Audited Financial Results

Power Metal Resources PLC

21 February 2024

 

21 February 2024

Power Metal Resources plc

("Power Metal" or the "Company")

Audited Financial Results for the Year Ended 30 September 2023

Power Metal Resources plc (LON:POW) the London listed exploration company seeking large-scale metal discoveries across its global project portfolio announces its consolidated audited results for the year ended 30 September 2023, for the Company and its subsidiaries (together the "Group").

Introduction

The cyclical downturn in the mineral resource exploration sector continued throughout the year under review, with increasing signs however that this pressure may now be easing not least with the strong increases in the prices of gold and uranium, two commodities of focus within the Company's portfolio.

The year saw the Company continue to focus on its business model of advancing robust internal exploration programmes to seek major metal discoveries and build underlying project value, whilst also looking in parallel for significant value crystallisation through corporate activity to build the value of the Company.

Exploration Activity

Athabasca Uranium Exploration

Power Metal currently has a 100% interest in 18 uranium properties covering over 1000km² in the Athabasca Region of Saskatchewan, Canada.  This is the largest ground footprint in the Athabasca Region held by a UK listed company. 

Power Metal's technical team selected the Athabasca footprint by painstaking review of historical exploration data from work conducted and paid for by others, applying modern geological knowledge and techniques to identify what we believe to be the best available ground.  The ground was available either because other explorers had relinquished their interests during the long-term uranium bear market or because the geological opportunities the Company identified had, at that stage, not been noted by others.

2023 saw the largest Athabasca uranium exploration programme ever undertaken by the Company with significant early findings announced recently.

Our 2023 exploration programme has covered approximately 10 properties and to date we have announced major exploration results from across the portfolio, with further updates expected.

Africa Exploration

Tati Project

The 100% owned Tati Gold Project ("Tati") is centred on a historical gold mine, Cherished Hope, and extensions of high-grade near surface gold mineralisation were confirmed during drilling campaigns carried out by Power Metal in 2021 and 2022.

Next stage exploration focused on geochemical soil sampling at Tati is now complete. A total of 280 individual samples were collected across two grids:

•              One high-resolution in-fill grid is focussed on an area approximately 2km northwest of the historical Cherished Hope Gold Mine and is centred on one point anomaly which historically returned an impressive soil sample of 2.15g/t Au. To date, this anomaly has never been further investigated to determine the provenance of this gold mineralisation; and

•              The second grid covers the immediate southwestern extension of Cherished Hope where individual point anomalies returned a soil sample as high as 0.84g/t Au.

The soil samples have been sent to Intertek Genalysis in Perth, Western Australia for assay and final results are awaited.

Site rehabilitation of the fines dumps covering Tati have been completed in preparation for the next phase of exploration and development. This rehabilitation work included removal of the fines dump and clearing the site of material considered by Power Metal to be suitable for processing at a local facility.

The Company has received inbound interest regarding the potential for small-scale mining at its Cherished Hope Gold Mine area where near-surface drilling results in 2022 returned bonanza gold up to 47.1g/t Au over 1m (from 6m downhole).

Molopo Farms Complex Project

During the year, Power Metal acquired an additional 58.7% interest in Kalahari Key Mineral Exploration Pty Ltd, bringing its total interest to 87.71%.  Kalahari Key Mineral Exploration Pty Ltd is a Botswana-incorporated private company, which holds a 100% interest in the Molopo Farms Complex Project.

Extensive exploration to date has confirmed the feeder zone geological model, together with the presence of nickel sulphides and platinum group elements ("PGEs") through drilling as announced on 27 April 2023 which includes 2.3m @ 0.56g/t Pt+Pd+Au & 0.17% Ni from DDH1-6B, and by aggregating and analysing the extensive database of historical work has now identified the highest profile conductor drill target to date.

Power Metal sees the potential for a district-scale nickel and PGE discovery at Molopo and will undertake the next diamond drill programme with this objective in focus.

North American Exploration

North Wind

The 100% Power Metal owned North Wind Lithium Project ("North Wind") is considered by the Company to be prospective for the discovery of pegmatite hosted lithium mineralisation. Lithium (Li)-caesium (Cs)-tantalum (Ta) bearing pegmatite ("LCT-pegmatite") accounts for approximately a quarter of the world's lithium production.

