Announcement PDF RNS Number : 7103M Fulcrum Metals PLC 01 May 2024 The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain. Fulcrum Metals plc / EPIC: FMET / Market: AIM / Sector: Mining 1 May 2024 Fulcrum Metals plc ("Fulcrum" or the "Company") Final results for the year ended 31 December 2023 Fulcrum Metals plc (LON: FMET), a company focused on mineral exploration and development in Canada, announces final results for the year ended 31 December 2023. Corporate and Operational Highlights: · · · · · · Admission to trading on the AIM market of the London Stock Exchange ("AIM") and fundraise of £3.0 million (before expenses). Conducted successful exploration programmes across the Schreiber-Hemlo Gold Project, Ontario: · Exceptional gold in rock assays including 45g/t Au, 37.4g/t Au and 33.6g/t Au. · Established a 3km high grade gold corridor with multiple drill targets for testing and open to the North, East and South. · Completed high quality airborne surveys identifying an additional five high priority targets for investigation. Conducted successful exploration programmes across Charlot-Neely and Fontaine Lake Uranium Projects in Saskatchewan: · Identifed high grade uranium mineralisation and new uranium trends. · Significantly increased the exploration footprint of the uranium portfolio in Saskatchewan by 220% to over 59,000 hectares. Raised £520,000 through the issue of convertible loan notes to acquire the Tully Gold Project which has: · A historic gold resource of 107,000 ounces Au. · Expansion potential in the world class Timmins Porcupine Gold camp that has produced over 70 million ounces of gold. Took a strategic step toward lower discovery-risk, nearer cash flow potential, tailings assets through entering an option agreement to acquire 100% of Teck-Hughes Gold Tailings Project in Ontario, Canada. Took significant first mover strategic steps in Canada by entering advanced discussions with Extrakt Process Solutions on using Extrakt's proven, environmentally friendly, non-cyanide, technology which can process tailings from historical mines. Financial Highlights: · · · · The Company generated no revenue during the period but focussed on exploring and developing assets that the Board believes will generate revenue for the Company in the future. For the year ended 31 December 2023 ("FY2023") the Company reported a pre-tax loss of £1,714,423 (year ended 31 December 2022 ("FY2022"): pre-tax loss of £619,597). The Company's net cash balance as at 31 December 2023 was £620,924 (FY2022: £96,985). Basic loss per share of 0.037p (FY2022: loss of 0.072p per share). Post Period Highlights: · · · · · · *Entered into option agreement to divest uranium projects to Terra Balcanica Resources Corp (CSE: TERA) for a potential CA$3.3 million in cash and shares and CA$3.25 million in exploration expenditures. Funds to be used by Fulcrum to accelerate the Company's other projects. Preliminary sampling programme completed at the Teck-Hughes gold tailings project and testing started using Extrakt's technology. Entered into option agreement to acquire 100% of the Sylvanite Gold Tailings Project, the fourth largest gold producing mine in the Kirkland Lake Gold Camp, which: o Produced approximately 1.6 million tonnes of gold between 1927 and 1961. o Has an estimated 67,000 ounces of gold in the tailings. o Is within 3km of Teck Hughes, boosting the company's presence in the area, creating a Kirkland Lake Gold Tailings hub and the opportunity for synergizing costs and economies of scale. Appointed Jason Brewer, who has over 28 years' experience in international mining, financial markets, and investment banking as a strategic adviser to the Company. The Tully Gold project is now permitted and drill ready for 2024. Across the non-core Ontario projects potentially significant copper and nickel exploration targets have been identified. *This is a non-binding agreement and sets out the intention of both parties to enter into a definitive agreement on the terms set out in the Company's announcement on 3 April 2023 ("LOI Announcement"). There can be no guarantee that a definitive agreement will be entered into nor that the terms will be the same as set out the LOI Announcement. Ryan Mee, Chief Executive Officer of Fulcrum, commented: "Whilst recognition of Fulcrum on the market has been frustrating, I am delighted with our operational and exploration achievements. "Fulcrum started its life as a quoted company with multiple highly prospective early-stage hard rock exploration projects, but we have not been afraid of change. Quite the opposite, in fact. "At Fulcrum's core is a unique, driven, entrepreneurial spirit that strives to create opportunity and success to reward every shareholder. This is exemplified in our deal making, such as the acquisition of the Tully Gold project and the sale of our uranium assets for