Fulcrum
Metals plc / EPIC: FMET / Market: AIM / Sector: Mining
30 January 2024
Fulcrum Metals
plc
("Fulcrum" or the "Company" or the "Group")
Fulcrum signs Letter of
Intent for Option and Royalty agreement with Global Energy Metals
Corporation
over Saskatchewan uranium
projects
Fulcrum Metals plc (LON: FMET), a
company focused on mineral exploration and development in Canada,
is pleased to announce that Fulcrum Metals (Canada) Ltd, a wholly
owned subsidiary of the Group, has signed a non-binding
Letter of Intent (the "LOI") with TSX Venture Exchange listed
Global Energy Metals Corporation ("GEMC", or "Global Energy") for
an option and royalty agreement over the Company's Saskatchewan
uranium properties.
Under the terms of the LOI, Fulcrum
will receive, upon the entering into of a definitive agreement, 5
million common shares in GEMC. In addition, a further CAD$1million
in cash and shares in GEMC would become payable to Fulcrum should
the option agreement (the "Option") be exercised by GEMC in the
two-year option period. In return, GEMC would receive, upon
exercise of the Option, a 19.9% equity
interest in both Fulcrum's owned uranium properties (the "Owned
Projects") and the uranium properties for which Fulcrum has options
over (the "Optioned Projects") (if and when the options are
exercised), consisting of the Charlot-Neely, Fontaine Lake,
Snowbird and South Pendleton projects (the "Properties"). In
addition, GEMC will receive, upon the entering into of a definitive
agreement, a 0.5% royalty on net smelter returns royalty (the
"NSR") in the Properties.
The LOI is non-binding and sets out
the intention of both parties to enter into a definitive agreement
on the terms set out in the LOI, the key terms of which are
summarised in this announcement. There can be no guarantee that a
definitive agreement in relation to the option and royalty
agreement will be entered into nor that the terms will be the same
as set out in the LOI and this announcement. Furthermore, there can
be no guarantee that the Option will be exercised by GEMC during
the two-year option period.
Mitchell Smith (Non-Executive
Director of Fulcrum Metals) is the CEO of GEMC and holds c. 6.85
per cent. of the issued share capital of GEMC.
The transaction contemplated above
is a "Non-Arms' Length" transaction in accordance with applicable
securities legislation of the TSX Venture Exchange ("TSXV").
Mitchell Smith has declared his conflict to the boards of both
companies and abstained from voting on the transaction.
LOI, option and NSR agreement highlights
·
Fulcrum will grant to GEMC a 2-year option for a
19.9% interest in Fulcrum's owned and optioned uranium
portfolio;
·
In order to exercise the Option, GEMC shall pay to
Fulcrum CAD$1million as a combination of cash and GEMC Shares, as
agreed to by both parties at that time;
·
Fulcrum to receive, upon signing of a definitive
agreement, 5,000,000 GEMC shares at a deemed price of CAD$0.06 a
share, representing a 9.9% shareholding in
GEMC;
·
GEMC to receive a 0.5% net smelter returns royalty
in the Properties;
·
If the Option remains unexercised on the one-year
anniversary of entering into a definitive agreement, GEMC shall pay
to Fulcrum CAD$50,000 in cash and CAD$125,000 in shares in GEMC,
otherwise the Option will lapse;
·
Fulcrum would retain operational control over the
Properties;
·
Provides an underlying valuation of the
Properties;
·
Provides Fulcrum with exposure to GEMC's portfolio
of non-operated, joint venture funded battery metals projects and
catalogue of royalties;
·
Marks the collaboration of Fulcrum Metals and GEMC
working to explore further monetisation of the Company's uranium
properties;
·
GEMC and Fulcrum will negotiate in good faith to
settle the terms a definitive agreement within 45 days the signing
of the LOI; and
·
Fulcrum intends to retain any shares received in
GEMC
Ryan Mee, Chief Executive Office of Fulcrum,
commented:
"The letter of intent clearly demonstrates the underlying
value Fulcrum has in its uranium portfolio and validates the
company's strategy and management's approach so
far.
"We have received interest from several companies about the
possibility of investing in our uranium projects, either through a
joint venture or acquisition. We believe that the agreement
with GEMC is in the best interest of all shareholders as we seek to
monetise the uranium assets without diluting shareholders and
provides Fulcrum with exposure to GEMC's active battery metal and
royalty portfolio. Importantly this proposed transaction with
GEMC would enable Fulcrum to retain operational control of its
uranium portfolio.