The exploration work programme first announced on 10 August 2023 is now complete and a total of 389 soil geochemical samples were taken.  Significantly, several pegmatites were identified across North Wind, with five pegmatite samples collected - which was a key ground exploration objective.  The mineralisation present within the identified pegmatites will be determined during the assay testing process and based on interpretation of this data further exploration steps will be determined.

Corporate Activity

Athabasca Uranium Corporate Activity

Power Metal announced the conditional disposal of the Reitenbach and E-12 properties into Teathers Financial Plc (soon to be renamed Uranium Energy Exploration ("UEE")). Plans for an IPO of UEE are advancing.

The Company has also received third party interest across our uranium portfolio and further commercial transactions are anticipated however shareholders should note that there can be no certainty of any such transactions being concluded.

Africa Corporate Activity

Third parties have expressed interest in both Tati and Molopo Farms Complex projects and the Company is engaged in discussions to explore complementary, joint venture and other project level partnerships.

Power Metal continues to liaise with our partner Katoro Gold plc to seek a new pathway for advancement of the Haneti Project in Tanzania where the Company holds a 35% interest.

North America Corporate Activity

Golden Metal Resources PLC ("GMET") successfully listed on the London Stock Exchange in May 2023 with Power Metal holding an interest following their IPO financing of 61.03%, worth c.£7.1 million as at the date of this report. Power Metal also holds 1,749,378 warrants to acquire new GMET ordinary shares at an exercise price of 10.75p per share and with an expiry date of 10 May 2024, and a further 1,749,378 warrants at an exercise price of 17.5p per share and with an expiry date of 10 May 2025.

Power Metal's 100% owned ION Battery Resources Limited ("ION") holds 100% of the North Wind project (transfer completed in May 2023) where lithium focused exploration is currently underway, together with 100% of Doerksen Bay graphite project and a project option to earn-in to the Authier North/Duval East lithium project.

The next corporate steps for ION are to be determined following a review of assay results from the North Wind summer exploration programme.

The Company's 30% interest in the Silver Peak project remains as previously stated and we are working with our partners on the next commercial steps for this important asset.

Australia Corporate Activity

Through its Australian operating subsidiary, Red Rock Australasia Pty Ltd, NBGC has a substantial licence footprint within the Victoria Goldfields, Australia, which is comprised of 17 granted exploration licences covering 1,867km² and 5 licence applications covering 493km². Power Metal is working with its joint venture partner Red Rock Resources plc to expedite the commercial success of this strategic Australian opportunity.

First Development Resources PLC ("FDR") holds strategic exploration projects in Western Australia and the Northern Territory and is prepared for an IPO listing which, subject to a return to normalised market conditions and final regulatory approvals, can be undertaken at short notice.  In Western Australia FDR holds the Wallal Project which includes the Company's primary target - the Eastern Anomaly, a magnetic bullseye target with a geophysical signature similar to Greatland Gold's Havieron discovery in the Paterson Region.

FDR has secured a c.£110k co-funding grant from the Western Australian government as part of the Exploration Incentive Scheme to be set against the costs of Wallal drilling and has received all the necessary local approvals for the drilling to be undertaken.  FDR has also agreed a contract with DDH1 Drilling Ltd to undertake the Phase I diamond drilling drill programme and has prepared the access and the drill pad location in readiness for drilling.  Recognising this progress, the early commencement of drilling is being considered alongside the work being undertaken to progress the IPO.

Finally, Power Metal holds a 20% interest in New Horizon Metals Pty Ltd, which holds projects in Queensland and South Australia, and is working towards a listing in the Australian capital markets.

Financial Review

Total comprehensive loss for the year to 30 September 2023 of £1.3 million (2022: loss of £137k). The increase in loss from September 2022 is in part due to the capital contribution balance recognised during the prior year. The capital contribution balance arose on the completion of the capital reorganisation of the Golden Metal Resources Plc group.

Pre-non-controlling interest total equity of £13.6 million at the year-end (2022: £11.7 million).

Raised £3.6 million (before issue costs) in new equity financing during the financial year, from a combination of new and existing shareholders, including the Directors.

An additional £43.8k of cash received by the Company during the year from exercises of Power Metal share warrants and £Nil cash received by the Company during the year from exercises of Power Metal share options. £1.1 million of shares were issued in relation to acquisitions in various investments and projects.

The Company ended the financial year with a cash balance of £1.10 million (2022: £1.56 million).