a significant return on investment. Fulcrum now has an exciting hard rock exploration business, with two drill ready gold projects in Big Bear and Tully, which are ready for growth, discovery, and expansion alongside a carried investment in the uranium portfolio we are in the process of disposing of. "I believe that a key differentiator for Fulcrum is the development of a tailings business through key acquisition agreements in Kirkland Lake which, essentially, creates a tailings hub with an estimated 200,000 ounces of gold. The Directors of Fulcrum believe this provides the Company with lower exploration-risk assets, and the ability to turn them in to cash generative assets through collaboration with Extrakt and their disruptive, proven, tailings technology. "Fulcrum's evolution has been significant since the Company's admission to AIM and it continues at pace. The year ahead promises to be an exciting period of growth for the Company." Qualified Person Statement The technical information in this announcement has been reviewed by Edward (Ed) Slowey, BSc, PGeo, technical advisor to Fulcrum Metals Plc. Mr Slowey is a graduate geologist with more than 40 years' relevant experience in mineral exploration and mining and a founder member of the Institute of Geologists of Ireland. Mr Slowey has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which has been undertaken to qualify as a "Qualified Person" in accordance with the AIM Rules Guidance Note for Mining and Oil & Gas Companies. Mr Slowey consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears. Technical Glossary Au Gold Co Cobalt Cu Copper g/t grams per metric tonne NI 43-101 compliant National Instrument 43-101 Standards of Disclosure for Mineral Projects is a securities regulatory instrument that ppm governs how companies information in Canada. Parts per million can disclose U3O8 Triuranium octoxide, a compound of uranium Zn Zinc mining-related For more information, please visit www.fulcrummetals.com or contact the following: Fulcrum Metals plc Ryan Mee, Chief Executive Officer Via St Brides Partners Limited Allenby Capital Limited (Nominated Adviser) Nick Athanas / George Payne +44 (0) 203 328 5656 Clear Capital Markets Limited (Broker) Bob Roberts +44 (0) 203 869 6081 St Brides Partners Ltd (Financial PR) Ana Ribeiro / Paul Dulieu +44 (0) 207 236 1177 Chairman's Statement I am delighted to report on both the operational successes and bold key strategic repositioning of Fulcrum since its Initial Public Offering ("IPO") on AIM in February 2023. The Directors of Fulcrum believe, that during this time, Fulcrum has been transformed from a pure exploration company to one that now heralds advanced drill ready gold projects, low exploration risk gold tailings projects with the potential for near term cash flow and the crystallisation of its uranium portfolio into a carried interest. 2023 was a difficult year for exploration companies and equity capital markets as a whole. It was against that backdrop that the Board was delighted to be able to bring Fulcrum to market for its shareholders. This was only achieved through a great deal of hard work by the Company and its advisers. It was a fantastic effort and an excellent outcome. When Fulcrum was admitted to trading on AIM in February 2023, it had a portfolio of early-stage exploration projects primarily focussed on gold in Ontario and uranium in Saskatchewan. The Company purposely targeted these two metals because of global financial instability and the expectation that nuclear power will become a significant factor in the global focus on clean energy. This focus has, so far, been validated with both gold and uranium being amongst the best performing commodities in terms of spot price rises over the past 12 months. Since Fulcrum's first day of dealings, the Company has diligently deployed the funds it raised at IPO into exploration activities and expansion across its project portfolio whilst remaining true to its strategy of focusing on exploring, discovering, and scaling its properties to deliver results and value for shareholders. As such, our exploration efforts have delivered great progress in both Ontario and Saskatchewan. At the Big Bear property in Ontario, over the course of several exploration programmes we have developed an exciting high grade gold corridor, with a strike length of more than 3km and several rock samples in excess of 10g/t up to 45g/t Au. The results exceeded our expectations at this stage, with multiple drill targets generated, and this trend remaining open for further discovery potential. The original drill permits in place did not cover all of the drill targets, so the Company applied for additional drill permits to cover all of the planned drill targets, and a geophysical survey also identified five additional high priority exploration targets which add to