Interim Results

Power Metal Resources PLC

30 June 2023

 

30 June 2023

Power Metal Resources plc / EPIC: POW / Market: AIM

Power Metal Resources plc ("POW", "Power Metal" or the "Company")

Interim Results

Power Metal Resources plc, the AIM listed metals exploration and development company, announces its unaudited interim results for the six month period ended 31 March 2023 (the "period").

Sean Wade, Chief Executive Officer of Power Metal commented: "The key to unlocking value is to complete planned portfolio disposals, secure operational partnerships over certain exploration interests, drive our uranium interests forward, and ensure the Company has access to quality sources of finance in sufficient quantity to enable it to boldly pursue its ambitions.

"We are making progress across all these areas and whilst the completion of the Golden Metal Resources IPO and £2.7m financing, both in May 2023, are perhaps the notable events for investors recently, we hope to announce many more corporate and exploration events in the coming weeks and months.

"I would like to thank shareholders for their continued support as we progress through what we believe will be a vibrant and exciting period in the Company's history."

KEY DEVELOPMENTS IN THE HALF YEAR TO 31 MARCH 2023

-      Completion of exploration programmes across three projects, including drilling at Molopo Farms in Botswana and the Victoria Goldfields in Australia, as well as geophysics and trenching at the Tati project in Botswana.  All three have delivered positive exploration results, justifying a decision to proceed to next stage exploration with potential partners showing interest in all three projects.

-      Material progress achieved in corporate activities, including pre-IPO preparations for Golden Metal Resources PLC, First Development Resources PLC and Uranium Energy Exploration Ltd.

-      Broad spectrum advancement of the Company's Athabasca Basin uranium portfolio, including additional ground acquisitions through staking, and the management of third-party interest in the uranium portfolio.

-      Completion of the conditional acquisition of a larger stake in the Molopo Farms Complex project; the conditional disposal of the Company's interests in the E-12 property in the Athabasca Basin to Uranium Energy Exploration, and the completion of the disposal of the Company's interest in the Kanye Resources joint venture ("JV"), to partner Kavango Resources PLC (LON:KAV) for shares, warrants, royalty and long term compensation potential.

-      Management changes including the appointment of Owain Morton as Non-Executive Director and Sean Wade as Chief Executive Officer. Together the appointments bring detailed geological,  mine engineering and corporate finance skills to the Board and provide Power Metal with an extensive financing network for the Company and its planned spin-out IPO activity.

KEY DEVELOPMENTS SINCE 31 MARCH 2023

-      Listing of Golden Metal Resources PLC on the London Stock Exchange in May 2023, with a value of Power Metal's holding on listing of c £4.4m;

-      Appointment of Bill Brodie Good as a Non-Executive Director in May 2023; and

-      Financing which has raised £2.7m for the Company to support an acceleration of value generative exploration and corporate activity.

POWER METAL INTERESTS AT TODAY'S DATE

The latest updated review of Power Metal's business interests is provided in the Company's investor presentation which may be accessed here:

https://www.powermetalresources.com/investors/presentation/

In addition, a single page Business Overview is provided for investors through the following link:

https://www.powermetalresources.com/company/

LATEST POSITION OF POWER METAL INTERESTS AND TARGETED OBJECTIVES FOR 2023

Priority Exploration and Potential Exploration Project Joint Ventures

Exploration Interest	Latest Position & Forward Plans
Athabasca Uranium Saskatchewan, Canada (Uranium) POW 100%	Power Metal currently holds 17 properties covering 1005.14km2 within and surrounding the prolific Athabasca Basin. The conditional disposal of two of the properties, Reitenbach and E-12, has been announced and work is underway to complete that transaction through a listing in the London capital markets for the proposed holding vehicle, Teathers Financial PLC, to be renamed Uranium Energy Exploration PLC. Preparation of listing documentation is complete and the IPO financing is expected to commence shortly with completion of the transaction in 2023. Across the Company's wider Athabasca exploration interests there has been considerable third-party interest in working with Power Metal to finance uranium specific operations. The Company continues to engage with parties and anticipates significant progress to occur in 2023. In addition, the Company's recent £2.7m financing has provided the funds for a considerable uranium exploration programme in the Athabasca during the 2023 season, details of which can be found in the Company's announcement dated 21 June 2023.
Molopo Farms Complex Project Botswana (Nickel - Copper - Platinum Group Element) POW: 87.71%	The cumulative exploration programmes undertaken at Molopo Farms have demonstrated significant potential for a major nickel - platinum group element discovery or discoveries. There has been considerable interest from third parties to work with and potentially finance Molopo Farms at project level and Power Metal is working with interested parties at present. The Company is looking to move Molopo Farms forward considerably, targeting a working partnership in place and operational in 2023.
Tati Project Botswana (Gold - Nickel) POW: 100%	Recently completed geophysics and trenching have provided valuable data, adding to that previously collected. This enables the Company to move forward with next stage soil sampling prior to final planning and implementation of planned next stage reverse circulation and diamond drilling targeting a significant gold discovery. Soil sampling is underway currently alongside continuing work to process fines dumps of previously processed ore from the Cherished Hope gold mine location within the Tati licence footprint with local processing partners.

