internal fund for making investments  in other junior resource sector opportunities, which will be referred to as the Company’s “Junior Resource Fund, with a view to building the value of a portfolio of investments to add to working capital.  As the vast majority of the Company’s working capital is deployed to operating projects and associated investments in project holding companies, only a small amount of initial capital has been deployed for the Junior Resource Fund (up to a maximum in total of £75,000 representing less than 5% of Power Metal’s current working capital.)

 

OPERATIONAL PLANS AND KEY TARGETS

Power Metal provides the following overview of its five main projects and two projects under due diligence.

This includes a rationale for each project, the work underway and planned and the near-term targets for shareholders to monitor as the Company moves forward.

PROJECT

RATIONALE/WORK UNDERWAY/NEAR TERM TARGETS

Arizona US – Alamo Gold Project

(GOLD)

(Under Due Diligence)

Rationale:

Power Metal considers Arizona to be a robust mining jurisdiction.

This property is in west-central Arizona, an area with mineral potential though without the historically intensive exploration of other areas of Arizona or Nevada. The local team are experienced project finders, with a clear plan for the project and the potential for a major precious or base metals discovery leading to a commercial mine. 

If Power Metal can balance the risk/reward with the right transactional structure and expeditious exploration programmes, Power Metal consider this to be a viable complementary project in the portfolio.

Moreover, there is merit in building a North American gold business within the Company, including the Alamo and other projects, which would come through our established network in the USA and Canada. 

The Alamo Gold Project (“AGP”) opportunity is situated in west-central Arizona USA and originally identified as prospective for gold following the discovery of native gold nuggets (the “Nuggets”) near surface and in numerous locations within the project area. 

The geological environment supports further exploration to investigate the source of the nugget gold and the potential for a large mineralised gold system.

In addition, the region in which the project is situated is prospective for precious and base metals, with regional mines that have produced silver, lead, gold, copper and zinc.

The POW team visited the project during January this year and concluded the Alamo gold project was an interesting opportunity worth investigating further.  The then project footprint was too small so the Company funded an expansion of ground to cover the potential mineralised system.  This funding was part of a deal to extend the due diligence period during the Covid-19 lockdown.

Power Metal has since been engaging with the ultimate project owners and the vendors of an option giving a right to earn-in to (“RTEI”) the project.

If the discussions conclude successfully the final terms will include commencement of an immediate exploration programme which is important to all parties.

NEAR TERM TARGETS:

Successful negotiation and completion of transaction with commencement of project earn-in.

If transaction completed – launch of initial exploration programme.

Australia JV – Victoria Goldfields

(GOLD)

Rationale:

Power Metal has been reviewing strategic gold opportunities in the last year.  Attention focused on Australia, and specifically the Victoria Goldfields in late 2019.  In the first few months of 2020 there was an  increase in activity and interest relating to the Victoria Goldfields, driven by many factors, with the notable success of the Fosterville mine (owned by Kirkland Lake Gold (TSX:KL) and the significant success of the listing of Fosterville South (TSX-V:FSX) another junior gold exploration company focussed on the Victoria Goldfields.

As a result Power Metal joined forces in a joint venture (‘JV’) with Red Rock Resources plc (LON:RRR), and utilising their longstanding vehicle Red Rock Australasia (Pty) Limited set about submitting license applications.

Power Metal considers the Victoria Goldfields to be a highly attractive opportunity in a secure jurisdiction offering considerable potential for multiple gold deposit discoveries. This view is backed by the considerable interest in the area in what the Company believe amounts to a “Gold Rush” with a high volume of new license applications submitted  in 2020 to date.  There is now insufficient free land from which a strategic land package of substance can be constructed.

Power Metal holds a 49.9% interest in Joint Venture company Red Rock Australasia (Pty) Ltd (“RRAL”) with partners Red Rock Resources plc (50.1%). 

RRAL has submitted 11 license applications for tenements covering 1,839 sq km in the Victoria Goldfields of Australia, centred around long-established mining centres.

The JV is undertaking an immense amount of work to progress the applications in various work streams including:

–  Utilising a team of Victoria-based geologists and local experts to finalise a project database confirming the extent of gold mineralisation and historical production across all eleven licence application areas;

–  Using this database to develop a ‘ Geological Review and Development of Exploration Strategy’ report to furtherenhance and target expeditious exploration plans in readiness for licence grants;

–      Preparation of a National Instrument 43-101 Technical Report in respect of the land package;

–  Formation of a Technical Advisory Board including Victoria-based geologists to advise and co-ordinate on technical matters in connection with a possible listing and has appointed initial members.

