1 November 2021

Power Metal Resources PLC

("Power Metal" or the "Company")

 Power Metal Acquires 100% of Pilot Mountain Project Nevada

Power Metal and Wholly-Owned Subsidiary Golden Metal Resources Ltd Exercise Option to Acquire the Pilot Mountain Project, Nevada, USA

Power Metal Resources PLC (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces that the Company and its wholly-owned subsidiary Golden Metal Resources Ltd., ("Golden Metal") have exercised the option (the "Option") to acquire a 100% interest in the Pilot Mountain Project ("Pilot Mountain" or the "Project") located  in Nevada, United States of America ("USA").

HIGHLIGHTS

Option Exercise:

·    Golden Metal will acquire a 100% interest in Pilot Mountain (the "Acquisition"), the consideration for which will be paid by Power Metal, as outlined in detail below, but principally including the issue of US$1.65million of Power Metal new ordinary shares of 0.1p each ("Ordinary Shares") at an issue price of 2.5p (48,118,920 new Ordinary Shares - equivalent to 3.59% of current Power Metal issued share capital post transaction share issuance and subject to a minimum 6 month hold period ).

Listing of Golden Metal:

·    Power Metal plans to spin-out Golden Metal into a new listing on the London capital markets. Golden Metal will hold 100% interests in Pilot Mountain together with the Garfield and Stonewall projects.  Golden Metal will also hold the right to earn a 100% interest in the Golconda Summit project. All projects are located in Nevada, USA.

·    Further announcements will be made to outline listing plans and project exploration/development plans.

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

"My thanks to the Thor Mining team for their support during the due diligence process, and to the Power Metal and Golden Metal team members and advisors for their work.

Pilot Mountain is a project I am familiar with having served on the board of Thor Mining plc 2016-2018 when various work was undertaken at the Project and much operational progress secured.

A visit to site in November 2016 clearly demonstrated the scale of the project and our recent work as part of the due diligence process has highlighted dual upside potential from exploration and development perspectives.  We hope to articulate much more on our recent findings and forward plans shortly.

With this important acquisition we have completed the portfolio of Golden Metal and can now move forward proactively with our listing plans.

Golden Metal has been a key focus during 2021 and over the course of the year we have assembled and crafted what we believe will be an exciting proposition for London market investors. "  

PILOT MOUNTAIN OWNERSHIP STRUCTURE

Following completion of the ownership transition Golden Metal will hold 100% of Black Fire Industrial Minerals Pty Ltd (Australian private company) which owns 100% of Industrial Minerals (USA) Pty Ltd (Australian private company) which owns 100% of: BFM Resources Inc and Pilot Metals Inc (USA private companies) which own tenements covering the entire Pilot Mountain Project.

Further disclosures

As at the date of option announcement on 31.08.21 the following disclosures were made:

As at 30 June 2020 BFM Resources Inc had Gross Assets of AUD$21,449 (circa £11,317) and incurred no profit or loss (AUD$Nil) for the year ended 30 June 2020.

As at 30 June 2020 Pilot Metals Inc had Gross Assets of US$3,055,411 (circa £2,226,602) and a loss of US$106,164 (circa £77,366) for the year ended 30 June 2020.

As at 30 June 2020 Black Fire Industrial Minerals Pty Ltd on a consolidated basis had Gross Assets of AUD$5,181,951 (circa £2,738,397) and a loss of AUD$154,690 (circa £81,746) for the year ended 30 June 2020.

It is further noted that since the announcement of the Pilot Mountain option, Thor Mining plc transferred the Pilot Mountain project and all holding companies to "Held for Sale Assets" with a written down value of £1,050,000 as at 30/06/21 their reported financial year end.

TRANSACTION INFORMATION

Under the terms of the Agreement Golden Metal will acquire a 100% interest in Pilot Mountain, from Thor Mining plc ("Thor Mining" or the "Vendor")

Option Exercise

Power Metal's 100% owned subsidiary Golden Metal will now acquire Pilot Mountain on the following terms:

Power Metal will pay US$115,000 in cash consideration to Thor Mining and US$1,650,000 of consideration through the issue to Thor Mining of 48,118,920 new Ordinary Shares at an issue price of 2.5 pence per share ("Initial Consideration Shares").

