23 February 2022

Power Metal Resources plc

("Power Metal" or the "Company")

Selta Uranium and Rare Earth Element Project - All Exploration Licences Granted

Power Metal Resources plc (LON:POW), the London listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces an update in respect of the Selta Project ("Selta" or the "Project") prospective for Rare Earth Element ("REE") and Uranium ("U") mineralisation located in the Northern Territory, Australia.

A map showing the location of the Selta Project may be viewed through the following link:

https://www.powermetalresources.com/selta-project-overview-map-2/ 

BACKGROUND

Selta is held within URE Metals Pty Limited ("URE"), an Australian private company and wholly owned subsidiary of First Development Resources Limited ("FDR") which is planning to list on the London capital markets in Q2 2022.

The formal grant of the Selta Project licences triggers the issue of FDR stock to the vendors of URE and reflecting this Power Metal currently holds an 83.33% interest in FDR.

URE was acquired by FDR in a transaction managed and funded by Power Metal and the announcement dated 19 November 2021 in respect of this transaction may be viewed through the following link which includes details of the FDR stock issuance on grant of the Selta licences:

https://www.londonstockexchange.com/news-article/POW/uranium-rare-earths-acquisition-australia/15219001 

HIGHLIGHTS

-      URE has received formal notification from the Northern Territory Government Department of Industry, Tourism and Trade that all three Selta Project Mineral Exploration Licences have now been granted for a term of six years  (16 February 2022 to 15 February 2028).

-      The grant includes Exploration Licence ("EL") 32737 (780.85km²), EL 32738 (312.17km²) and EL 32755 (481.9km²) (see below for further information).

-      In total URE now holds 1,574.92km² under granted licences with a key focus on uranium and REE mineralisation.

-      FDR have commenced an in-depth review of all available geological, geophysical and geochemical data associated with the Selta Project and adjacent ground. The objective of the review is to identify priority targets for further investigation.

Tristan Pottas Chief Executive Officer of First Development Resources Ltd commented:

"Our work to date in respect of the Selta Project has highlighted considerable geological potential, notably focused on uranium and Rare Earth Elements.  An in-depth review of the Project is now underway and this couldn't be more timely with the announcement today that all licences have been granted.

The team considers the Selta Project to be a key FDR business interest and the accumulating evidence from fellow licence holders in the vicinity of the Project supports this proposition, as you will see in the 'Selta Project - Background' section below.

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

"The grant of the Selta licences provides a real boost to FDR, as the company seeks a listing in London in the coming months.

Today's news is also a significant step forward for Power Metal, providing our shareholders with exposure to another uranium exploration opportunity and complementing the wholly owned uranium projects surrounding the Athabasca basin in Saskatchewan, Canada.

Power Metal is experiencing considerable interest in its uranium exploration properties and we see this as an area of real value generation going forward."

SELTA PROJECT - BACKGROUND

The Selta Project, considered by FDR to be prospective for uranium ("U") and rare-earth elements, ("REEs") is located in Australia's Northern Territory within the prospective but largely under-explored central Aileron Province, between the Georgia and Ngalia Basins, in a region the Northern Territory Government has declared prospective for uranium mineralisation.

The Project comprises three granted exploration licences covering a total land area of 1,574.92 km² including EL 32737 - 780.85km², EL 32738 - 312.17 km² and EL 32755 - 481.90 km².

The Northern Territory hosts some of Australia's best known and high-grade uranium deposits and has a long history of uranium mining. In addition, the Aileron Province is a major exploration target for base metals including nickel ("Ni") and copper ("Cu"), REEs and orogenic gold ("Au") with numerous companies actively exploring within the region.

The Selta Project borders Prodigy Gold NL (ASX:PRX), IGO Ltd (ASX:IGO) and Canadian listed Megawatt Lithium and Battery Metals Corp (CSE:MEGA) ("Megawatt"); and is less than 70 km northwest of Arafura Resources' (ASX:ARU) high-grade, world-class Nolans Bore REE deposit.

The Nolans Bore REE-phosphate-uranium-thorium deposit is one of the largest deposits of its kind in the world with a JORC (2012) compliant Mineral Resource of 56 million tonnes at an average grade of 2.6% total rare-earth oxides and 11% phosphate (P₂O₅). Commercial production is targeted for late 2024, with the Feasibility Study considering a 4,440 tonne per annum neodymium ("Nd") - praseodymium ("Pr") oxide producing open pit mining operation with a 38 year mine-life and an NPV_8% of US$1.011B.¹

The Selta Project's southern claim boundary abuts the Megawatt landholding. Promising surface samples collected within the Megawatt property coupled with a known radiometric trend is currently postulated by the Company to link the Megawatt property with Arafura's ground to the south-east.

MegaWatt recently announced exploration for REEs and uranium was set to commence at their adjacent Arctic Fox Project, located immediately south of Selta, and their Isbjorn Project also within the Central Northern Territory region.²

The Selta Project area is currently located along strike to the northwest of a radiometric trend and future work will seek to extend that trend within the Selta Project. The underlying geology within the Selta Project is interpreted by the Company to be comparable to the Nolans Bore deposit with REE and U mineralisation at Nolans Bore being hosted within G6 granites which are postulated by the Company to be compositionally similar to the G5 granite prevalent across the Selta Project.

Notably, within 5km of the Selta Project's eastern boundary are three REE occurrences with results up to 543ppm Nd and 148ppm praeseodymium hosted within the G5 granite. Selta's exploration potential has been enhanced by encouraging historical surface sampling results³ of up to 3.8 ppm U in soil samples, 27.2 ppm U in stream sediment samples and up to 244 ppm U in rock chip samples, all of which led to a study by The Australian Mineral Development Laboratories³ stating:

 "…the amount of uranium moved by solution or erosion is large enough for there to be several potentially economic orebodies."

In addition to uranium the Company believe that the Selta project has significant potential for Cu, Au and silver (Ag) mineralisation.

Prodigy Gold's Reynold Range Gold Copper Project, which borders the Selta Project's lease area, has delivered encouraging results  across four prospects for Cu, Au and Ag with reverse circulation drilling intercepts yielding 29m @ 2.32g/t Au (Falchion Prospect) and 17m @ 3.93g/t Au  (Sabre Prospect) and surface samples of up to 7.5g/t Au, 783g/t Ag and 19.3% Cu  (Scimitar Prospect) and 0.55g/t Au, 271g/t Ag and 20.3% Cu at the Reward Prospect.⁴

REFERENCES

1.   Arafura Resources Limited Annual General Meeting Presentation, 21/10/2021. Available at: https://wcsecure.weblink.com.au/pdf/ARU/02438942.pdf 

2.    Megawatt Exploration for REEs & Uranium within Central Northern Territory Properties Set to Commence and Marketing Agreement. Available at Megawatt Lithium and Battery Metals Exploration for REEs & Uranium within Central Northern Territory Properties Set to Commence ... - MegaWatt (megawattmetals.com)

3.    The Australia Mineral Development Laboratories (CR 74/19) Sixth Progress Report MP 4976/73 Geochemical Survey, Arunta Area Amdel (December 1973)

4.    PRX ASX Release - 20 May 2021. Available at:  https://wcsecure.weblink.com.au/pdf/PRX/02376469.pdf 

COMPETENT PERSON STATEMENT

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

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 has exploration programmes completed or underway, with results awaited, as outlined below:

^A should Kavango exercise their option to acquire Kalahari Key, Power Metal interest would reduce to 40% of the Molopo Farms Complex project