the discovery potential in this emerging area. In Saskatchewan, historical and hyperspectral data compilation, along with helicopter supported field exploration programmes at the Charlot-Neely and Fontaine Lake uranium projects, delivered exciting high grade uranium samples and new radioactive uranium trends which increased the prospectivity of these projects. The success of the programmes and the anticipated trend of increasing uranium demand and pricing encouraged the Company to strategically expand its uranium portfolio to maximise the likelihood of outside investment. Through committed rigorous data collection, the Company expanded its uranium footprint through cost effective staking and acquisition which increased its portfolio from two to four projects and a substantial 220% increase in combined hectares. This strategic move proved to be successful and has culminated in the Company entered into a non-binding agreement to divest its uranium assets to Terra Balcanica Resources Corp., which was announced post the period end. The divestment, which is subject to successful due diligence and both parties entering into a definitive agreement, will provide Fulcrum with potentially up to CA$3.3 million which is payable in cash and Terra Balcanica shares over a four-year period and includes a commitment by Terra Balcanica to spend CA$3.25 million on exploration subject to certain criteria being met. This transaction maintains Fulcrum's interest in the uranium sector without further dilution and, importantly, will allow the Company to retain ongoing exposure to the uranium market via a 1% net smelter return royalty agreement which could prove increasingly valuable as these projects are advanced. In August 2023, Fulcrum bolstered its Ontario gold project portfolio when it announced the acquisition of the Tully Gold project in Timmins, Ontario. Tully includes a NI 43-101 compliant (in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum definitions) resource of 107,000 ounces of gold. It is located within 30km of several multimillion ounce deposits in one of the best producing gold camps globally and the Timmins-Porcupine gold camp has produced over 70 million ounces of gold. The acquisition was funded via a £520,000 fundraise through the issue of convertible loan notes which included a subscription of £195,000 from certain directors of the Company. As a result, Tully became the most advanced project in Fulcrum's portfolio. The Company has subsequently completed a detailed core and data review at Tully which has identified multiple drill targets to expand its understanding of the project and a potential resource expansion. With drill permits now in hand, Tully becomes Fulcrum's second drill permitted gold project in Ontario. The timing of the drill permit approval, combined with poor weather, has resulted in the Company postponing its drill programme, but potential new opportunities have presented themselves and are under review. Fulcrum remained true to its strategy by focusing on exploring, discovering, and scaling its properties across Canada, with the intention of delivering results and value for shareholders. This overarching goal expanded beyond the Company's existing portfolio and saw Fulcrum enter into option agreements to acquire two projects; the Teck-Hughes Gold Tailings Project in November 2023 and, post period, the Sylvanite Gold Tailings Project; both of which are in the Kirkland Lake Gold Camp, one of the most productive gold camps in Canada. Alongside this, the Company also announced in November 2023 that it was in advanced discussions to partner with Extrakt Process Solutions ("Extrakt"), a company that is using innovative, proven, environmentally friendly, technology to extract metals from tailings. Gold tailings are a by-product of the gold mining process which do have an economic value because of their gold content that is usually well documented and based on sampling and historic production, but in most instances never realised. From an environmental perspective, tailings also need to be managed and ultimately addressed, as they can present environmental issues through the leaching of heavy metal elements into surrounding areas and instability issues in dams constructed with tailings caused by water ingress. As a result, the Ontario government monitors and supervises over 400 privately owned tailing dams and the Canadian Government's liability for cleaning up active and historic mine waste is estimated to exceed CA$10 billion. However, a Natural Resources Canada report in 2019 estimated that in excess of CA$10 billion of gold is present in Canadian tailings and Fulcrum believe that its collaboration with Extrakt will enable it to convert its low discoveryrisk tailings opportunities into near term cash generating assets. This will provide shareholders a faster route to revenue