Thor Mining will hold the Initial Consideration Shares in full for a minimum of 6 months after the Option Exercise date and thereafter the Initial Consideration Shares will become freely tradable in 25% instalments (25% tradable 6 months after Option Exercise date, 50% - 9 months after Option Exercise date, 75% - 12 months after Option Exercise date and 100% - 15 months after Option Exercise date.)  This trading restriction period may be varied with the written agreement of both parties.

In addition, Power Metal will issue to Thor Mining 12.5 million warrants to subscribe for Ordinary Shares with an exercise price of 4p per Ordinary Share and life to expiry of 3 years from the Option Exercise date ("Initial Consideration Warrants").  Should the volume weighted average price ("VWAP") of Power Metal shares meet or exceed 10 (ten) pence for 5 consecutive trading days Power Metal may serve notice on Thor Mining providing 14 calendar days to exercise and pay for the Initial Consideration Warrants or the Initial Consideration Warrants will be cancelled.

Should Thor Mining exercise the Initial Consideration Warrants above within 12 months from the Option Exercise date, Thor Mining will receive one for one replacement warrants to subscribe for Ordinary Shares at a fixed price of 8p per Ordinary Share, and life to expiry ending 3 years from the date of Option Exercise ("Super Warrants"). Should the Power Metal volume weighted average share price meet or exceed 20p for five consecutive trading days Power Metal may at any time issue Thor Mining with a written notice providing 14 days to exercise and pay for the Super Warrants or the Super Warrant will be cancelled.

Tail Benefit

Power Metal will issue Thor Mining with a further US$500,000 of consideration in new Ordinary Shares if Golden Metal publishes a JORC or 43-101 compliant resource at Pilot Mountain which increases against current declared levels by 25% across total indicated and inferred categories within two years after the Agreement date.  The number of Ordinary Shares to be issued will be calculated based on the volume weighted average Power Metal share price in the ten trading days immediately preceding the announcement by Golden Metal of the JORC or 43-101 compliant increase.

Additional Terms

Thor Mining and their professional corporate, licensing and geological teams will continue to work with Power Metal and Golden Metal to assist with Pilot Mountain ownership transfer and to manage local corporate & exploration/development operations in the 12 months following the Option Exercise date.  Power Metal and Golden Metal will pay for any assistance provided post Acquisition on reasonable commercial terms to be agreed.

ADMISSION AND VOTING RIGHTS

Application will be made for the 48,118,920 Initial Consideration Shares to be admitted to trading on AIM which is expected to occur on or around 8 November 2021 ("Admission"). The Initial Consideration Shares will rank pari passu in all respects with the Ordinary Shares of the Company currently traded on AIM.

Following Admission, the Company's issued share capital will comprise 1,341,839,987 ordinary shares of 0.1p each. This number will represent the total voting rights in the Company and 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.

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 (LON:POW) is an AIM 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 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 Exploration Programmes Underway/Results Awaited

Power Metal now has the following exploration completed with results awaited or exploration underway:

-      Silver Peak Project (Canada) - diamond drill programme completed targeting high-grade silver (laboratory assay results awaited)

-      Authier North Lithium Project (Canada) - soil & rock sampling completed (laboratory assay results awaited)

-      Athabasca Uranium (Canada) - Phase I exploration commenced and field results, together with laboratory assay testing of samples collected, awaited.

-      Tati Gold/Nickel Project (Botswana) - reverse circulation drilling completed (field results, together laboratory assay results awaited)

-      Molopo Farms Complex (Botswana) - further samples being tested for nickel sulphide and platinum group elements ("PGEs") from diamond drill programme completed (laboratory assay results awaited)

-      Ditau Project (Botswana) - preparatory exploration work underway on target I10 leading to planned accelerated drilling targeting rare earth elements and base metals

-      Kalahari Copper Belt (Botswana) - results from ongoing exploration across the South Ghanzi Project and further exploration at the more recently acquired South Ghanzi Extension and Mamuno licence areas

-      Wallal Gold/Copper Project (Australia) - geophysics results from 2D seismic processing and passive seismic awaited

-      Victoria Goldfields (Australia) - results from ongoing exploration across 848km² of granted exploration licences