Acquisition of 75% Interest in GSA (Environmental)

Power Metal Resources PLC (AIM:POW), the London-listed exploration company seeking large-scale metal discoveries across its global project portfolio, announces that the Company has signed binding heads of terms (the "Agreement") with GSA (Environmental) Limited ("GSAe") upon which Power Metal agrees to conditionally acquire 75% of the entire issued share capital of GSAe.

GSAe is a privately owned UK-headquartered engineering technology provider and process licensor, which specialises in the extraction of strategic metals from 'secondary sources' including power station ash, refinery waste, titanium dioxide waste and spent catalysts, while also producing much more environmentally friendly residue. GSAe aspires to be the first-choice global provider of technological solutions to environmental problems posed by toxic metals in waste products.

Power Metal will pay initial consideration of £75,000 through the issue of new ordinary shares of 0.1p each ("Ordinary Shares") in Power Metal, full details of which are set out below. The maximum total consideration for the acquisition is £1 million, payable in cash and/or new ordinary shares in the Company (the "Transaction") with the maximum payment subject to GSAe achieving a number of performance milestones, including a year three annual profit of at least £1 million.

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

"I am very excited to announce this proposed strategic acquisition for Power Metal. We have ambitious plans for this innovative business and believe that the extraction of strategic metals from waste products fits well with our strategy of seeking exposure to the critical metals needed for the global energy transition.

GSAe's proprietary technology has wide application, including in Saudi Arabia, with its plentiful supply of metal-rich power station ash. We believe this acquisition represents a significant step forward in our efforts to become a major operator in the region.

Moreover, the Directors believe the acquisition will also create a substantial revenue opportunity for Power Metal shareholders, which if successful, will allow us to fund our activities with less recourse to dilutive equity financing.

I look forward to announcing the completion of this transaction in due course."

CORPORATE HIGHLIGHTS (GSA (Environmental) Limited)

§ Founded in 2003, GSAe specialises in metals extraction from secondary sources (e.g. refinery residues, TiO2 waste, ash, spent catalysts), providing a sustainable source of strategic metals (including scandium, yttrium, other rare earth elements (REE), vanadium, nickel and niobium) 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/environmental impact by preventing otherwise harmful compounds being released. It also substantially reduces the volumes of waste materials sent to landfill.

§ GSAe already has a Memorandum of Understanding in place with a major Saudi Arabian supplier of fly ash with several further discussions ongoing.

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 Ordinary Shares in Power Metal at an issue price equal to the volume weighted average price ("VWAP") in the 5 trading days immediately prior to the completion of conditions precedent set out below (the "Effective Date");
• 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;
• 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 Second 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 Third Anniversary Date, conditional upon GSAe recording a profit in the relevant period of no less than £1,000,000.

Completion of the Transaction is conditional upon completion of due diligence by Power Metal and other customary pre-conditions.

It is the intention of the parties to the Agreement that the conditions should be satisfied within 30 days from the Effective Date of this Agreement. Should all conditions precedent not be satisfied within 30 days, the Agreement may be terminated at the Company's sole discretion.

While the Directors of the Company believe that the Transaction will proceed, there can be no certainty at this stage that the Transaction will complete. A further announcement will be made in due course.

During the period of 1 June 2023 to 31 December 2023, GSAe incurred a profit (unaudited) of £156,680 and, as at 31 December 2023, it had gross assets of £242,401 (unaudited) and net assets of £40,387 (unaudited).