Investment Holdings and Disposals Planned/Underway

Note: other project packages within the Power Metal portfolio are also in earlier stages of disposal and/or spin-out preparations in addition to those listed below.

Business Interest	Latest Position
Kavango Resources PLC (LON:KAV) Botswana & Zimbabwe Exploration (Gold - Base Metals) POW c.10%	In Q4 2022 Power Metal announced the conditional disposal of its Kanye Resources interest to its joint-venture partner KAV. Following this disposal, Power Metal holds c.10% of KAV worth c.£0.8m as at 31 March 2023. Power Metal also holds 30m warrants to acquire new KAV shares at 4.25p and 30m warrants to acquire new KAV ordinary shares at 5.5p per share, both with a life to expiry ending 8 January 2025. In addition, Power Metal holds a 1% net smelter return royalty over the former JV land footprint.
First Class Metals PLC (LON:FCM) Schreiber-Hemlo, Ontario, Canada (Gold - Base Metals) POW c.26%	FCM secured a listing on the London Stock Exchange in late July 2022 with Power Metal holding an interest following its IPO financing of 28.19% on listing (now c.26% after dilution since listing), worth c.£2.05m as of 31 March 2023. Power Metal also holds 517,705 warrants to acquire new FCM ordinary shares at 10p per share with an expiry date of 29 July 2023.
Golden Metal Resources PLC (LON:GMET) Nevada, USA Gold - Base Metals POW c.62%	GMET secured a listing on the London Stock Exchange in late May 2023 with Power Metal holding an interest following their IPO financing of 62.06%, worth c.£2.05m as at the date of this report. Power Metal also holds 1,749,378 warrants to acquire new GMET ordinary shares at 10.75p with an expiry date of 10 May 2024 and 1,749,378 warrants at 17.5p with an expiry date of 10 May 2025.
First Development Resources PLC (FDR) Western Australia /Northern Territory (Gold - Copper - Rare Earth Elements - Uranium - Lithium) POW: c.59%	FDR is currently in the IPO Financing stage of it listing plans with IPO documentation prepared and ready for listing. The listing of FDR is expected to occur in the near term.
New Ballarat Gold Corporation PLC (NBGC) Victoria, Australia (Gold) POW: 49.9% JV Partner Red Rock Resources PLC (LON:RRR): 50.1%	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. The intention of the JV parties is to undertake a listing of NBGC on the UK capital markets. Power Metal is targeting a listing during 2023.
ION Battery Resources Ltd (ION) Canada (Lithium & Graphite) POW 100%	ION comprises two lithium focused projects in Ontario and Quebec and a graphite project in Saskatchewan. Next exploration and corporate steps are under consideration for ION and a further announcement will come in due course. The commercial pathway for ION is expected to be announced, with material progress in the business expected during 2023.
New Horizon Metals Pty Ltd (NHM) Queensland and South Australia (Copper - Uranium - Gold) POW 20%	The JV partners behind NHM are currently considering a number of proposals to secure a listing of NHM on the London or Australian capital markets. Completion of a listing is targeted in 2023.

PROJECTS WITH NEXT STEPS UNDER CONSIDERATION

Project	Latest Position & Key Forward Events
Haneti Project Tanzania (Polymetallic) POW: 35% (65% JV Partner Katoro Gold plc (LON:KAT))	Power Metal is currently in discussions with a JV partner Katoro Gold (LON:KAT), to determine the future of the Haneti Project. Further information will be provided when material developments occur.
Silver Peak Project British Columbia, Canada (Silver) POW: 30%	Power Metal is currently in discussions with its JV partner to determine next corporate and exploration steps for Silver Peak.  An outcome to these discussions is expected in the near term with advancement of the project from an exploration and/or commercial perspective anticipated during the remainder of 2023.