Cash balances held at the year-end are supplemented by listed company shares and warrants (cash equivalents), which represent a further pool of accessible cash available on the sale of shares in listed companies.

Corporate Social Responsibility ("CSR")

The Company maintains a focus on CSR through internal policies and our approach to external operational activities.

During the year and after the year end the Company developed its internal environmental, social and governance ("ESG") policies and procedures to codify many of the practices in place at the Company and to introduce a number of new initiatives.

The Company will continue to prudently invest in the regions in which we have business activities, in support of the communities where we operate. As an early-stage company, Power Metal is keen to employ workers from the areas in which we operate, and to operate in a safe, responsible, and reasonable manner.

As certain projects mature, we would expect our community engagement to become more extensive in line with the level of operational activities.

Board Changes

In March 2023, Sean Wade was appointed to the Board as Chief Executive Officer and Executive Director, replacing Paul Johnson.

In May 2023, Bill Brodie Good was appointed to the Board as Non-Executive Director.

In January 2024, Owain Morton resigned from the Board as Non-Executive Director.

Outlook

Power Metal continues to execute on its robust business model of exploration/development project generation and advancement and value crystallisation.

In addition to the multiple potential district scale exploration and development projects currently within the portfolio, the Company continues to seek new opportunities for shareholder value creation.

A number of such opportunities are currently in the pipeline and the Board remains confident that with ongoing operations and also as junior resource and commodity market conditions normalise, the Company is in an excellent position to deliver value to shareholders.

Notice of Annual General Meeting and Distribution of Accounts to Shareholders

The Company's Annual General Meeting ("AGM") will take place at 10.00am on 26 March 2024 at Temple Chambers, 3-7 Temple Avenue, London, EC4Y ODT.  The Company's Annual Report and Accounts for the year ended 30 September 2023 will be posted to shareholders this week. Copies of the Notice of AGM and the Annual Report and Accounts will also be available on the Company's website at www.powermetalresources.com in due course.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

FOR THE YEAR ENDED 30 SEPTEMBER 2023

	Note		2023 £'000		2022 £'000
Revenue			78		37
Gross profit			78		37
Operating expenses	4		(2,777)		(3,127)
Fair value gains through profit or loss			1,604		309
Loss from operating activities			(1,095)		(2,781)
Share of post-tax losses of equity accounted joint ventures			(219)		(167)
Loss before tax			(1,314)		(2,948)
Taxation			-		-
Loss for the year from continuing operations			(1,314)		(2,948)
Other comprehensive (expense)/income
Items that will or may be reclassified to profit or loss:
Exchange translation			6		18
Items that will not be reclassified to profit or loss:
Capital contribution			-		2,793
Total other comprehensive (expense)/income			6		2,811
Total comprehensive loss for the year			(1,308)		(137)
Loss for the period attributable to:
Owners of the parent			(1,096)		(2,256)
Non-controlling interests			(218)		(692)
			(1,314)		(2,948)
Total comprehensive (loss)/income attributable to:
Owners of the parent			(1,083)		82
Non-controlling interests			(225)		(219)
			(1,308)		(137)
Earnings per share from continuing operations attributable to
the ordinary equity holder of the parent:
Basic and diluted loss per share (pence)	8		(0.06)		(0.15)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2023

			2023		2022
	Note		£'000		£'000
Assets
Intangible assets	5		4,947		7,138
Investments in associates and joint ventures			290		402
Financial assets at fair value through profit or loss			1,161		1,620
Property, plant and equipment			8		33
Non-current assets			6,406		9,193
Financial assets at fair value through profit or loss			7,188		2,384
Trade and other receivables	6		481		346
Cash and cash equivalents			1,098		1,560
Assets classified as held for sale			191		1,124
Current assets			8,958		5,414
Total assets			15,364		14,607
Equity
Share capital	7		8,531		8,065
Share premium	7		27,497		23,312
Capital redemption reserve			5		5
Capital contribution reserve			-		2,322
Share based payment reserve			1,712		1,638
Exchange reserve			103		90
Accumulated losses			(24,276)		(23,740)
Total			13,572		11,692
Non-controlling interests			907		2,065
Total equity			14,479		13,757
Liabilities
Trade and other payables	9		885		850
Current liabilities			885		850
Total liabilities			885		850
Total equity and liabilities			15,364		14,607

The financial statements of Power Metal Resources PLC, company number 07800337, were approved by the board of Directors and authorised for issue on 20 February 2023.

