20 May 2024

Power Metal Resources PLC

("Power Metal" or the "Company")

Completed Acquisition - Strategic Metals Extraction

Power Metal becomes 75% owners of GSA (Environmental) Limited

Power Metal Resources PLC (AIM:POW, OTCQB:POWMF), the London-listed exploration company seeking large-scale metal discoveries across its global project portfolio, is pleased to announce the completion of the acquisition of 75% of the Issued Share Capital ("ISC") of GSA (Environmental) Limited ("GSAe") initially announced on 29 February 2024.

Following successful completion of due diligence and customary pre-conditions, all parties have executed on the Share Purchase Agreement (the "Agreement") making Power Metal 75% owners of GSAe.

GSAe is a privately owned UK-headquartered engineering technology provider and process licensor, which specialises in the extraction of critical and strategic metals from 'secondary sources' including power station ash, refinery waste, titanium dioxide waste and spent catalysts focused on creating a suite of by products rather than industrial waste. GSAe aspires to be the first-choice global provider of technological solutions to environmental problems posed by toxic metals in waste products.

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

"I am delighted to announce the completion of this seminal transaction for Power Metal. We have very exciting plans for this business and are looking forward to updating shareholders soon on contract signings and progress towards a significant revenue contribution to the Power Metal portfolio."

CORPORATE HIGHLIGHTS GSAe

§ Founded in 2003, GSAe specialises in metals extraction from secondary sources (e.g. refinery residues, Titanium Dioxide ("TiO2") waste, fly ash, spent catalysts), providing a sustainable source of strategic metals including scandium, yttrium, niobium and other rare earth elements (REE) as well as vanadium and nickel all for use in high growth advanced manufacturing.

§ GSAe's robust and adaptive technology enables the production of high purity strategically important metals at production costs that substantially undercut traditional mining routes. Using hydrometallurgical techniques, GSAe's metals extraction technology allows for improved sustainability combined with reduced environmental impact by preventing otherwise harmful compounds going to landfill. It aspires to negate the need for landfill by creating a suite of by-products for use in other industries.

§ GSAe currently has two Memorandum of Understanding in place with major Saudi Arabian supplies of vanadium and nickel bearing fly ash with advanced research due to commence shortly to optimise the metal extraction process route to enable detailed plant design, construction, commissioning and even operation as required for potentially several treatment facilities initially in Saudi Arabia.

§ GSAe is currently working with a UK firm on the next phase of a program to develop a demonstration scale plant in the UK to process two types of industrial waste for extraction of critical metals from a single plant in the region of 20,000 ton per annum throughput. On successful implementation of this plant, initial discussions have commenced on the potential to construct a much larger plant with a targeted 200,000 ton a year capacity for long term processing and metal extraction as well as zero waste production also in the UK.

§ GSAe is working with a major Saudi Arabian mining company to evaluate processes to extract REE and other strategic metals from tens of millions of tons of mine tailings in Saudi Arabia.

§ GSAe is in discussions with several mining and smelting companies to find solutions for their current and future mine tailings and slag residue.

§ GSAe currently have a UK Government Grant through Innovate UK for research in a consortium consisting of GSAe and the University of Lincoln ("UoL") as partners, alongside commercial supplier MLC (formerly Mississippi Lime Company) and metals trader Lipmann Walton & Co Ltd whereby GSAe leads the project and provide patented technology for metals extraction and concentration. UoL is contributing proprietary technology in polymer manufacturing and filtering, while MLC will supply waste samples and offer technical advice. With over 2 million tonnes of metal-containing waste in landfills in the UK alone this research is a significant step towards a commercial operation with GSAe partnership.

AGREEMENT TERMS

Maximum total consideration payable is capped at £1 million, structured as follows:

-      Power Metal will pay initial consideration of £75,000 through the issue of new ordinary shares of 2p each ("Ordinary Shares") in Power Metal at an issue price of 14.5813p each, being the volume weighted average price ("VWAP") in the 5 trading days immediately prior to the completion of conditions precedent, which occurred on 17 May 2024 (the "Effective Date"). Accordingly, 514,357 new Ordinary Shares ("Consideration Shares") will be issued;

-      Immediately upon execution by GSAe of a commercial agreement with a third-party of no less than £160,000 value (the "Third-Party Agreement Date"), £75,000 payable through the issue of Power Metal Ordinary Shares at an issue price equal to the VWAP in the 5 trading days immediately prior to the Third-Party Agreement Date;

-      Upon the first anniversary of the Effective Date (the "First Anniversary Date"), £250,000 payable at the sole discretion of GSAe in cash or by the issue of Power Metal Ordinary Shares at an issue price equal to the VWAP in the 5 trading days immediately prior to the First Anniversary Date, conditional upon GSAe recording a profit in the relevant period of no less than £450,000; and

-      Upon the second anniversary of the Effective Date (the "Second Anniversary Date"), £250,000 payable at the sole discretion of GSAe in cash or by the issue of Power Metal Ordinary Shares at an issue price equal to the VWAP in the 5 trading days immediately prior to the First Anniversary Date, conditional upon GSAe recording a profit in the relevant period of no less than £650,000; and

-      Upon the third anniversary of the Effective Date (the "Third Anniversary Date"), £350,000 payable at the sole discretion of GSAe in cash or by the issue of Power Metal Ordinary Shares at an issue price equal to the VWAP in the 5 trading days immediately prior to the Second Anniversary Date, conditional upon GSAe recording a profit in the relevant period of no less than £1,000,000.

ADMISSION AND TOTAL VOTING RIGHTS

Application will be made for the 514,357 Consideration Shares to be admitted to trading on AIM which is expected to occur at 8.00 a.m. on or around 24 May 2024 ("Admission"). The 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 111,187,774 Ordinary Shares of 2p 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.