Power Metal Regulatory News (POW)

28 June 2024

Power Metal Resources plc ("POW", "Power Metal" or the "Company")

Interim Results

Power Metal Resources plc (AIM:POW, OTCQB:POWMF), the London-listed exploration company with a global project portfolio, announces its unaudited interim results for the six month period ended 31 March 2024 (the "period").

Sean Wade, Chief Executive Officer of Power Metal commented: "Over the past six months, we have continued to make positive developments across our project portfolio, showcasing its value potential. The numerous agreements signed, and discussions carried out with potential investors and joint venture partners, emphasise the strong position Power Metal is in as it develops its projects, which focus on key commodities in globally significant regions."

KEY DEVELOPMENTS IN THE HALF YEAR TO 31 MARCH 2024

- Raising of £1.3 million at a premium to the prevailing share price, cornerstoned by UK-based high net worth investors and a strategic Saudi Arabian investor;

- Following positive exploration work carried out at the Tati Gold Project ("Tati"), located in Botswana, the Company recommenced field operations at the project with six unique additional target areas being identified for detailed soil sampling. The soil sampling assay results confirmed the presence of three significant gold-in-soil geochemical anomalies, proving further continuity within the 8km-long gold trend at Tati. Of the 446 samples taken, three returned greater than 500 parts per billion ("ppb") gold ("Au") and an impressive 29 samples returned 100ppb Au or above;

- Radon gas sampling completed at the Tait Hill and Soaring Bay projects, part of Power Metal's uranium portfolio located in and around the prolific Athabasca Basin in Saskatchewan, Canada, confirmed multiple significant uranium targets. Additionally, soil geochemical sampling, carried out over the same targets, further demonstrated significant uranium prospectivity and enabled refinement of potential drill targets;

- Power Metal also undertook Unmanned Aerial Vehicle ("UAV") magnetic geophysics surveys covering the Clearwater and Cook Lake Projects which generated multiple high-priority targets for future exploration;

- Disposal of Kavango Resources plc shares, raising £556,000. Power Metal retains a 1% net smelter royalty return;

- High-level geophysical and geographical information system-based desktop study completed at the Selta Project, operated by First Development Resources plc, in which Power Metal holds a 58.59% interest. The study significantly expanded the existing rare-earth element and lithium exploration target area and generated new target areas;

- Signing of a non-binding Memorandum of Understanding ("MoU") with the Ministry of Investment of the Kingdom of Saudi Arabia to explore the possibility of joint collaboration efforts towards the identification and realisation of high value-added investment opportunities;

- Commencement of a diamond drilling programme at the Molopo Farms Complex nickel and platinum group element ("PGE") Project ("Molopo Farms") in Botswana, targeting a steeply-dipping high-priority conductor at target area T1-14;

- On behalf of the Company, Kalahari Key Mineral Exploration Pty Ltd, received extension license documents from the Botswana Department of Mines, for Prospecting Licence 310/2016 and PL311/2026 at Molopo Farms, granting the Company the right to prospect for metals for a two-year period;

- Acquisition of the 31.09km2 Richards Lake uranium property, located in the Athabasca Basin, via direct mineral claim staking;

- Signed Heads of Terms for the acquisition of a 75% interest in GSA (Environmental) Limited, a privately owned UK-headquartered engineering technology provider and process licensor, which specialises in the extraction of strategic metals from 'secondary sources' including power station ash, refinery waste, titanium dioxide waste and spent catalysts, while also producing much more environmentally friendly residue;

- Establishment of Power Arabia Limited to encompass all of Power Metal's activities across the Arabia Gulf, with several binding MoU's for potential joint ventures in negotiation stages;

- Signing of Heads of Agreement to conditionally dispose of the Company's entire 49.9% interest in New Ballarat Gold Corporation plc which wholly owns Red Rock Australasia Pty Ltd, the local operating company holding exploration interests in the Victoria Goldfields, Australia and in South Australia, for consideration up to £1.5 million potentially payable in cash, Red Rock Resources plc ordinary shares and warrants; and

- Binding earn-in agreement signed with RIWAQ Al-Mawarid for Mining ("RIWAQ"), a special purpose subsidiary of EV Metals Group plc ("EVM") focused on the development of the Saudi supply chain for critical raw materials from the exploration, mining and processing of minerals and metals in the Kingdom of Saudi Arabia. POW has the right to earn a 20% interest in RIWAQ's 15 tenements by sole funding US$350,000 expenditure on the tenements within 12 months from date of execution of the Binding Agreement, with a right to a further 10% by sole funding US$150,000 within six months following earning of 20% interest.