RRAL is working proactively with our land management advisors and Earth Resources Victoria to seek the grant of priority licence application areas enabling RRAL to launch into ground exploration, subject to any appropriate local approvals.

The Company’s working capital position, applied through the JV, enables a variety of avenues to be developed in respect of this new project area.  Power Metal has funds for selected proactive initial exploration which is our primary interest focused on priority license areas. In addition, for the pursuit of actions that may increase and articulate the value of the license land package created.

We are focused on investing in Victoria fully by supporting active exploration programmes and engaging local staff to undertake that work.  This is demonstrated by our engagement with locally resident geologists to undertake our database preparation above.

There has been considerable interest in the work we are undertaking by other listed companies and with some we are considering potential transactions in respect of certain of the licence applications. 

RRAL is also working with advisors to review the potential to list the JV Company on a North American Stock Exchange which it appears could draw considerable support, properly value the JV interests and provide an additional amount of project level working capital to fund extensive exploration across the properties.

NEAR TERM TARGETS:

–  Granting of priority licences and commencement of ground exploration on high profile targets, including early drilling of areas where high grade gold has been identified and there is evidence of historic production.

 

–    Review the potential for commercial transactions over certain license interests to bring in additional project partners to fund and accelerate ground exploration.

 

–      Review the possibility of listing of some or all of the Victoria licence application interests on a North American Stock Exchange to demonstrate underlying value and access pools of project level working capital for accelerated ground exploration .

Botswana – Ditau Camp Project

(RARE EARTHS)

(Under Due Diligence)

Rationale:

Power Metal considers Botswana to be a premium destination for exploration in Africa, with transparency and good practice embedded at all levels.

The demand for sources of rare earths from secure jurisdictions make strategic rare earth projects inherently attractive.  The extensive alkali ring structures on the Ditau Camp Project (the “Ditau Project”), and the association with carbonatites make Ditau an interesting exploration target of some size and scale.

Moreover Power Metal has team members and advisors experienced in rare earths exploration enabling the Company to structure our exploration planning in an efficient and targeted manner.

The Ditau Project comprises two prospecting licences in Botswana covering a combined 1,385 sq km of ground in south-west Botswana.

Power Metal is currently conducting due diligence with current project owner Kavango Resources plc (LON:KAV).

Kavango has reported the Ditau Prospect is considered to host at least 10 alkali ring structures aligned along a SW trend. There is strong evidence that these structures are associated with post Karoo age Carbonatites that lie at shallow depths beneath 60 to 70m of Kalahari sand cover. Carbonatites are the primary source of Rare Earth Metals (REEs), niobium and other minerals

Power Metal and its technical advisers are now expediting the Ditau Camp project due diligence which if successful will see the Company holding a 51% interest and partner Kavango Resources plc (LON:KAV) holding 49%. 

The recent financing enables the Company to fully consider all the options in respect of this project, and to potentially accelerate ground exploration to further enhance the current geological understanding.

NEAR TERM TARGETS:

–  Complete due diligence and conclude a commercial transaction.

 

–  Launch ground exploration programme.

Botswana – Molopo Farms Complex Project

(Nickel Copper PGMs)

Rationale:

As noted above, Botswana is a leading African jurisdiction for exploration opportunities.  Power Metal team members have been following the progress of Kalahari Key Mineral Exploration (Pty) Limited and the Molopo Farms Project (the “MFC Project”) in Botswana for some time and have been impressed with the commitment, dedication and thoughtful geological approach taken to reach each stage and narrow down to drill-ready targets where we are today.

The Kalahari Key team, including a number of experienced geologists, are large shareholders in Kalahari Key Mineral Exploration (Pty) Limited where as shareholders their returns will come from a discovery that they feel confident the project may deliver.

Power Metal is backing the Kalahari Key team, an extensive amount of work and an application of geophysical targeting where the feedback has been that the high-profile targets absolutely justify the investment in drilling.

The MFC Project is a nickel-copper-PGMs project in south-west Botswana owned outright by Kalahari Key.  It is Kalahari Key’s single project focus at present.

Power Metal owns 18.26% of Kalahari Key, (the single project ultimate holding company).