CONSOLIDATED STATEMENT OF EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2022

	Share capital		Share premium		Capital Redemption Reserve		Capital contribution reserve		Share based payment Reserve		Exchange reserve		Retained deficit		Total		Non-Controlling Interests		Total Equity
	£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000
Balance at 1 October 2021	7,705		18,437		5		-		1,541		72		(21,486)		6,274		(306)		5,968
Loss for the period	-		-		-		-		-		-		(2,258)		(2,258)		(690)		(2,948)
Other comprehensive income	-		-		-		-		-		18		-		18		-		18
Capital contribution	-		-		-		2,322		-		-		-		2,322		471		2,793
Total comprehensive income / (expense) for the period	-		-		-		2,322		-		18		(2,258)		82		(219)		(137)
Issue of ordinary shares	360		4,999		-		-		-		-		-		5,359		-		5,359
Costs of share issues	-		(124)		-		-		-		-		-		(124)		-		(124)
Share-based payments	-		-		-		-		101		-		-		101		-		101
Warrant exercises	-		-		-		-		(4)		-		4		-		-		-
Non-controlling interest adjustment on step disposal of subsidiaries	-		-		-		-		-		-		-		-		2,590		2,590

Total transactions with owners	360		4,875		-		-		97		-		4		5,336		2,590		7,926
Balance at 30 September 2022	8,065		23,312		5		2,322		1,638		90		(23,740)		11,692		2,065		13,757

CONSOLIDATED STATEMENT OF EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2023

	Share capital		Share premium		Capital Redemption Reserve		Capital contribution reserve		Share based payment Reserve		Exchange reserve		Retained deficit		Total		Non-Controlling Interests		Total Equity
	£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000		£'000
Balance at 1 October 2022	8,065		23,312		5		2,322		1,638		90		(23,740)		11,692		2,065		13,757
Loss for the period	-		-		-		-		-		-		(1,096)		(1,096)		(218)		(1,314)
Other comprehensive income	-		-		-		-		-		13		-		13		(7)		6
Total comprehensive income / (expense) for the period	-		-		-		-		-		13		(1,096)		(1,083)		(225)		(1,308)
Issue of ordinary shares	466		4,405		-		-		-		-		-		4,871		-		4,871
Costs of share issues	-		(220)		-		-		-		-		-		(220)		-		(220)

Share-based payments		-			-			-			-			74			-			-			74			-		74
Non-controlling interest adjustment on step acquisition of subsidiaries		-			-			-			-			-			-			-			-			99		99
Non-controlling interest adjustment on step disposal of subsidiaries	-			-			-			-			-				-			22			22			(22)		-
Non-controlling interest adjustment on disposal of subsidiaries	-			-			-			(2,322)			-				-			538			(1,784)			(1,010)		(2,794)
Total transactions with owners	466			4,185			-			(2,322)			74				-			560			2,963			(933)		2,030
Balance at 30 September 2023	8,531			27,497			5			-			1,712				103			(24,276)			13,572			907		14,479

CONSOLIDATED STATEMENT OF CASHFLOWS

AS AT 30 SEPTEMBER 2023

		2023 £'000		2022 £'000
Cash flows used in operating activities
Loss for the year from continuing activities		(1,314)		(2,948)
Adjustments for:
Fair value adjustments		(1,604)		(309)
Share of post-tax losses of equity accounted joint ventures		219		167
Expenses settled in shares		129		-
Disposals of financial assets		(175)		245
Depreciation		5		-
Foreign exchange differences		(33)		101
Share-based payment expense		30		11
		(2,743)		(2,733)
Changes in working capital:
Increase in trade and other receivables		(169)		(250)
Increase in trade and other payables		797		477
Net cash used in operating activities		(2,115)		(2,506)
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss		-		(426)
Investments in financial assets through P&L		(291)		-
Investment in joint ventures		-		(188)
Investments in associates		(316)		-
Investments in intangibles		(797)		(1,530)
Cash relating to deconsolidated subsidiary		(410)		-
Purchase of property, plant, and equipment		(8)		(32)
Net cash outflows from investing activities		(1,822)		(2,176)
Cash flows from financing activities
Proceeds from issue of share capital		3,616		3,211
Shares issued to non-controlling interests by subsidiaries		79		1,875
Issue costs		(220)		(125)
Net cash inflows from financing activities		3,475		4,961
(Decrease)/increase in cash and cash equivalents		(462) )		279
Cash and cash equivalents at beginning of year		1,560		1,281
Cash and cash equivalents at 30 September		1,098		1,560

Significant non-cash transactions during the year

During the year, the Group acquired intangible assets, either directly or indirectly via subsidiary undertakings and investments in subsidiaries, totalling £1,146k via the issue of ordinary shares.

