POWER METAL RESOURCES : OPTION POOL AND PROPOSED AWARD OF NON-EXECUTIVE DIRECTOR OPTIONS

Power Metal Resources plc (LON: POW) the AIM listed metals exploration and development company is pleased to announce the creation of a Company Option Pool for key team members and, subject to shareholder approval, the proposed award of Non-executive Director Options.

Company Option Pool

Power Metal has created a pool of 25 million new options (the 'Pool Options') to acquire new ordinary shares of 0.1p each in the Company ('Ordinary Shares') at an exercise price of 3.25p per share. The Pool Options have a 3-year life to expiry from today's date.

The Pool Options are to be awarded to key members of the Company's operational teams, who are essential to the forward development and growth of the Company in the months and years ahead. To be clear, Power Metal directors will not receive options from this Company Option Pool, which is designed to incentivise other non-board team members.

The Pool Options are subject to a share price performance condition and cannot be exercised until the volume weighted average share price ('VWAP') of the Company has exceeded 5.0p per Ordinary Share for ten consecutive trading days. All recipients will be subject to performance criteria with regard to the Pool Options including a minimum 6 months' service from today's date.

Where possible the Pool Options will be awarded under the Enterprise Management Incentive scheme.

Proposed Award of Non-executive Director Options

In addition to, and separate from the above Company Option Pool, the Company proposes to award options (the 'Director Options') to Non-executive Directors Scott Richardson Brown and Edmund Shaw. The Director Options will be issued immediately following, and subject to, shareholder approval at the next available General Meeting ('GM') of the Company.

The proposal is for both directors to receive 5 million options each to acquire new Ordinary Shares at an exercise price of 3.25p per share. The Options will vest immediately on conclusion of the above GM subject to shareholder approval and have a 3 year life to expiry from today's date.

The Director Options are subject to a share price performance condition and cannot be exercised until the volume weighted average share price ('VWAP') of the Company has exceeded 5.0p per Ordinary Share for ten consecutive trading days. Both directors must also serve for a further 6 months from today's date in their roles as Non-executive Directors.

Related Party Transaction

The proposed grant of the Director Options to Scott Richardson-Brown and Edmund Shaw is deemed to constitute a related party transaction pursuant to AIM Rule 13 of the AIM Rules for Companies. The Directors independent of the proposed grant of the Director Options, being Paul Johnson and Andrew Bell consider, having consulted with the Company's nominated adviser, that the terms of the Director Options are fair and reasonable insofar as the shareholders of the Company are concerned.

Paul Johnson, Chief Executive Officer of Power Metal Resources plc commented: 'I am pleased to announce this proposed award of options to the Company's Non-executive Directors, as recognition of their ongoing role in the Company and the creation of a Company Option Pool to award key members of the team for their ongoing service.

The demands placed on all the Company's team members are immense, given the intensity of Company activities, and that situation is likely to persist going forward.

Once again, we have ensured that options awarded include performance conditions aligning option recipients interests with shareholders. Aside from the premium of the exercise price above the market price (c. 35%) the VWAP performance condition means the share price must increase by at least 108% to 5.0p before the options can be exercised.'

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