REG - Power Metal Res. - Acquisition of 75% Interest in GSA (Environmental)

Power Metal ResourcesAnnouncement

29/02/2024 12:45

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RNS Number : 0062F  Power Metal Resources PLC  29 February 2024

29 February 2024

Power Metal Resources PLC

("Power Metal" or the "Company")

Acquisition - Strategic Metals Extraction

Power Metal Acquisition of 75% Interest in GSA (Environmental) Limited

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, TiO(2) 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).

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/
(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/Caroline Rowe/Harry Davies-Ball                                     +44 (0) 20 3470 0470

 SI Capital Limited (Joint Broker)
 Nick Emerson                                                                    +44 (0) 1483 413 500

 First Equity Limited (Joint Broker)
 David Cockbill/Jason Robertson                                                  +44 (0) 20 7330 1883

SP Angel Corporate Finance (Nomad and Joint Broker)

Ewan Leggat/Caroline Rowe/Harry Davies-Ball

+44 (0) 20 3470 0470

SI Capital Limited (Joint Broker)

Nick Emerson
 
 

+44 (0) 1483 413 500

First Equity Limited (Joint Broker)

David Cockbill/Jason Robertson

+44 (0) 20 7330 1883

 

 BlytheRay (PR Advisors)                            +44 (0) 20 7138 3204
 Tim Blythe
 Megan Ray

 

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.

 

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