6 October 2023

Power Metal Resources PLC

("Power Metal" or the "Company")

Molopo Farms Complex, Botswana - Exploration Update

Identification of High-Priority Drill Target  

Power Metal Resources PLC (AIM:POW), the AIM listed exploration Company seeking large-scale metal discoveries across its global project portfolio, announces an exploration update from its Molopo Farms Complex Project ("Molopo Farms" or the "Project" or "MFC") where the Company is targeting a district-scale nickel ("Ni") and platinum group element ("PGE") discovery in southwestern Botswana.

KEY FINDINGS

·    The previously conducted airborne electromagnetic ("EM") geophysics surveys flown in 2018, followed up with ground moving loop electromagnetic ("MLEM") geophysics surveys completed in 2022, led to the identification of targets subsequently drilled during the 2022/2023 campaign.

·    Target area T1-14 demonstrated the highest potential due to the strength of the super conductor originally identified.

·    Drillhole DDH1-14B from the 2022/2023 drill campaign did not intersect the modelled superconductor. This led the Company to engage a geophysicist to complete inversions of widely spaced audio-frequency magnetotelluric ("AMT") survey results from 2020 that was completed over target area T1-14. AMT technology can measure a wider range of conductivities compared to airborne and/or ground EM and to a greater depth.

·    Significantly, this work has led to the identification of two distinct conductors at target area T1-14 (compared to one moderately dipping conductor identified by the MLEM) including a very strong steeply dipping multi-kilometre long conductor which is co-incident with the keel of the feeder zone intrusion (see figure 1 and figure 2). This conductor has the potential to host massive sulphide mineralisation and thus has been deemed a high priority exploration target which has never been drill tested to date.

·    The second conductor identified is relatively flat lying and determined to be sedimentary in origin which led to the false targeting during the previous drilling campaign.

·    The Company is working with its technical consultants regarding the implementation of a drill programme at target area T1-14 to test this newly modelled steeply dipping conductor (see figure 1 and figure 2).

Sean Wade, Chief Executive Officer of Power Metal Resources, commented:

"Historical exploration work at Molopo Farms has been multi-year, extensive and absolutely necessary in order to narrow down key targets for exploration drilling within a very large licence footprint.  The Company is targeting major discoveries and the work completed to date has confirmed that the MFC has the required geological ingredients to host a significant nickel deposit as found in other mafic/ultramafic belts worldwide.

"In exploration, geophysics alone is never enough and drilling is always necessary to firm up the geological model and confirm economic deposits.  As drilling is undertaken, the additional data gathered can, with other exploration techniques, provide a step-change enhancement of the technical understanding of a project and its potential.

"On this basis, the work focussed on target area T1-14 has delivered a superior database and is now the highest priority conductor target, based on all the evidence we have gathered thus far.  We are particularly excited by this development and look forward to updating the market in due course with drilling plans for this target.

"This exploration work, which is currently focussed on target area T1-14, is being conducted in parallel with our ongoing engagement with third parties with regard to commercial avenues for Molopo Farms as previously highlighted."

KEY TECHNICAL HIGHLIGHTS

·    EM surveys and drilling have proven the presence of a funnel shaped ultramafic intrusion within the northeastern part of the Molopo Farms Complex.  This dyke-like intrusion ("the intrusion") can be traced on magnetic maps for at least 20km towards the southwest where it is seen to merge with a thick sequence of layered ultramafic rocks.

·    The intrusion follows a well-established NE-SW fault zone and is interpreted to be the geological feeder zone to the Molopo Farms Complex and therefore an important target when searching for magmatic nickel and PGE rich sulphides.

·    Such feeder zones are known to be potential loci of sulphide mineralisation associated with the intrusion, for example at Voisey's Bay in Canada or Uitkomst in the eastern Bushveld Complex located in South Africa which is an age equivalent unit to the MFC.

·    Inversions of a historical AMT survey completed over target area T-14 in 2020 in the region of the known feeder zone have identified a very strong steeply dipping conductor co-incident with the keel of the intrusion.

·    The base, or keel, of such a feeder intrusion may well be the site of massive sulphide mineralisation and is thus a priority exploration target which has never been drill tested to date.

·    As a result, drilling plans are currently being developed by Power Metal's technical team in order to optimally test this target.

·    Given the success of the AMT technology and inversions thereof to decipher between multiple conductors at target area T1-14. A MobileMT survey (airborne AMT) is also being considered in order to further image other target areas which have only been investigated by airborne or ground EM to date.  

Discussion on Future MFC Exploration

As the demand for nickel continues to increase, exploration for magmatic sulphide deposits within mafic/ultramafic complexes will continue to be of significant interest to junior and major mining companies.

