Audited Results for the Year Ended 30 September 2019

Power Metal Resources plc (LON:POW), the AIM listed mineral resources exploration and development company, is pleased to announce its consolidated audited results for the year ended 30 September 2019 for the Company and its subsidiaries, Cobalt Blue Holdings (“CBH”), Regent Resources Interests Corp. (“RRIC”), and Power Metal Resources SA, (“PMR”), (together the “Group”).

Highlights from the year under review:

Operational

  • Business restructuring and refinancing undertaken and approved by shareholders in February 2019, raising £1 million (before issue costs) in the financial year to support a reinvigorated business model (and a further £700,000 raised in December 2019) and a restructured Company Board;
  • Operational work undertaken on the Company’s Cameroon and the DRC projects, with notable success at the Kisinka Project in the DRC through a termite mound sampling programme highlighting an unexpected 6.8km long copper anomaly requiring further investigation;
  • New operating joint investment project interests acquired in Tanzania and Botswana;
  • In Tanzania an agreement was signed with AIM Listed Katoro Gold plc (LON:KAT) (“KAT”) to acquire a shareholding in KAT and to enter a joint investment whereby Power Metal Resources (“POW”) secured 25% interest in KAT’s Haneti Project, a polymetallic exploration project, with advanced high profile nickel sulphide targets. POW may increase its project to 35% through a payment to KAT of £25,000 by 31 May 2020;
  • In Botswana an Acquisition and Earn-In Agreement was signed with Kalahari Key Mineral Exploration Pty Ltd (“KKME”) to acquire a shareholding in KKME and a right to earn into a 40% interest in KKME’s single project, the Molopo Farms Complex project (the “MFC Project”) in south west Botswana, by expending US$500,000 on a drilling programme at the MFC Project in 2020. (POW exercised that right to earn in on 31 December 2019);
  • As part of the Tanzania and Botswana transactions POW acquired strategic shareholdings in KAT and KKME. In respect of KAT the company acquired, and still holds 10 million shares at 1.0p, and 10 million warrants to subscribe for KAT shares, granted in two tranches of 2.5 million in March 2019 at 1.25p with a 3 year life to expiry, and 7.5 million granted in May 2019 at 1.25p with a 3 year life to expiry, all at a total cost of £100,000 and at the completion of the transaction equating to 5.95% of KAT issued share capital. In KKME POW acquired 3,542 shares at a total cost of US$194,810 or circa £153,000, equating to 18.26% of KKME issued share capital; and
  • Including the above KAT and KKME financial instruments at the year end 30 September 2019 the Company therefore held a shares/warrants portfolio worth circa £310,000.

Financial

  • Loss for the year to 30 September 2019 of £1.6 million (2018: £6.6 million);

  • Pre non-controlling interest total equity of £1.8 million at the year end (2018: £2.1 million); and

  • Raised £1 million (before issue costs) in new equity financing during the financial year, from a combination of new and existing shareholders, including the Directors.