generation and also enable Fulcrum to help start to address the harmful impact that tailings can have on the environment. By divesting its uranium portfolio and leveraging opportunities for its drill ready gold projects, Fulcrum is able to direct its focus and resources on the exciting tailings opportunity that Teck-Hughes and Sylvanite projects offer and, potentially, more widely through the development of its relationship with Extrakt and its partner Bechtel Energy Technologies & Solutions, Inc. It has given me great pleasure in writing this Chairman's statement and overseeing Fulcrum's very successful and exciting evolution over the last 15 months. I am confident in the potential that Fulcrum offers as it continues to pursue a sustainable growth strategy and innovative opportunities in the Canadian mining sector. Clive Garston Independent Non-Executive Chairman Operational and Corporate Review The Company remained committed to its strategy of Explore, Discover and Scale. Throughout the reporting period, Fulcrum has made significant headway in advancing its portfolio projects, through the exploration and development of assets in particular with now drill ready gold projects in Tully and Big Bear at Schreiber-Hemlo, the uranium assets which are set for divestment and the scaling of the gold tailings opportunity at Kirkland Lake. Ontario Operationally, 2023 was a success for Fulcrum as it advanced exploration programmes and airborne surveys across a number of its projects. Schreiber-Hemlo In March 2023 the Company announced a successful prospecting programme at Big Bear where 45 rock samples were collected for assay aimed at identifying mineralised areas and structural trends, with rock sample results including 45g/t, 37.4g/t and 33.6g/t gold. This was followed by the appointment of Prospectair Geosurveys in March 2023 to undertake airborne geophysics exploration in which 250 new geophysical anomalies were highlighted, and the results were incorporated with previous magnetic and electromagnetic data over the full Big Bear claim block. The results of this work identified five additional high priority exploration targets for investigation, significantly enhancing the prospectivity of the property. During the summer of 2023, Fulcrum undertook a Phase 2 exploration programme consisting of rock sampling and detailed geological mapping across the Schreiber-Pyramid area of the Big Bear property, followed by an extended Phase 2 programme focussed on infill soil sampling of areas with limited or no bedrock exposure. The results exceeded our expectations having identified a 3km gold mineralised corridor with four drill ready targets and five drill prospect targets which require further development, and is open for further discovery to the North, East and South. The Company is now planning an exploration programme to progress the drill prospects to drill ready, followed by a drilling campaign across multiple drill targets to discover the potential of this newly identified gold corridor, in addition to investigating the five high priority exploration targets. The Company has commenced preparation for this larger programme which includes a recent submission of additional drill permits whilst reviewing funding options which may include equity level financing. Winston Lake Carib Creek Summer exploration consisted of a soil sampling programme with 155 reconnaissance horizon B soil samples collected returning strongly anomalous copper samples outlining an exploration target for further investigation. Best results included values up to 747ppm Cu, with 39 samples (25%) reporting more than 50ppm Cu and anomalous zinc soil samples of up to 236ppm Zn with 64 (41%) reporting more than 50ppm Zn. Table of selected anomalous samples Sample Number Cobalt (Co) ppm Nickel (Ni) ppm Copper (Cu) ppm Zinc (Zn) ppm 478373 6.00 10.10 114.00 32.20 478381 8.40 12.30 182.00 24.20 478384 12.30 19.50 294.00 26.30 478428 46.60 82.50 390.00 156.00 478431 89.80 70.50 747.00 117.00 478436 16.90 30.30 242.00 93.60 478437 25.10 37.80 191.00 236.00 478445 25.70 30.30 313.00 66.60 478446 80.20 57.50 554.00 104.00 478449 6.40 15.40 106.00 42.90 478452 1.90 6.70 107.00 14.20 478491 19.80 28.60 226.00 137.00 479003 19.90 25.90 224.00 47.50 Figure 1: Carib Creek - soil and rock sampling Cu assay results map Beavertrap Although only minor exploration work has been conducted at Beavertrap, the soil sampling results at Carib Creek directed the Company to focus on the stronger, more immediate, exploration potential in this project area. The Company will, therefore, rationalise exploration expenditures and concentrate on Carib Creek, whilst letting the Beavertrap project area expire over the next 12 months. With the exploration expenditure committed to date, this means that Fulcrum retains a strong copper exploration target that requires no