Power Metal disposed of its investment in Kanye Resources Pty Ltd during the year, which was previously held for sale. In consideration, the Company received shares and warrants in Kavango Resources PLC to the value of £1,114k.

On 10 May 2023, Golden Metal Resources PLC ("GMET") listed on the AIM market of the London Stock Exchange, resulting in a dilution of POW's shareholding leading to a disposal of the subsidiary investment during the year. On the IPO date, Power Metal disposed of the subsidiary investment and recognised a financial asset, including an uplift in fair value.

NOTES TO THE CONSOLODATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 SEPTEMBER 2023

1.            Reporting entity

Power Metal Resources PLC is a public company limited by shares which is incorporated and domiciled in England and Wales. The address of the Company's registered office is 201 Temple Chambers, 3-7 Temple Avenue, London, EC4Y 0DT. The consolidated financial statements of the Group as at and for the year ended 30 September 2023 include the Company and its subsidiaries. The Group is primarily involved in the exploration and exploitation of mineral resources in Africa, Australia, Canada and the US.

2.            Going concern

The financial statements are prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have considered all relevant available information about the current and future position of the Group, including current level of resources, additional funding raised during the year and post-year-end, and the required level of spending on exploration and drilling activities. As part of their assessment, the Directors have also taken into account the ability to raise new funding whilst maintaining an acceptable level of cash flows for the Group to meet all commitments.

The Directors have stress tested the Group's cash projections, which involves preserving cash flows and adopting a policy of minimal cash spending for a period of at least 12 months from the date of approval of these financial statements. The Directors believe the measures they have put in place will result in sufficient working capital and cash flows to continue in operational existence, assuming that all exploration and drilling activities are managed carefully and curtailed if necessary. For the Group to carry out the desired levels of exploration and drilling activities, the Directors believe that it needs to secure further funding either from a strategic partner or subsequent equity raisings in the next financial year, which the Group has succeeded in completing over recent years. The Group also has the ability to partially dispose of equity investments if required. Taking these matters in consideration, the Directors continue to adopt the going concern basis of accounting in the preparation of the financial statements.

The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate.

3.             Intangible assets - Prospecting and exploration rights

Rights acquired with subsidiaries are recognised at fair value at the date of acquisition. Other rights acquired and development expenditure are recognised at cost. 

Exploration and evaluation costs arising following the application for the legal right, are capitalised on a project-by-project basis, pending determination of the technical feasibility and commercial viability of the project. When a project is deemed not feasible, related costs are expensed as incurred. Costs incurred include any costs pertaining to technical and administrative overheads. Administration costs that are not directly attributable to a specific exploration area are expensed as incurred, and subsequently capitalised if it is reasonably certain that a resource will be defined. Capitalised development expenditure will be measured at cost less accumulated amortisation and impairment losses.

4.            Operating expenses

Operating expenses include:	2023		2022
	£'000		£'000
Staff costs	957		960
Foreign exchange loss	62		11
Share based payment expense	31		70
(Gain)/Loss on disposal	(175)		180
Auditor's remuneration for audit of the Group and Company financial statements	36		29

5.            Intangible assets 

Group	Prospecting and exploration rights £'000
Cost
As at 30 September 2021	1,926
Reclassification from financial assets	136
Reclassification to assets held for sale	(993)
Additions	7,186
Effect of foreign exchange	9
Balance at 30 September 2022	8,264
As at 30 September 2022	8,264
Reclassification from financial assets	878
Reclassification to assets held for sale	(60)
Reclassification from associate	209
Additions	2,067
Disposal	(5,035)
Subsidiary sale of shares	(79)
Effect of foreign exchange	(171)
Balance at 30 September 2023	6,073
Impairment
As at 30 September 2021	1,126
Balance at 30 September 2022	1,126
As at 30 September 2022	1,126
Charge	-
Balance at 30 September 2023	1,126
Net book value
At 30 September 2022	7,138
At 30 September 2023	4,947