By expending US$500,000 in 2020 to undertake the drill programme Power Metal will earn a 40% direct project interest in the MFC Project.  That will give Power Metal an effective economic interest of 50.96% in the MFC Project.  Power Metal has this spend commitment in the bank and foreign currency accounts, ready to deploy when required.

Kalahari Key has submitted the Environmental Management Plan (“EMP”) for the MFC Project to the Department of Environmental Affairs (“DEA”) and subject to approval being received Kalahari Key can complete final preparations including contractor selection and mobilisation. 

Drill targets and holes are well defined and the programme will seek the discovery of a major nickel sulphide deposit. Drilling is currently planned to commence in the coming months however this is subject to receipt of EMP approval, drill contractor finalisation and mobilisation arrangements.

NEAR TERM TARGETS:

–  Receipt of Environmental Management Plan approval.

 

–  Confirmation of drill programme arrangements and mobilisation.

 

–  Commencement of drilling.

Cameroon Project

(Cobalt – Nickel)

Rationale:

The Cameroon project licenses sit near or adjacent to the large scale Nkamouna cobalt-nickel deposit.

From a nearology perspective the project had some attractiveness whereby further exploration may demonstrate similar potential mineralisation to Nkamouna.

Being a large-scale project located in a remote and challenging location considerable financial resources would be required to prove up a deposit. 

That said Power Metal considered that by the application of reasonably targeted exploration, a greater understanding of our licenses could be achieved.  If our work programme demonstrated geological similarity to Nkamouna, this could considerably enhance the project’s valuation for the Company.

Note  : With respect to Nkamouna,   Geovic published an NI 43-101 compliant Mineral Resource   1    on the Nkamouna deposit with a total Measured, Indicated and Inferred Mineral Resource of 323mt of 0.21% cobalt, 0.61% nickel and 1.26% manganese   .

 1       Source: NI 43-101 Technical Report, Geovic Mining Corp by SRK Consulting, 02 June 2011 (viewable at Edgar Online)

Exploration work undertaken in 2019 identified elevated vanadium and titanium within the project area and also provided further information for targeting of additional exploration to seek cobalt mineralisation at higher elevations than previously, within thicker lateritic cover.

Review work is now to be accelerated to outline the next steps for the 100% owned project.

There is an argument, given the flexibility provided by the recent financing, to undertake a further reasonable cost programme in Cameroon. This would principally target cobalt mineralisation through additional pitting but also further investigate the vanadium and titanium anomalies. We are considering this at present.

There is also interest in Cameroon from other organisations who are more active in the country and there may be the possibility for corporate transactions including joint ventures and/or disposal of our interests. 

NEAR TERM TARGET: Launch of a further exploration programme, at reasonable cost and/or the completion of a commercial transaction in respect of the interests.

The DRC – Kisinka Project

(Copper – Cobalt)

Rationale:

The Kisinka project is located within the Democratic Republic of the Congo (‘DRC’) a known location for large scale copper-cobalt deposits and within an interesting region geologically within the DRC.

Review of the available project data in early 2019 indicated the potential to implement reasonable cost initial exploration programmes to test the geological structures and potential copper-cobalt mineralisation.

On a risk-reward basis, and given the local knowledge held by the members of the Power Metal team and their advisor network, it was considered viable to invest in initial exploration.

In mid-2019 Power Metal undertook a termite mound sampling programme at its Kisinka Project in which Power Metal has a 70% interest.  This programme demonstrated a 6.8km copper anomaly which has been followed up by a recently completed and successful pitting and mapping programme.

Following the confirmation and extension of the 6.8km copper anomaly recently and positive X-ray fluorescence (‘XRF’) results indicating the presence of copper and cobalt, the company is awaiting receipt of assay results. 

This will complete the exploration dataset from the H1 2020 programme and help drive the next steps, which are expected to involve geophysics and further pitting, leading to drilling of key targets.

The recent financing enables the company to accelerate this next programme should this be considered the best course of action.

NEAR TERM TARGET:

–  Receive and interpret assay results from the recent pitting programme.

 

–  Design and implement an early follow up exploration programme.

Tanzania – Haneti Project

(Nickel – PGMs – Gold – Lithium)

Rationale:

In 2019 the Haneti project (“Haneti”) provided Power Metal with exposure to a large strategic opportunity in the Haneti Itiso Ultramafic Complex at a time when large scale nickel projects were increasingly becoming of interest, particularly to larger size mining companies.