further expenditure into 2026. Figure 2: Winston Lake project layout map Dog Lake - Wawa In the northern section of the property, rock and soil sampling was undertaken to locate the historical Anglehart and Gilbert gold occurrences, whilst rock sampling was undertaken in the southern section of the property targeting a magnetic anomaly for nickel. The nickel exploration target in the south of the property is related to mafic/ultramafic intrusive rocks. Limited rock sampling programmes across 2022/23 returned several strongly anomalous samples of up to 2,740ppm nickel (0.27%) confirming mineralisation of the intrusive rocks (Figure 3) with those over 1,000ppm nickel (0.1% ) listed in the table below: Programme Year Sample No. Nickel PPM 2022 1101602 1,360 2022 1101603 1,480 2022 1101604 2,700 2022 1101605 2,040 2023 484944 2,740 2023 484945 1,400 2023 484756 1,350 Figure 3 - Nickel rock sample assay results in the southern section of Dog Lake Gold exploration in the north has not yielded results similar to the historical results reported for the Anglehart and Gilbert occurrences. The company will, therefore, rationalise exploration expenditures and let the northern project area expire over the next 12 months. Exploration expenditures committed to date means that Fulcrum retains a potentially significant nickel exploration target that requires no further expenditure into 2026. Tocheri Lake - Dayohessarah A Versatile Time Domain Electromagnetics (VTEM) airborne geophysical survey conducted over the Southwest corner of the property in March 2023 identified a weak electromagnetic conductor which may indicate buried mineralisation in addition to several magnetic targets. Subsequent prospecting for rock samples has proven to be sporadic and difficult due to significant overburden cover. The Company will remain interested in the southwestern portion of the property which adjoins to GT Resources (formerly Palladium One) Tyco project and allow the remaining portion of the property to expire. This allows the Company to focus on the more prospective area and reduces required exploration expenditures into 2026 whilst retaining our interest over the most prospective part of the property along the borders of Tocheri Lake. Transactions The Group undertook a number of transactions during the period and post the period end, which brought more advanced projects into its portfolio with nearer term revenue generation potential. The Tully Gold Project The acquisition of the Tully Gold Project ("Tully" or "Tully Gold") was announced in August 2023 and marked a significant milestone for the Company as Tully became its most advanced gold exploration project with a 43-101 compliant estimated resource of 107,000 ounces of gold capped at 70g/t Au. The acquisition cost of CA$800,000 represents a cost of less than US$6 per ounce. Tully is located within the world-class Timmins-Porcupine Gold Camp, with an established gold resource, local infrastructure, and expansion opportunities through drilling/infill drilling and re-interpretation of historical data to confirm grade and continuity of mineralisation. A drill core review programme identified an immediate 7 drill locations to test and expand the gold resource outside of the 600m long, 200-400-metre-deep deposit defined to date. Contracting estimates suggests that the all-in drill cost per metre to be highly cost effective in the range of CA$270-290 per metre. The company received drill permit PR-23-000301 which was formally issued 30 January 2024 effective for 3 years which included:- Mechanised drilling off 11-15 pads Creating any trails that may be required for exploration 13 drill locations covering the ore body strike length As part of the Fulcrum due diligence process at Tully a resampling program located 116 selected reject samples from previous drilling which were sent for gold determination by photon assay and, of those, 23 samples were sent for further metallic screen assay. The results of these assays were then also compared to the historic fire assay sample results, which confirmed that all three assay methods yielded broadly similar results. The photon and fire assays are of similar costs whilst metallic assays are substantially more expensive. The photon assay method had significant time saving on producing assay results, taking just 3 days compared to 6-8 weeks for fire assays. An additional benefit of photon assays is that unlike fire assays, the samples remain intact and are not destroyed so that they can be re-used at a later date for further geological testing. The timing of the drill permit issuance and unusually warm weather on site resulted in less than ideal ground conditions to conduct the planned winter drilling campaign. The drilling programme will now be aimed for commencement in late 2024. Kirkland Lake Gold Tailings Projects Fulcrum's wholly