During the year, the Group's direct interest in the Garfield, Stonewall, Golconda Summit & Pilot Mountain Projects was disposed of. The Group acquired additional intangible assets in Molopo Farm and North Wind, see below:

	2023 £'000		2022 £'000
Intangible assets
Athabasca Uranium Project	349		175
Authier North Project	74		16
Canadian Graphite Project	137		99
Tati Gold-Nickel Project	384		359
Garfield, Stonewall, Golconda Summit & Pilot Mountain Projects	-		4,865
Wallal, Braeside West, Selta & Ripon Hill Projects	1,692		1,624
Molopo Farm Project	2,276		-
North Wind Project	35		-
Total	4,947		7,138

The Directors regularly assess the carrying value of the Group's assets, including its prospecting and exploitation rights, and write off any exploration expenditure that they believe to be irrecoverable.

Athabasca Uranium Project

As at 30 September 2023, the Group held 17 properties covering 1000km² in the Athabasca Region of Saskatchewan, Canada. This is the largest ground footprint in the Athabasca Region held by a UK listed company.

The conditional disposal of two properties held at the Athabasca project were announced previously; Reitenbach, in August 2022 and E-12 in November 2022. Work is still in process to complete the transaction through a listing on the London capital markets for the proposed holding vehicle, Teathers Financial PLC, to be renamed Uranium Energy Exploration PLC ("UEE"). The two properties were moved to assets held for sale in the statement of financial position as at 30 September 2022. Since then, considerable progress has been made on the structure of the transaction and the advancement of the assets, a key component of which has been the successful completion of a pre-IPO financing which was announced on 13 December 2023.

Authier North Project

In July 2023, Power Metal announced the early completion of its earn-in to a 100% interest in Authier North. The Authier North Property consists of 15 mineral claims covering an area of approximately 560 hectares and is prospective for lithium pegmatites and base metal mineralisation.

Canadian Graphite Project

In January 2023, Power Metal announced the acquisition of the 4,222-hectare Doerksen Bay Graphite Project located in Saskatchewan, Canada. Power Metal transferred its interest into newly formed 100% subsidiary ION Battery Resources Limited ("ION"). The project gives exposure to the exciting graphite space, a key component in new age battery technology.  The Project is centred around five Saskatchewan Mineral Deposit Index graphite occurrences including the Ben, Ben North, Bear Bones, Brabant Lake and Doerksen Bay showings.

Tati Gold-Nickel Project

In September 2022, the Company announced the completion of 490m of RC drilling over 9 holes and the successful intersection of quartz reef in all holes drilled, with multiple holes intersecting multiple sub-parallel quartz reef structures. Further 2023 geochemical soil sampling assay results confirmed two significant gold-in-soil geochemical anomalies and continuity within the 8km gold trend at Tati. Six unique additional target areas have been identified for detailed soil sampling which is expected to include a total of c. 450 individual soil samples for follow on accredited laboratory gold assay testing. Further sampling at this target area will be focussed on in-fill as well as step-out sampling to better understand the size and orientation of this priority zone.

Garfield, Stonewall, Golconda Summit and Pilot Mountain Projects

On 10 May 2023, Golden Metal Resources PLC ("GMET") listed on the AIM market of the London Stock Exchange, relating in a dilution of POW's shareholding leading to a disposal of the subsidiary investment during the year. POW's interests in the projects were therefore disposed of, and the investment in GMET was subsequently recognised as a financial asset.

Wallal Project, Ripon Hills, Braeside Project and Selta Project

First Development Resources Pty Ltd ("FDR Pty"), a 100% subsidiary of First Development Resources PLC ("FDR"), holding the Wallal licences, located in the Paterson Province of Western Australia. The Wallal project covers an area of 572km² and is the Group's primary focus in the region. It is of particular interest due to a number of geophysical anomalies which have been identified following the completion of an in-depth study which included the reprocessing of historic seismic data along with the analysis of historic magnetic and gravity geophysical surveys.