KEY DEVELOPMENTS SINCE 31 MARCH 2024

- Granted approval to trade on the OTCQB Venture Market in the US, which commenced on 10 April 2024;

- Successful intersection of the targeted steeply dipping geophysical superconductor at Molopo Farms on 23 April 2024;

- Acquisition of 75% of the issued share capital of GSA (Environmental) Limited on 20 May 2024;

- Conditional agreement by ASX listed Aruma Resources Limited for the full acquisition of NHMHA, which includes Power Metal's Wilan Project and additional licences in Mt Isa region of Queensland, announced on 28 May 2024. Power Metal owns 20% of NHMHA issued share capital and the agreement provides Power Metal with exposure to uranium and copper exploration potential on the ASX Markets;

- On 3 June 2024, Power Metal entered into a legally binding subscription agreement with ACAM LP ("ACAM") for a £2 million investment in Power Metal by way of a loan note with attaching warrants. The Company also entered into an eight-week exclusivity period and a non-binding term sheet with ACAM with the intention of forming a uranium-focused joint venture involving Power Metal's entire portfolio of uranium licences; and

- As announced on 13 March 2024, Power Metal entered into a Heads of Terms with Red Rock Resources Plc ("RRR"), the local operating company holding exploration interests in the Victoria Goldfields, to sell its 49.9% shareholding in New Ballarat Gold Corporation Plc ("NBGC"), which wholly owns Red Rock Australasia Pty Limited ("RRAL"), in South Australia, for up to £1.5 million payable in cash, RRR ordinary shares and RRR warrants, subject to various conditions precedent being met. On 12 June 2024, the conditions precedent of the transaction were either fulfilled or waived. Accordingly, completion of the disposal of the Company's 49.9% interest in NGGC, was announced on 19 June 2024.

- On 19 June 2024, Power Metal announced that a share option agreement ("Option" or the "Agreement") has been entered between Power Metal, Tati Greenstone Resources PTY LTD ("TGR") a company incorporated in Botswana held as a 100% owned subsidiary of Power Metal, and Tuscan Holding PTY Ltd, ("Tuscan"), a company incorporated in Botswana, (collectively the "Parties"). Subject to exercise of the Option, Power Metal, through TGR, will retain a 25% interest free carried to production in Prospecting Licence 049/2022 (which covers the Cherished Hope Mine) and from which it is intended that TGR will become a material dividend paying entity from net cash flow generated from gold production. Power Metal will retain the right to a 100% interest in other prospecting licences held by TGR other than PL049/2022. 

- On 27 June 2024, the Company announced it completed a diamond core drill hole, DDH1-14C, at Molopo Farms, to a depth of 832.6m. Drilling successfully intersected the targeted steeply dipping geophysical superconductor at the high priority Target Area T1-14. Significant sulphur assays of up to 3.46% were identified alongside a sample which returned anomalous nickel of 0.128%.

POWER METAL INTERESTS AT TODAY'S DATE

The latest updated review of Power Metal's business interests is provided in the Company's investor presentation which may be accessed here:

https://www.powermetalresources.com/investors/presentation/

In addition, a single page Business Overview is provided for investors through the following link:

https://www.powermetalresources.com/company/

LATEST POSITION OF POWER METAL INTERESTS AND TARGETED OBJECTIVES FOR 2024

Priority Exploration and Potential Exploration Project Joint Ventures

Investment Holdings and Disposals Planned/Underway

Note: other project packages within the Power Metal portfolio are also in earlier stages of disposal and/or spin-out preparations in addition to those listed below.