owned subsidiary Fulcrum Metals (Canada) Ltd ("FMCL") entered into an option agreement in November 2023 to acquire a 100% interest in the Teck Hughes Gold Tailings project ("Teck-Hughes"), located in Kirkland Lake, Ontario, Canada. Teck-Hughes historically milled 9.5 million tonnes of ore to produce 3.7 million ounces of gold and created 6.5 million tonnes of tailings estimated to contain up to 138,460 ounces of gold. Post period, the Company entered into a second option agreement to acquire 100% of Sylvanite Gold Tailings, ("Sylvanite") an ex-producing mine which is strategically located 3km from the Teck-Hughes Gold Tailings project. Sylvanite was the fourth largest gold producing mine in the Kirkland Lake Gold Camp having milled 4.58 million tonnes of ore and produced 1.67 million ounces of gold between 1927 and 1961. Sylvanite has an estimated 67,051 ounces of gold contained within its tailings. The estimated ounces of gold in the tailings for both projects are not 43-101 compliant and therefore are subject to verification by Fulcrum. These acquisitions are part of a shift by the Company to prioritise and invest in projects that can be brought into production more quickly with minimal investment. Extrakt Process Solutions LLC The success of most tailings projects is dependent on the technology used to extract the remaining resource. The Board of Fulcrum is in advanced discussions with Extrakt Process Solutions LLC regarding the licensing of its proprietary tailings technology. The technology is currently being used in the first phase of testing at TeckHughes. Saskatchewan Uranium Projects During the year, Fulcrum conducted a historical data compilation exercise on its properties just north of the Athabasca Basin, which is the world's leading source of high-grade uranium and currently supplies about 20% of the world's uranium. This exercise confirmed high grade historical uranium samples of up to 6.2% U3O8 including the commissioning of a hyperspectral data analysis on the Charlot-Neely and Fontaine Lake uranium projects to further assist exploration target generation. This was followed by a Phase 1 field exploration campaign which identified high grade uranium mineralisation of up to 0.8% U3O8 along with the discovery of new uranium and radioactive trends. Based on bullish investor sentiment around uranium and the exploration success, the Charlot-Neely project was substantially increased in area, and the Snowbird and South Pendleton projects were acquired and increased in size through cost effective staking and an option agreement. This strategic move increased the company's uranium footprint by approximately 221% from 18,468 hectares (184.5km2) to 59,310 hectares (593.1km2) since listing. On 3 April 2024, post the period end, the Company announced the conditional sale of its uranium projects to Terra Balcanica Resources Corp. ("Terra") (CNSX: TERA), a mining explorer with projects in Bosnia and Herzegovina, and Serbia. The divestment, once completed, will provide Fulcrum with a potential up to CA$3.3 million in cash and equity, a significant uplift on its original investment, and a 1% royalty on all claims ensuring that the Company can continue to benefit from any future upside. Importantly, and as part of the letter of intent announced on 3 April 2024, Terra is committed to investing a minimum of CA$3.25 million on the ground prior to the fourth anniversary of the option agreement. Despite challenging market conditions in 2023, value to shareholders through the exploration and scaling of our assets remains paramount. Fulcrum expects 2024 to bring further operational successes as it scales its assets and develops its existing resources. Consolidated Statement of Comprehensive Income Year ended 31 December 2023 Note Turnover 2023 2022 £ £ - - Administrative expenses 2 (985,684) (254,339) Exceptional Item 5 (646,708) (268,056) Operating loss 2 (1,632,392) (522,395) Finance income 6 56,131 - Finance costs 7 (138,162) (97,202) (1,714,423) (619,597) - - (1,714,423) (619,597) (7,514) (9,169) (1,721,937) (628,766) (1,721,937) (628,766) (1,721,937) (628,766) Loss before taxation Tax on loss Loss for the financial year Foreign currency translation of foreign subsidiaries Total comprehensive loss for the year 8 Loss attributable to: Continuing operations Earnings per share 9 Basic and diluted loss per share (pence per share) (0.037) (0.072) All the activities of the company are from continuing operations. Consolidated Statement of Financial Position As at 31 December 2023 Notes 2023 2022 £ £ Assets Non-current assets Exploration & evaluation assets 10 3,883,651 651,489 Property, plant and equipment 11 1,040 1,592 3,884,691 653,081 Total Non-Current Assets Current assets Trade and other receivables 13 42,948 530,643 Cash and cash equivalents 14 620,924 96,985 663,872 627,628 (134,941) (659,805