Pardoo Resources Pty Ltd ("Pardoo") and RH Resources Pty Ltd ("RH Pty"), both 100% subsidiaries of FDR, hold the fully licenced Ripon Hills and Braeside West Projects which cover a combined area of approximately 300km². The tenements are located approximately 250 km southeast of Port Hedland on the western edge of the Paterson Province in Western Australia. The projects are located on the western and eastern limbs of the Oakover Syncline. The area is primarily prospective for manganese, similar to the nearby Woodie Woodie manganese mine, as well as base-metal and gold mineralisation associated with deep seated north to north-westerly trending fault structures. These fault structures have the potential to be conduits for various styles of hydrothermal mineralisation as evidenced by recent exploration conducted by ASX listed Rumble Resources Limited on land adjacent to the Braeside West tenement.

URE Metals Pty Ltd ("URE") a 100% subsidiary of FDR PLC, holds the Selta Project. The Selta Project in the Northern Territory is located in an area considered highly prospective for uranium and Rare Earth Element mineralisation along with base and precious metal mineralisation. Numerous companies are actively exploring within the region. The Selta project is comprised of three granted exploration licences and covers a total land area of almost 1,600km². The project borders ASX listed Prodigy Gold and Canadian listed Megawatt Lithium and Battery Metals Corporation; and is less than 70km northwest of Arafura's Resources high-grade, world-class Nolans Bore REE deposits

Molopo Farms Complex Project

In November 2022, Power Metal acquired an additional 58.7% equity stake in private company Kalahari Key Mineral Exploration Pty Limited ("KKME"), taking the Company's holding to 87.71%. KKME is a Botswana registered exploration company with a 100% interest in the 1,723km² Molopo Farms Complex Project ("MFC"). 

At the MFC, Power Metal is targeting a district-scale nickel and platinum group element discovery. On 6 October 2023 the Company announced that its recently completed geophysical inversions led to the identification of the highest priority conductor to date at the Project within target area T1-14. The Company has further advanced plans to drill test the target at T1-14 with follow up analysis determining up to two areas to optimally test this conductor.

North Wind Project

The North Wind Lithium project was originally staked by Power Canada Inc. in November 2022, the project transferred to ION, both companies are 100% subsidiaries of Power Metal. The project is targeting a significant lithium discovery; the Group is currently awaiting assay results from 2023 field exploration.

6.                            Trade and other receivables

Group	2023 £'000		2022 £'000
Accounts receivable	31		123
Other receivables	366		149
Prepayments	84		74
Trade and other receivables	481		346

7.                            Share capital

	Number of ordinary shares
	2023					2022
Ordinary shares in issue at 1 October	1,614,654,921					1,254,808,787
Issued for cash	383,673,949					137,142,857
Issued in settlement for acquisitions	60,093,043					222,703,277
Issued in lieu of expenses	21,684,343					-
In issue at 30 September - fully paid (par value 0.1p)	2,080,106,256					1,614,654,921
		Number of deferred shares
		2023			2022
Deferred shares in issue at 1 October		3,628,594,957			3,628,594,957
In issue at 30 September		3,628,594,957			3,628,594,957

	Ordinary share capital
	2023 £'000		2022 £'000
Balance at beginning of year	8,065		7,705
Share issues	466		360
Balance at 30 September	8,531		8,065

	Share Premium
	2023 £'000		2022 £'000
Balance at beginning of year	23,312		18,437
Share issues	4,405		4,999
Expenses relating to share issues	(220)		(124)
Balance at 30 September	27,497		23,312

All ordinary shares rank equally with regard to the Company's residual assets.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Both classes of deferred shares (Deferred and Deferred A), do not entitle the holders thereof to receive notice of or attend and vote at any general meeting of the Company or to receive dividends or other distributions or to participate in any return on capital on a winding up unless the assets of the Company are in excess of £1,000,000,000,000. The Company retains the right to purchase the deferred shares from any shareholder for a consideration of one penny in aggregate for all that shareholder's deferred shares. As such, the deferred shares effectively have no value.  Share certificates will not be issued in respect of the deferred shares.

Issue of ordinary shares

In November 2022, the Company acquired an additional 58.7% interest in Kalahari Key Mineral Exploration Pty Limited. The consideration of £807,348 was payable through the issue of 46,134,171 new ordinary shares of 0.1p each in the Company at a price of 1.75p per new ordinary share and warrants over 46,134,171 new Ordinary Shares at a 3.5p exercise price.

In January 2023, the Company acquired 100% of the Canadian Graphite Project for £37,500. Consideration was payable through the issue of 2,500,000 Power Metal new ordinary shares of 0.1p each at an issue price of 1.5p per share.