Post-year end

  • On 3 December 2019, the Company entered into an agreement providing an opportunity to acquire a right to earn in to 60% of the Alamo project based in Arizona, USA over a four-year period. The project is prospective for gold and precious metals. Subject to a 45-day due diligence period which was subsequently extended to 30 June 2020 due to restrictions imposed by Covid-19;
  • On 10 December 2019, the Company announced it had raised £700,000 (before costs), through a placing and subscription of 175,000,000 new ordinary shares at a price of 0.40 pence per share, £400,000 of which was allocated to enable the Company to exercise the option to earn-in to the Molopo Farms Complex project as part of the existing agreement with Kalahari Key Exploration Pty Limited;
  • On 31 December 2019, the Company gave written confirmation to Kalahari Key Exploration Pty Limited to elect to earn in to a 40% interest in the Molopo Farms Complex. Combined with the existing 18.26% interest held in Kalahari Key, upon completion, the Company will hold a 50.96% interest in the project;
  • In December 2019, the Company announced First Equity Limited were appointed as joint brokers to the Company. As at 30 September 2019 and at the date of this report, Power Metal Resources plc (“POW”, the “Company” or the “Group”) had two wholly owned subsidiaries, Cobalt Blue Holdings (“CBH”) and Regent Resources Interests Corp. (“RRIC”), as well as a 70% shareholding in Power Metal Resources SA (formerly ABM Kobald SAS), which holds the interest in the Kisinka licence (“Kobald");
  • The Company also holds interest in Katoro Gold Plc (“Katoro”), Kibo Nickel Limited (“Kibo”), Kalahari Key Exploration Pty Limited (“Kalahari”) and Kavango Resources Plc (“Kavango”);
  • In late Q4 2019 the first case of Covid-19 virus was discovered in China and the disease has since been designated pandemic status by the World Health Organisation spreading to a large number of countries around the world. The impact of the Covid-19 virus has seen significant societal dislocation in many countries with normal patterns of life and work notably effected as large numbers of people have been limited to home based working and other restrictions to limit the spread of the virus and enable health providers to manage serious cases within their resources;
  • The impact of the Covid-19 virus also affected financial markets around the world impacting the AIM market where POW is listed and initially caused a fall in junior resource equity share prices and reduced confidence of investors in the junior resource sector. That said, at the time of writing this report, there has been a significant rebound in the financial markets generally, on the AIM market and in the junior resource equity sector. The outcome of the Covid-19 virus has therefore been to create significant market volatility and there is a reasonable expectation that such volatility may well continue for some time; and
  • The majority of POW’s active operations are in Africa, where to date the impact of the virus has been less disruptive, however there is potential for increasing disruption depending on the spread of the virus. As with most of our peers, the future impact of Covid-19 on POW operations is not fully understood at this point or indeed the extent to which the toughened market conditions will persist and potentially impact the Company’s ability to operate efficiently and secure cash for operations from market financings should this be needed. That said at the time of writing we have just safely concluded an active field exploration programme in the DRC and in Botswana where our next field exploration is expected and the government has just published plans to undertake a controlled lifting of the virus lockdown during the course of May. The impact of the virus on operations is clearly country specific and POW is keen to manage its field exploration programmes reflective of each operating environment and the local circumstances at the time. Should field activities prove challenging or impractical to undertake, POW has a portfolio of interests where material work can be done to advance the business interests through office based activities to improve geological understanding and to effect corporate transactions in respect of existing or new opportunities.

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

The audited results for the year ended 30 September 2019 cover a period of significant change for the Company with the financial and managerial restructuring in February 2019 providing an opportunity for a fresh start and new ideas.

In the year to September 2019 we progressed the Cameroon and DRC projects, with notable success in the DRC with the discovery of a 6.8km copper anomaly that is now under further examination. In the year we also announced new strategic project opportunities in Tanzania with the Haneti Polymetallic project and Botswana with the Molopo Farms Complex project.

Since the year end we have added to the portfolio with a significant Australian gold joint venture and due diligence underway in respect of a gold opportunity in the USA and a rare earths project in Botswana.

The pace of growth in our business has been rapid, and this has been underpinned with a careful financing strategy to ensure the Company is robustly financed and may, if our objective is fulfilled, enable us to build our balance sheet toward financial self sufficiency.

The team at POW thank shareholders for their support and with board members and connected parties currently holding around 14% of the Company’s shares we are aligned with all shareholders. Success comes primarily with a large scale metal discovery, and we have a portfolio of interests where we believe that is possible.”

Notice of Annual General Meeting and Distribution of Accounts to Shareholders

The Company's Annual General Meeting will take place at 9.00 am on 19 June 2020 at Abbey House, 282 Farnborough Road, Farnborough, Hampshire, GU14 7NA.  The Company's Annual Report and Accounts for the year ended 30 September 2019 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.

Download the full RNS release (PDF)

DOWNLOAD THE ANNUAL REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2019 (PDF)

Notice of AGM 2020 (PDF)

Form of Proxy for AGM 2020

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20 May 2020

 
 
 

Power Metal Resources plc
201 Temple Chambers
3-7 Temple Avenue
London EC4Y 0DT
United Kingdom

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