Compared to many other significant mafic provinces, the MFC is comparatively underexplored, likely as a result of the extensive Kalahari sand cover. However, based on the information provided above it is evident that the MFC has the required ingredients which could allow for the formation of a magmatic sulphide deposit(s).

To that end, one of the major challenges of exploration within the MFC is due to the fact that the mafic-ultramafic rocks intruded into Transvaal Supergroup sediments, many of which are known to be sedimentary conductors (e.g. pyritic carbonaceous mudstones).

While the presence of these iron rich sedimentary rocks is one of the key ingredients required in order to form primary magmatic nickel sulphides, the presence of multiple conductors can make drill targeting difficult, especially considering the lack of outcrop exposure within the MFC.

Due to the above considerations, Power Metal is of the belief that significant further exploration is warranted in the future at Molopo Farms, including:

·    Drilling of further drillholes at target area T1-14 where recently completed inversions of AMT data have clearly established the presence of two distinct conductors (not one moderately dipping conductor as imaged and targeted previously). Of particular interest is the steeply dipping conductor which was traced for several kilometres and which has never been drill tested. This conductor is coincident with the funnel shaped ultramafic intrusion and therefore represents a very compelling target compared to the shallow dipping lying sedimentary conductor.

·    Based on the success of the AMT survey results, complete a high-resolution mobile magnetotellurics ("MobileMT") airborne geophysical survey. MobileMT® is on the cutting edge of geophysical survey methodology and compared to time domain electromagnetics ("TDEM") has multiple advantages including:

o  Allows for good discrimination between resistive units (e.g. TDEM cannot effectively map resistive units or discriminate between 1000 ohm-m and 5000 ohm-m formations). In the case of target area T1-14 it can more easily image multiple conductors within a given survey area (compared to other EM techniques which often 'average' these conductors).

o  Provides superior depth penetration compared to high powered TDEM systems (up to 2km in certain geological environments).

o  System experiences no problems with induced polarisation ("IP") effects, zero coupling zones or super para-magnetic effects.

o  Highest efficiency and quick surveying over flat areas like southern Botswana and can average data acquisition of 100 line-km per day with a comparatively low production cost. A quote for this work has been obtained and will be held pending finalising of any next exploration steps at the MFC.

Figure 1: 1^st vertical derivative magnetics show in the background. 4 AMT cross-section lines highlight the presence of a steeping dipping conductor (blue) as well as a shallow conductor which was ultimately drilled by both historical drillholes at target area T1-14 (see Figure 2 for inset cross-section line A-A'). The total distance between L3 and L4 is approx. 6km.

Figure 2: Cross-section A-A' showing inversion results from AMT line 1. The red traces represent the location of the historical drillholes which targeted what has now been determined to likely be a shallow dipping sedimentary conductor. The large purple to blue conductor is the newly discovered steeply dipping conductor which has not yet been drill tested. The black line represents a possible drill location to target this priority conductor.

Glossary

Dyke                                                      Magmatic intrusion that is discordant with the surrounding geology.

Feeder zone                                      The plumbing system from which magma is supplied into the intrusive from the lower crust.  These can often form as elongated dykes at the base of an ultramafic layered intrusion.  Sulphide mineral accumulations can often form in the vicinity of the feeder zone.

Induced Polarisation                       IP is a geophysical imaging technique used to identify the electrical chargeability of subsurface materials.

Keel                                                       Semi-confined area with a magmatic intrusion.

Lopolith                                                A lens shaped intrusion of igneous rock.

Para-magnetic                                   Refers to the state of an atom with one or more unpaired electrons.

Pyritic mudstone                              Mudstone containing elevated amounts of iron pyrite - with refence to nickel sulphide deposits, these represent important sources of sulphur.

Transvaal Supergroup                    The Transvaal Supergroup is a group of rocks in northern South Africa and southern Botswana, situated on the Kaapvaal Craton, composed of sedimentary and volcanic lithologies.

Ultramafic rock                                 An igneous rock in which has a very low silica content and in which more than 90% of the rock is composed of magnesium and iron-rich minerals like pyroxenes, amphiboles, and olivine.

Power Metal Interest

Power Metal holds an 87.71% interest in Kalahari Key Mineral Exploration Pty Ltd, a Botswana private company, which holds a 100% interest in the Molopo Farms Complex Project.

QUALIFIED PERSON STATEMENT

The technical information contained in this disclosure has been reviewed and approved by Mr Nick O'Reilly (MSc, DIC, MIMMM, MAusIMM, FGS), who is a qualified geologist and acts as the Qualified 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.