"I
look forward to working with Global Energy to further delineate
value for the uranium project portfolio at a time when demand for
uranium has been picking up globally as countries focus on
transitioning to cleaner sources of energy and updating the market
in due course as opportunities are matured."
KEY
TERMS OF ACQUISITION
On closing of the transaction,
Global Energy will acquire the NSR and a two-year option from
Fulcrum to acquire 19.9% of the Owned Projects and a 19.9% interest
in the option agreement pertaining to the Optioned Projects. In
consideration for the NSR and the two-year option, GEMC will issue,
subject to TSXV Exchange approval, five million shares at a deemed
price of CAD$0.06 per share to Fulcrum. In order to exercise
the option, GEMC will be required to pay to Fulcrum CAD$1M as a
combination of cash and shares, as agreed by both parties at the
time, at a minimum deemed issue price (the "Floor Price") equal to
not less than the Discounted Market Price (as defined in policies
of the TSXV) at the time a definitive agreement is announced by
GEMC by way of a news release.
If the Option remains unexercised on
the one-year anniversary of entering into a definitive agreement,
Fulcrum is entitled to CAD$50,000 in cash and CAD$125,000 in shares
in GEMC at a deemed price per share equal to the Floor Price.
Fulcrum will remain as operator of the Properties and will maintain
and keep the Properties in good standing.
Should GEMC elect to exercise the
Option it will be provided a carried individual interest on each
project on expenditures until a NI 43-101 compliant Resource
estimate (or other equivalent report) is established. Upon
completion of a resource report, GEMC will be responsible pro-rata
to keep the projects in good standing upon exercising the
Option. Once GEMC exercises the Option, for each resource
delineated in accordance with NI 43-101 on a Property, GEMC will
issue to Fulcrum CAD$100,000 in GEMC Shares at a price per share
equal to the greater of: (a) the Floor Price; and (b) a 20% premium
to Volume Weighted Average Price of GEMC's shares on the TSX for a
period of 5 days. Once a resource report is obtained on each
project, GEMC can participate or be diluted down to 2% at which
time its position will convert to another 0.5% NSR
royalty.
Additional project information
The project portfolio totals over
59k hectares targeting major structures along strike from historic
Uranium mines and projects that have attracted significant
investment. Discoveries such as the Arrow discovery (4.3m tonnes at
0.83% U308) and Triple R discovery (2.7m tonnes at 1.94% U308) have
proved the concept of exploring along structure outside of the
Athabasca basin.
Charlot-Neely Lake
·
Totalling 16,372 hectares located in Northern
region of the Athabasca Basin along the Black Bay
Fault.
·
Covers 20km of the major Black Bay fault structure
which is associated within 10km of 14 historic Uranium mines
of the established Beaverlodge
District.
·
Includes over 16km of historical EM
conductors.
·
Several historical uranium showings with grab
samples up to 6.22% and trenching samples up to 0.15%.
·
The Property contains vein-hosted uranium
mineralisation characteristics of the Beaverlodge area with
potential for unconformity-style mineralisation at
depth - unconformity deposits are known to be larger and contain
higher uranium grades.
·
Extensive radioactivity throughout the property
including new radioactive hotspots identified in 2023 located along
and near structural lineaments is attributed to shear-hosted and
vein-type uranium mineralisation. The presence of off-scale
radiation (>65,535 cps), yellow, Uranium-oxide-stained fractures
with sub-one percent uranium, and strong hematite alteration is
considered typical of structurally - controlled uranium
mineralisation.
·
Sampling in 2023 returned numerous anomalous
uranium samples including over 5,510ppm Uranium and scintillometer
measurements of > 65,535 cps at the historical Peacock
showing.
·
Sampling exhibits strong hematite alteration along
fracture planes and contain alteration overprinting the original
rock enriching the sample in finely disseminated uranium - visible
yellow uranium oxides are present. The radioactive zone is
spatially associated with a large quartz vein and
paragneiss/altered pegmatite veining.
·
Evidence of strong deformation, proximity to a
major fault (Long Lake Fault), and strong alteration signatures
make this a target location for hydrothermal, vein-type uranium
mineralisation.
·
Many high cps samples at locations affected by
glacially polished outcrops and/or rock conditions that are not
conducive to collection of the target material with hammer and
chisel. Below this veneer has potential to be higher in
grade.
·
Additional recommended work includes prospecting,
EM and Magnetic geophysical surveys, geochemical surveys and
geological mapping of key showings to advance the project to drill
ready stage.
Fontaine Lake
Property
·
Covers 5,987 hectares located in the Grease River
area, northeast of Lake Athabasca.