FINANCIAL HIGHLIGHTS FOR THE HALF YEAR ENDED 31 MARCH 2023

·    Loss for the period, attributable to owners of the parent of £1.50 million (2022: £1.69 million), resulting in loss per share of 0.09 pence (2022: 0.12 pence);

·    Financing undertaken in January 2023 raising £0.9 million and acquisitions during the period raised £1.1 million for the Company;

·    Total assets of £14.62 million at the period end (30 September 2022: £14.61 million); and

·    Net assets of £13.99 million at the period end (30 September 2022: £13.76 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 POW https://www.powermetalresources.com/ or contact:

Power Metal Resources plc
Sean Wade (Chief Executive Officer)		+ 44 (0) 20 3778 1396
SP Angel Corporate Finance (Nomad and Joint Broker)
Ewan Leggat/Charlie Bouverat		[phone]
SI Capital Limited (Joint Broker)
Nick Emerson		[phone]
First Equity Limited (Joint Broker)
David Cockbill/Jason Robertson		[phone]

Blythe Ray (Financial PR)

Tim Blythe/Megan Ray                                                                                                  [phone]

Notes to Editors:

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 RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 MARCH 2023

	Note		6 months ended 31-Mar-23 (unaudited) £'000		6 months ended 31-Mar-22 (unaudited) £'000		Year ended 30-Sep-22 (audited) £'000
Revenue			1		198		37
Gross profit			1		198		37
Operating expenses			(1,016)		(1,330)		(3,127)
Fair value gains through profit or loss			(537)		(405)		309
Gain on disposal of joint venture			48		-		-
Loss from operating activities			(1,504)		(1,537)		(2,781)
Share of post-tax losses of equity accounted joint ventures			(108)		(175)		(167)
Loss before taxation			(1,612)		(1,712)		(2,948)
Taxation			-		-		-
Loss for the period from continuing operations			(1,612)		(1,712)		(2,948)
Items that will or may not be reclassified to profit or loss
Capital contribution			-		-		2,794
Items that will or may be reclassified to profit or loss
Exchange translation			(171)		78		18
Total other comprehensive income			(171)		78		2,812
Total comprehensive expense for the period			(1,783)		(1,634)		(136)
Loss for the period attributable to:
Owners of the parent			(1,495)		(1,691)		(2,256)
Non-controlling interests			(117)		(21)		(692)
			(1,612)		(1,712)		(2,948)
Total comprehensive expense attributable to:
Owners of the parent			(1,629)		(1,613)		82
Non-controlling interests			(154)		(21)		(218)
			(1,783)		(1,634)		(136)
Earnings per share from continuing operations attributable to the ordinary equity holder of the parent:
Basic and diluted loss per share (pence)	4	(0.09)			(0.12)		(0.15)

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 MARCH 2023

	Note	31-Mar-23 (unaudited) £'000		31-Mar-22 (unaudited) £'000		30-Sep-22 (audited) £'000
Assets
Intangible assets		9,438		2,782		7,138
Investments in associates and joint ventures		278		156		402
Financial assets at fair value through profit or loss		469		3,539		1,620
Property, plant & equipment		40		22		33
Non-current assets		10,225		6,499		9,193
Financial assets at fair value through profit or loss		3,603		66		2,384
Assets classified as held for sale		78		-		1,124
Trade and other receivables		287		1,240		346
Cash and cash equivalents		427		1,435		1,560
Current assets		4,395		2,741		5,414
Total assets		14,620		9,240		14,607
Equity
Share capital	5	8,190		7,918		8,065
Share premium		25,144		21,871		23,312
Capital redemption reserve		5		5		5
Capital contribution reserve		2,322		-		2,322
Share based payments reserve		1,699		1,576		1,638
Foreign exchange reserve		(44)		150		90
Accumulated losses		(25,215)		(23,179)		(23,742)
Total		12,101		8,341		11,690
Non-controlling interests		1,890		(327)		2,066
Total equity		13,991		8,014		13,756
Liabilities
Trade and other payables		629		1,226		851
Current liabilities		629		1,226		851
Total liabilities		629		1,226		851
Total equity and liabilities		14,620		9,240		14,607