Katoro Gold and previous owner Kibo Mining plc spent a number of years developing their understanding of the large Haneti land package and geological system to the point of identifying two high profile targets for drilling.

As such the Company entered the Haneti project at a key point in its development and on the cusp of a value inflection as the project moved into drilling and the prospect of a major nickel sulphide discovery.

In May 2019, Power Metal exercised an option with Katoro Gold plc (LON:KAT) to acquire an initial 25% stake in the Haneti project.

The Haneti Project covers an area of circa 5,000 sq km and is a polymetallic system with identified potential for nickel (sulphide and laterite), Platinum Group Metals (‘PGMs’), copper, gold, lithium and rare earth elements (“REEs”).

The principle target zone is an 80 km long ultramafic belt with grades from surface sampling of up to 13.6% nickel and 2.33 g/t combined platinum and palladium.

Within the 80 km ultramafic belt is the principle target, Mihanza Hill, where 2015 geophysical work identified significant extensions to nickel sulphide prospective target rock formations and geochemical interpretation has identified prospectivity for chonolith type nickel-copper-PGM mineralisation.

Power Metal is working now with joint venture partner Katoro Gold plc (LON:KAT) in respect of operational plans for  Haneti which is 25% held by Power Metal, and 75% by Katoro Gold.  Power Metal may increase its holding to 35% by paying Katoro Gold £25,000 in cash by 31 August 2020.

Power Metal is now financed to a level where it can stand alongside Katoro Gold in a further exploration programme at Haneti and thus maintain its project interest.

Power Metal also notes the interest of third parties in respect of Haneti and therefore that third party involvement in the project, if occurring, could materially change the joint venture partners’ plans.

NEAR TERM TARGETS:

–  Work with Joint Venture partner Katoro to launch a maiden drill programme targeting the high-profile Nickel-PGM targets, including Mihanza Hill and Mwaka Hill, seeking a large-scale nickel sulphide discovery. 

 

–      Consider third party interest in respect of Haneti with a view to successful earn-in, joint venture or similar.

 

–  Subject to the above consider the ownership structure of the JV to maximise commercial outcome.

FINANCIAL REVIEW

Current Financial Position (unaudited)

Following the subscription financing of £1,000,000 announced on 6th July 2020 Power Metal had total assets of £3,036,970 as follows:

Total Assets

£

Intangible Assets (project related)

1,144,750

Listed Financial Assets

363,726

Unlisted Financial Assets

185,171

Trade and Other Receivables

66,680

Cash and Cash Equivalents (including £1m financing)

1,276,644

Total Assets

£ 3,036,971

 

The above ‘Total Assets’ data includes:

–  Intangible Assets and Unlisted Financial assets from the Company’s Interim Results release on 30 June 2020.

–  Listed Financial Assets based on the valuation of the underlying financial instruments on 10 July 2020.

–  Cash and Cash Equivalents drawn from bank and currency account balances on 10 July 2020, together with the 6 July 2020 net subscription financing included.

For normal day to day operations Power Metal relies upon its cash balances and listed investments to provide the resources to fund operations.  As at 10 July 2020 Power Metal had Listed Financial Assets of £363,726 and Cash and Cash Equivalents per above of £1,276,644, making £1,707,050 to deploy in business operations.

Power Metal has the ability to sell or joint venture or otherwise monetise its project interests to generate additional working capital to build its ‘balance sheet’ and to fund its business operations. That is an implicit part of the Company’s financial strategy as outlined above and will in the Company’s view be an important constituent in the building of the Company’s financial strength in the future.

The information contained within this announcement is considered to be inside information prior to its release, as defined in Article 7 of the Market Abuse Regulation No.596/2014 and is disclosed in accordance with the Company’s obligations under Article 17 of those Regulations.

 

For further information please visit https://www.powermetalresources.com/ or contact:

Power Metal Resources plc

Paul Johnson (Chief Executive Officer)

+44 (0) 7766 465 617

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Charlie Bouverat

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson                                                                                                           

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

Notes to Editors:

Power Metal Resources plc (LON:POW) is an AIM listed metals exploration and development company seeking a large scale discovery of precious or base metals.

The Company has a portfolio including key interests in Australia, Botswana, Cameroon, The DRC and Tanzania.  The interests represent large scale exploration projects targeting mainly cobalt, copper, gold, nickel and platinum group metals. Project interests range from early stage greenfield exploration to later stage drill ready prospects.

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 metals exploration.

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