·
Several historical uranium sowings of up to 1.44%
uranium along with rare earth samples of up to 4,732ppm TREE,
6,940ppm Niobium and 1,170ppm Tantalum.
·
2023 sampling returned scintillometer readings up
to 53,000 cps and 7,130ppm Uranium by laboratory assay.
·
The Property contains known vein-hosted uranium
mineralization in addition to anomalously radioactive granites
(Alaskite-type) generally characteristic of low-grade high-tonnage
deposits, comparable to the geological setting of the Rossing
deposit in Namibia.
·
Given the large volume of the radioactive granites
on and near the property, these rocks are candidates to explain the
strongly elevated uranium values observed in the regional lake
sediment sample data.
·
Further work recommendations include prospecting
to follow up on unexplored radiometric highs to confirm sources of
radioactivity which may be masked by radioactive granites; gridded
outcrop sampling over strongly radioactive zones in the granite to
determine the potential for Alaskite-type mineralization on the
Property; and soil or radon geochemical surveys to help delineate
prospective structures related to high grade, vein type
mineralisation.
Snowbird Project
·
The project covers 32,836 hectares of the largely
underexplored Cora Lake and Legs Lake Shear zones between major NE
and SW Snowbird faults and the Black Lake Fault, Northern
Saskatchewan.
·
The Black Lake structure can be traced for at
least 200km across the entire Athabasca Basin and is associated
with Cameco's Centennial deposit (up to 33.9m averaging 8.78%
U3O8 as reported on the Formation Metals
website)
·
The project is on trend with the Historic Nisto
uranium Mine and notable projects Fir Island held by Forum Energy,
Cree Bay held by F3 Uranium, projects held by Kobald Metals, the
Black Lake project held by UEC and recent staking by Dennison
Mines.
·
Mining first occurred at the Nisto uranium Mine in
1950-51. In 1959, Haymac Mines restarted mining and shipped 500
tons of high-grade ore to the Lorado Mill at Uranium City, SK. One
shipment of 106 tons of ore graded 1.6%
U3O8 (Source: Saskatchewan Mineral Deposits Index,
Mineral Property #1621).
·
Limited historic airborne surveys include uranium
airborne anomalies that have not been followed up on.
·
Limited lake sediment surveys identified a number
of highly prospective REE targets and limited rock sampling
identified the Bompas Lake uranium occurrence suggesting a
significantly wide zone of anomalous mineralisation for which the
source of the anomalies had not been identified.
South Pendleton project
·
The project covers 4,115 hectares of the Needles
Fall shear Zone, south of the Athabasca basin.
·
Underexplored area that is sparsely
mapped.
·
Covers 20km of major faulting.
·
Several airborne uranium squared anomalies are
within the property that are yet to be followed up on.
·
Radioactive boulders of upto 7.17% U308 to the
North.
·
In an area that is seeing substantial investment
and development.
Global Energy Metals Corporation information
GEMC currently holds the following
portfolio of representative security and royalty
interests:
·
100% interest in Element Minerals Australia Pty
Ltd ACN 138 488 909, an Australian company that is the 49%
beneficial owner of the Millennium Cobalt-Copper-Gold Project and
has a 20% beneficial interest in two neighbouring discovery stage
exploration-stage cobalt-copper-gold assets, Mt. Dorothy and Cobalt
Ridge, all located in Mount Isa, Australia. GEMC is
free-carried as Metal Bank Ltd earns an 80% interest in Millennium.
GEMC is also free-carried on Mt. Dorothy and Cobalt Ridge until a
Feasibility Study is produced by JV partner Hammer
Metals;
·
100% ownership of U.S. Battery Minerals Corp.,
which holds an 100% interest in two battery mineral projects, the
Lovelock Mine and Treasure Box Project located in Nevada,
USA;
·
10% ownership of Narvik Nikel, which holds an 100%
interest in the Råna Nickel-Copper-Cobalt project, Norway.