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2023

	Share capital £'000		Share premium £'000		Capital redemption reserve £'000		Capital Contribution £'000		Share based payment reserve £'000		Exchange reserve £'000		Retained deficit £'000		Total £'000		Non-Controlling Interests £'000		Total Equity £'000
Balance at 1 October 2022 (audited)	8,065		23,312		5		2,322		1,638		90		(23,742)		11,690		2,066		13,756
Loss for the period	-		-		-		-		-		-		(1,495)		(1,495)		(117)		(1,612)
Total other comprehensive expense	-		-		-		-		-		(134)		-		(134)		(37)		(171)
Total comprehensive expense for the period	-		-		-		-		-		(134)		(1,495)		(1,629)		(154)		(1,783)
Issue of ordinary shares	125		1,878		-		-		-		-		-		2,003		-		2,003
Cost of share issues	-		(46)		-		-		-		-		-		(46)		-		(46)
Share-based payments	-		-		-		-		61		-		-		61		-		61
Non-controlling interest adjustment	-		-		-		-		-		-		22		22		(22)		-
	125		1,832		-		-		61		-		22		2,040		(22)		2,018
Balance at 31 March 2023 (unaudited)	8,190		25,144		5		2,322		1,699		(44)		(25,215)		12,101		1,890		13,991

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2022

	Share capital £'000		Share premium £'000		Capital redemption reserve £'000		Share based payment reserve £'000		Exchange reserve £'000		Accumulated losses £'000		Total £'000		Non-controlling interests £'000		Total Equity £'000
Balance at 1 October 2021 (audited)	7,705		18,437		5		1,541		72		(21,488)		6,272		(306)		5,966
Loss for the period	-		-		-		-		-		(1,691)		(1,691)		(21)		(1,712)
Total other comprehensive expense	-		-		-		-		78		-		78		-		78
Total comprehensive expense for the period	-		-		-		-		78		(1,691)		(1,613)		(21)		(1,634)
Issue of ordinary shares	213		3,496		-		-		-		-		3,709		-		3,709
Cost of share issues	-		(62)		-		-		-		-		(62)		-		(62)
Share-based payments	-		-		-		35		-		-		35		-		35
	213		3,434		-		35		-		-		3,682		-		3,682
Balance at 31 March 2022 (unaudited)	7,918		21,871		5		1,576		150		(23,179)		8,341		(327)		8,014

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 SEPTEMBER 2022

	Share capital £'000		Share premium £'000		Capital redemption reserve £'000		Capital Contribution £'000		Share based payment reserve £'000		Exchange reserve £'000				Retained Deficit £'000				Total £'000				Non-controlling interests £'000				Total Equity £'000
Balance at 1 October 2021 (audited)	7,705		18,437		5		-		1,541		72				(21,488)				6,272				(306)				5,966
Loss for the year	-		-		-		-		-		-				(2,258)				(2,258)				(690)				(2,948)
Total other comprehensive expense	-		-		-		-		-		18				-				18				-				18
Capital Contribution	-		-		-		2,322		-		-			-				2,322				472				2,794
Total comprehensive expense for the period	-		-		-		2,322		-		18				(2,258)				82				(218)				(136)
Issue of ordinary shares	360		4,999		-		-		-		-				-				5,359				-				5,359
Cost 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
	360		4,875		-		-		97		-				4				5,336				2,590				7,926
Balance at 30 September 2022 (audited)	8,065		23,312		5		2,322		1,638		90				(23,742)				11,690				2,066				13,756