In January 2023, the Company raised £900,000 before expenses through the issue of 64,285,714 new ordinary shares of 0.1p each ("Financing Shares") at an issue price of 1.4p per share. Each Financing Share has an attaching warrant to subscribe for one new ordinary share of 0.1p each in the Company at an exercise price of 2.0p per share with a 24-month term from 30 January 2023 creating 64,285,714 financing warrants.

In March 2023, the Company issued 11,458,872 ordinary shares at an issue price of 2.25p for settlement of the drill contract with Mindea Exploration & Drilling Services (Pty) at the Molopo Farms Complex Project.

In May 2023, the Company raised £2.175m before expenses through the issue of 319,388,235 new ordinary shares of 0.1p each ("Placing Shares") at an issue price of 0.85p per share. Each Placing Share has an attaching warrant to subscribe for one new ordinary share of 0.1p each in the Company at an exercise price of 2.0p per share with a 5-year term expiring 9 May 2028.

In May 2023, the Company received notice to exercise warrants over 6,250,000 new ordinary shares of 0.1p each at an exercise price of 0.7p per warrant share, raising an additional £43,750 for the Company. 

In July 2023, the Company issued 9,208,951 ordinary shares at an issue price of 0.71p per share in lieu of fees incurred with advisors. 3,541,904 shares were issued to SP Angel Corporate Finance LLP, the Company's nominated adviser and joint broker, in lieu of fees to the value of £25,000. The remaining 5,667,047 shares were issued to another corporate adviser in lieu of fees for a total value of £40,000.

In July 2023, the Company negotiated early completion of its Authier North Lithium Project Earn-In, acquiring 100% interest in the Project. Consideration of CAD$75,000 (£43,941) was settled through the issue of 6,225,392 new ordinary shares of 0.1p at an issue price of 0.71p.

8.            Earnings per share

Basic and diluted loss per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

Group	2023		2022
Loss attributable to equity holders of the parent	(1,096,881)		(2,257,872)
Weighted average number of ordinary shares in issue	1,842,111,876		1,457,507,624
Basic and diluted loss per ordinary share (pence)	(0.06)		(0.15)

The basic and diluted earnings per share are the same given the loss for the year, making the outstanding share options and warrants anti-dilutive.

9.                            Trade and other payables

Group		2023 £'000			2022 £'000
Trade payables		343			686
Other Payables		35			-
Other taxation and social security		54			-
Accrued expenses		453			164
Trade and other payables		885			850
Company	2023 £'000					2022 £'000
Trade payables	236					329
Other Payables	35					-
Other taxation and social security	56					-
Accrued expenses	360					164
Payable to group undertakings	-					24
Trade and other payables	687					517

10.          Subsequent events

On 3 October 2023, the Company issued 1,293,103 new ordinary shares of 0.1 pence, at a price of 0.725 pence per share ("Fee Shares") to SP Angel Corporate Finance LLP, the Company's nominated adviser and joint broker, in lieu of fees incurred to the value of £9,375. A further 2,068,965 Fee Shares were issued to a professional services provider in lieu of fees incurred to the value of £15,000.

On 6 November 2023, Power Metal announced the disposal of its entire holding of 69,500,000 shares of Kavango Resources Plc ("Kavango"), at a price of 0.8p per share, raising cash of £556,000 for the Company. Power Metal retained its 60,000,000 warrants to subscribe for new Kavango shares with 30,000,000 warrants at an exercise price of 4.25p and 30,000,000 warrants at an exercise price of 5.5p, both with an expiry date of 8 January 2025. In addition, Power Metal holds a 1% net smelter return royalty ("NSR") in respect of the project licence footprint in the Kalahari Copper Belt and Ditau Camp projects previously held in joint venture with Kavango.

On 16 January 2024, Owain Morton, Non-Executive Director, stepped down from the board with immediate effect.

On 31 January 2024, Power Metal announced the issuance of 130,000,000 new ordinary shares of 0.1 pence each at an issue price of 1.0 pence per ordinary share, representing a premium of approximately 3.09 per cent. The share issue resulted in a total raise of £1.3 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:

Power Metal Resources plc
Sean Wade (Chief Executive Officer)	[phone]
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Caroline Rowe/Harry Davies-Ball	[phone]
SI Capital Limited (Joint Broker)
Nick Emerson	[phone]
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson	[phone]

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.

 

END