Kingsrose Mining has committed and is earning up to an 80% interest
by spending $15 million in project expenditures;
·
13,541,000 common shares in Metal Bank Ltd.
representing 3.8% interest in the issued and outstanding equity of
Metal Bank Ltd., a publicly traded issuer on the Australian
Securities Exchange;
·
2,500,000 common shares in High-Tech Metals Ltd.
representing 7.6% interest in the issued and outstanding equity of
High-Tech Metals Ltd., a publicly traded issuer on the Australian
Securities Exchange;
·
1,350,000 common shares in Electric Royalties
Ltd., a publicly traded issuer, representing a 1.4% equity interest
in the issued and outstanding equity of Electric Royalties
Ltd;
·
637,000 common shares in Sceptre Ventures Inc.,
representing 5.3% interest in the issued and outstanding equity of
Sceptre Ventures Inc., a capital pool company on the
TSXV.;
·
257,178 common shares in Marquee Resources Ltd.
representing 0.06% interest in the issued and outstanding equity of
Marquee Resources Ltd., a publicly traded issuer on the Australian
Securities Exchange;
·
50% interest in the Monument Peak Copper-Silver
project in Idaho, USA;
·
50% interest in the Chance Lake and Amiral
projects in Quebec, Canada;
·
1% NSR royalty on the Råna Nickel-Copper-Cobalt
project, Norway;
·
1% NSR royalty on the Mount Dorothy project,
Australia; and
·
1% NSR royalty on the Cobalt Ridge project,
Australia.
For the year ended 30 June 2023,
Global Energy incurred a loss for the year of CAD$4,930,776 with
net assets of CAD$4,535,354. The loss is attributed to a write down
in some project acquisition costs as GEMC has taken a partner
approach to project development. As such these costs are not
directly incurred and therefore written down.
Technical Glossary
"cps"
|
Counts per second
|
"EM"
|
Electromagnetic
|
"ppm"
|
Parts per million
|
"REE"
|
Rare-earth element
|
"TREE"
|
Total Rare earth elements are a
group of 17 elements composed of scandium,
yttrium and the lanthanides
|
"U308"
|
Triuranium octoxide, a compound of
uranium
|
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.
For further information please
visit https://fulcrummetals.com/
or contact:
Fulcrum Metals PLC
|
|
Ryan Mee (Chief Executive
Officer)
|
Via St Brides Partners
Limited
|
|
|
Allenby Capital Limited (Nominated adviser)
|
|
Nick Athanas / George
Payne
|
Tel: +44 (0) 203 328 5656
|
|
|
Clear Capital Markets Limited (Broker)
|
|
Bob Roberts
|
Tel: +44 (0) 203 869 6081
|
|
|
St
Brides Partners Ltd (Financial PR)
|
|
Ana Ribeiro / Paul Dulieu
|
Tel: +44 (0) 20 7236 1177
|
Notes to Editors
FULCRUM METALS - BACKGROUND
Fulcrum Metals PLC (LON: FMET) is an
AIM quoted exploration company which finances and manages
exploration projects focused on Canada, widely recognised as a top
mining jurisdiction.
Fulcrum currently holds a beneficial
100% interest in highly prospective gold and base metals projects
in Ontario and uranium projects in Saskatchewan.
Fulcrum's strategy is to focus on
discovery and commercialisation of its Projects through targeted
exploration programmes. The primary focus is to make an economic
discovery on the flagship Schreiber-Hemlo Properties and to
establish the prospectivity of its wider Ontario and Saskatchewan
portfolio with a view to securing potential joint venture and/or
acquisition interest.
The Schreiber - Hemlo properties
have a history of prospecting and localised extraction since the
late 19th century. However, coherent property-level exploration
programmes have been limited or absent, particularly in recent
times. Fulcrum has an opportunity to carry out such a programme and
this approach provides the best opportunity to fully explore the
significant prospectivity of the properties. A recent structural
study identified 42 priority exploration targets, of which 24
targets within the Big Bear property and 18 in the Jackfish
property, with 14 in total (9 on Big Bear and 5 on Jackfish) being
ranked as high priority for follow-up. The
properties have the potential to host a large, structurally
controlled, stratabound-style banded iron formation (BIF) gold
prospect similar to the Musselwhite deposit (McNicoll et al.,
2016), in addition to an Archean greenstone, orogenic-style lode
gold prospect, extending past the bounds of known historical
mineral occurrences.
The Tully property, 458 hectares in
area, is located 30 kilometres northeast of Timmins, Ontario and
includes the Tully (Timmins North) deposit, which has been the
focus of several drilling campaigns since its discovery in 1969.
The Tully deposit is located 2 kilometres southwest of the Bradshaw
Gold Project of Gowest Gold Ltd., currently in development. The
property is accessed by an all-weather gravel road that extends 15
kilometres to the east off of highway 655.
While highly prospective, Fulcrum's
mining assets are in the exploration phase, so Fulcrum stands to be
able to add significantly to the inherent value through exploration
success. Fulcrum will continually review opportunities with
potential and with a view to increasing shareholder value. It is
the Board's intention to deliver medium and long-term growth and to
establish the Group as a significant exploration
company.