POWER METAL RESOURCES PLC

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 MARCH 2023

	6 months ended 31-Mar-23 (unaudited) £'000		6 months ended 31-Mar-22 (unaudited) £'000		Year ended 30-Sep-22 (audited) £'000
Cash flows from operating activities
Loss for the period	(1,612)		(1,712)		(2,948)
Adjustments for:
- Fair value adjustment	537		405		(309)
- Share of post-tax losses of equity accounted   joint ventures	108		175		167
- Disposals	(47)		378		245
- Equity settled share-based payments	17		35		101
- Depreciation	2		-		-
- Foreign exchange differences	(150)		78		11
	(1,145)		(641)		(2,733)
Changes in working capital:
- Trade and other receivables	(9)		(1,063)		(250)
- Trade and other payables	(222)		908		477
Net cash used in operating activities	(1,376)		(796)		(2,506)
Cash flows from investing activities
Purchase of intangibles	(408)		(295)		(1,530)
Investment in financial assets at fair value through profit or loss	-		(321)		(426)
Investment in Joint Ventures	(194)		(165)		(188)
Proceeds from investment disposals	-		171		-
Purchase of property, plant and equipment	(9)		(20)		(32)
Net cash used in investing activities	(611)		(630)		(2,176)
Cash flows from financing activities
Proceeds from issue of share capital	900		1,643		3,211
Shares issued to non-controlling interests by subsidiary	-		-		1,875
Issue costs	(46)		(63)		(125)
Net cash flows from financing activities	854		1,580		4,961
Net increase/(decrease) in cash and cash equivalents	(1,133)		154		279
Cash and cash equivalents at beginning of period	1,560		1,281		1,281
Cash and cash equivalents at end of period	427		1,435		1,560

Details of significant non-cash transactions are disclosed in note 5.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT

1. Reporting entity

Power Metal Resources plc is a company domiciled in the United Kingdom. The unaudited consolidated interim financial report of the Group as at and for the period ended 31 March 2023 comprises the results of the Company and its subsidiaries.  The Group primarily is involved in the exploration and exploitation of mineral resources in Australia, Botswana, Canada, Cameroon, the DRC, USA and Tanzania.

2. Basis of preparation

(a)          Statement of compliance

As permitted, IAS 34, 'Interim Financial Reporting' has not been applied in this interim report.

The financial information presented in this interim report has been prepared using accounting policies that are expected to be applied in the preparation of the financial statements for the year ending 30 September 2023.

These policies are in accordance with the recognition and measurement principles of International Financial Reporting Standards, International Accounting Standards, and Interpretations (collectively IFRS) issued by the International Accounting Standards Board as endorsed for use in the United Kingdom, and these principles are disclosed in the Financial Statements for the year ended 30 September 2022.

The interim results have been prepared on a going concern basis. The financial information in this interim report does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The 2023 interim financial report has not been audited.

The Annual Report and Financial Statements for 2022 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2022 was unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The interim results were approved by the Board of Directors on 27 June 2023.

(b)          Judgements and estimates

Preparing the interim financial report requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expense.  Actual results may differ from these estimates.

In preparing this consolidated interim financial report, significant judgements made by Management in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 September 2022.

(c)           Going concern

The interim financial report has been prepared on a going concern basis. Although the Group's assets are not generating revenues, the Directors believe, having considered all available information, including the Company's proven ability to raise further equity funds from its supportive shareholder base, that the Group will have sufficient funds to meet its expected committed and contractual expenditure for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the interim financial report for the period ended 31 March 2023.

3. Significant accounting policies

The accounting policies applied by the Group in this consolidated interim financial report are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 September 2022.

4. Earnings per share

Basic loss per share

The calculation of basic loss per share is based on the loss attributable to ordinary shareholders of the parent of £1,495,000 (2022: £1,691,000), and a weighted average number of ordinary shares in issue of 1,681,431,009 (2022: 1,404,603,204).

5. Issues of Equity

In November 2022, the company issued 46,134,171 new ordinary shares of 0.1p at a price of 1.75 pence per share, for the initial consideration of the acquisition of an additional 58.7% interest in Kalahari Key Mineral Exploration Pty Limited. The company also issued warrants over 46,134,171 new ordinary shares at a price of 3.5 pence with an expiry date of 18 May 2024.

In January 2023, 2,500,000 new ordinary shares of 0.1p each were issued at a price of 1.5 pence per share for the acquisition of the 4,222-hectar Doerksen Bay graphite project located in Saskatchewan, Canada.

In January 2023, Power Metal raised £900,000 before expenses through the issue of 64,285,714 new ordinary shares of 0.1p each in the company at an issue price of 1.4 pence per share. Each financing share has an attaching warrant to subscribe for one new ordinary share of 0.1 pence each in the Company at an exercise price of 2.0 pence 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 new ordinary shares at an issue price of 2.25 pence per share relating to payment for drill costs in relation to the recently completed Molopo Farms Complex diamond drill programme in Botswana.

At the period end, the Company had 1,739,033,678 Ordinary Shares in issue (30 September 2022: 1,614,654,921).

At the date of this interim report, the Company had 2,064,671,913 Ordinary Shares in issue.

**Ends**

 

END