PROJECTS WITH NEXT STEPS UNDER CONSIDERATION

FINANCIAL HIGHLIGHTS FOR THE HALF YEAR ENDED 31 MARCH 2024

- Loss for the period, attributable to owners of the parent of £0.40 million (2023: £1.50 million), resulting in loss per share of 0.38 pence (2023: 1.78 pence);

- Financing undertaken in February 2024 raising £1.3 million;

- Total assets of £16.22 million at the period end (30 September 2023: £14.62 million); and

- Net assets of £15.38 million at the period end (30 September 2023: £13.99 million).

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

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

NOTES TO EDITORS

Power Metal Resources plc - Background

Power Metal Resources plc (AIM:POW, OTCQB:POWMF) is a London-listed metals exploration company which finances and manages global resource projects and is seeking large scale metal discoveries.

The Company has a principal focus on opportunities offering district scale potential across a global portfolio including precious, base and strategic metal exploration in North America, Africa, Saudi Arabia and Australia.

Project interests range from early-stage greenfield exploration to later-stage prospects currently subject to drill programmes.

Power Metal will develop projects internally or through strategic joint ventures until a project becomes ready for disposal through outright sale or separate listing on a recognised stock exchange thereby crystallising the value generated from our internal exploration and development work.

Value generated through disposals will be deployed internally to drive the Company's growth or may be returned to shareholders through share buy backs, dividends or in-specie distributions of assets.

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 MARCH 2024

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2024

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2024

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2023

POWER METAL RESOURCES PLC

AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2023

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 MARCH 2024

Details of significant non-cash transactions are disclosed in note 5.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT

1. Reporting entity

Power Metal Resources plc is a company domiciled in the United Kingdom. The unaudited consolidated interim financial report for the period ended 31 March 2024 comprises the results of the Company and its subsidiaries (the "Group"). The Group primarily is involved in the exploration and exploitation of mineral resources in Africa, Australia, Canada and the US.

2. Basis of preparation

(a) Statement of compliance

As permitted, IAS 34, 'Interim Financial Reporting' has not been applied in this interim report.

The financial information presented in this interim report has been prepared using accounting policies that are expected to be applied in the preparation of the financial statements for the year ending 30 September 2024.

These policies are in accordance with the recognition and measurement principles of International Financial Reporting Standards, International Accounting Standards, and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board as endorsed for use in the United Kingdom, and these principles are disclosed in the Financial Statements for the year ended 30 September 2023.

The interim results have been prepared on a going concern basis. The financial information in this interim report does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The 2024 interim financial report has not been audited.

The Annual Report and Financial Statements for 2023 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2023 was unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The interim results were approved by the Board of Directors on 26 June 2024.

(b) Judgements and estimates

Preparing the interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expense. Actual results may differ from these estimates.

In preparing this consolidated interim financial report, significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 September 2023.

(c) Going concern

The interim financial report has been prepared on a going concern basis. Although the Group's assets are not generating revenues, the Directors believe, having considered all available information, including the Company's proven ability to raise further equity funds from its supportive shareholder base, that the Group will have sufficient funds to meet its expected committed and contractual expenditure for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the interim financial report for the period ended 31 March 2024.

3. Significant accounting policies

The accounting policies applied by the Group in this consolidated interim financial report are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 September 2023.

4. Earnings per share

Basic loss per share

The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of the parent of £399,000 (2023: £1,495,000), and a weighted average number of ordinary shares in issue of 106,064,426 (2023: 84,071,550).

The weighted average number presented for the period ending 31 March 2023 above and the year ending 30 September 2023 in the statement of comprehensive income have been adjusted for the effect of a 20 to 1 share consolidation.

5. Issues of Equity

In February 2024, the Company raised £1.3 million, before expenses, through the issue of 130,000,000 new ordinary shares of 0.1p each in the company at an issue price of 1 pence per share.

In March 2024, the Company consolidated its ordinary share capital resulting in every 20 existing ordinary shares of 0.1p each being consolidated into 1 new ordinary share of 2p each. The number of shares prior to consolidation was 2,213,468,340.

At the period end, the Company had 110,673,417 Ordinary Shares in issue (30 September 2023: 2,080,106,256).

At the date of this interim report, the Company had 111,187,774 Ordinary Shares in issue.

**Ends**