REG - First Class Metals - Half-year Report
29/09/2023 07:00
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RNS Number : 0656O First Class Metals PLC 29 September 2023
Half Yearly Report
FIRST CLASS METALS PLC
(the "Company" or "FCM")
For the six months ended 30 June 2023
I. Operational Highlights
In early May FCM announced that field work had been initiated on its projects
in Canada, with three exploration teams deployed:
· Channel Sampling of the Rare Earth Element (REE) Diatreme at McKellar
underway.
· Sunbeam historic review widened to encompass detailed core review
from historical drill holes. Grades up to 93.3g/t Gold (Au).
· Field base set up and exploration soon to commence on the North Hemlo
and Esa properties to follow up on the successes of 2022.
A property wise summary of the exploration work conducted in the first six
months of 2023 is enumerated as follows:
North Hemlo
· The Dead Otter Lake area is situated 20.5km North of the iconic
Barrick Hemlo 23m oz producing gold mine.
· The main event of significance is the Identification of a +3km long
gold ('Au') and molybdenum ('Mo') anomalous trend - named the Dead Otter Lake
trend ('DOT'), which is situated to the southeast of the historic Dead Otter
Lake occurrence. Grab samples recorded up to 19.6g/t Au along the trend.
Sampling has extended anomalous Au/Mo mineralisation for +3km to the SE from
the historic showing (3.7 g/t Au, 0.59% Mo). The mineralised structure closely
mimics the granite contact. The 19.6 g/t Au sample, in the extreme SE of the
trend could be where one of potentially two subparallel arcuate structures
intersects the trend.
· The Exploration currently in progress at North Hemlo is with a clear
focus on drill preparation. Visible gold has been observed in multiple grab
samples from the Dead Otter Trend.
· Exploration permit has been submitted to the Provincial authorities,
reflecting our confidence in our exploration progress and our commitment to
fulfilling all necessary regulatory requirements.
In May, FCM signed an exclusivity agreement for an Option cum Earn-In
arrangement with Ongold a private company in respect to its claims contiguous
to North Hemlo.
Zigzag
· The signing of the Earn-in Agreement with Nuinsco Resources Limited
("Nuinsco") completes the process outlined in the 'Exclusivity Agreement'
announced on the 12th of December 2022 for the Zigzag hard rock lithium
property in NW Ontario.
· The project funding was also announced in the same news release,
James Goozee a High Net Worth Individual ("HNWI") who is a battery metals
focussed investor took the full £300,000 private subscription at 16p per
share.
· Historic grades reported at surface were up to 1.68% lithium (Li20)
over 7.9m and 0.168% tantalum (Ta205) over 2.54m. The claim group covers the
historic Tebishogeshik occurrence as well as other mineralised occurrences.
· The pegmatite hosting the deposit is reported to be more than 800m in
length and 20m thick at surface.
· Sampling by Nuinsco returned strongly anomalous lithium, tantalum,
and rubidium, peaking at 3.55% Li20 with significant tantalum and rubidium
results at 836 ppm Ta₂O5, and 4,003 ppm Rubidium Rb₂2O.
· Exploration Permit already in place, allowing for exploration
activities which may include stripping, trenching, and drilling.
· The property is located 10.5km from the Green Technology Metals
Limited (ASX: GT1) Seymour Project and several other hard rock lithium
properties. It is also close to nearby current and future planned key
infrastructure.
· Zigzag Lithium-Initial reconnaissance trip with the property
completely under the cover of snow returns grades of Lithium (Li) up to 1.00%
and Tantalum (Ta) up to 198 ppm.
Sunbeam
· The historic data and core reviews have been completed.
· Extensive prospecting, sampling, and mapping programs were conducted,
this includes rediscovery of a 3m wide quartz vein on the Pettigrew Trend with
over 200 samples collected.
· Project being prepared for stripping / channel sampling in order to
identify preferred drill locations.
West Pickle Lake ('WPL')
· First Class Metals is delighted to report assay results from the West
Pickle Lake massive sulphide discovery.
· These drill results reinforce both the high-grade nature of the West
Pickle Lake Zone and the potential for tonnage as reported in hole TK22-114,
the widths and grades are similar to the Palladium One RJ Zone approx. 2.5km
to the East and further develops the theory of the chonolith / feeder dykes in
the area to host significant mineralisation.
Selected highlights reported by Palladium One from the West Pickle Zone:
o TK-22-072 2.0% Ni, 0.9% Cu, 0.04% Co, 0.36 g/t Total Precious Metals
("TPM") (Pt+Pd+Au) over 4.1 meters of massive and semi-massive sulphides in
hole
o Including 5.3 Ni%, 1.5% Cu, 0.12% Co, 0.67 g/t TPM over 1.5 meters
o ThesTK-22-073 7.2% Ni, 2.0% Cu, 0.10% Co, 0.56 g/t Total Precious Metals
("TPM") (Platinum (Pt) + Palladium (Pd) + Gold (Au)) over 2.6 meters of
massive sulphides in hole.
o Including 10.3% Ni, 2.9% Cu, 0.15% Co, 0.80 g/t TPM over 1.8 meters
o TK-22-074 3.9% Nickel (Ni), 2.5% Copper (Cu), 0.05% Co, 0.55 g/t Total
Precious Metals ("TPM") (Pt+Pd+Au) over 2.0 meters of massive and semi-massive
sulphides in hole
o Including 8.1% Ni, 2.8% Cu, 0.11% Co, 1.05 g/t TPM over 0.9 meters
o TK22-114 0.6% Ni, 0.4% Cu, 0.01% Co, 0.08 g/t Total Precious Metals
("TPM") (Pt+Pd+Au) over 28.2 meters
o Including 2.0% Ni, 0.6% Cu, 0.04% Co, 0.12 g/t TPM over 3.2 meters
o TK22-118 0.43% Ni, 0.26% Cu, 0.01% Co, 0.06 g/t TPM over 27.0 meters.
o Including 2.0% Ni, 0.7% Cu, 0.04% Co, 0.14 g/t TPM over 1.0 meters
o TK22-116 1.5% Ni, 0.7% Cu, 0.02% Co, 0.30 g/t TPM over 8.0 meters.
o Including 10.0% Ni, 4.47% Cu, 0.14% Co, 2.13 g/t TPM over 1.0 meters
· Hole TK22-76 drilled just off the 100% owned FCM North Hemlo Property
boundary by Palladium One intercepts 46.3m of anomalous nickel mineralisation
in an east west trending structure, further proving up Palladium One's
property wide feeder dyke/chonolith geological model.
· West Pickle mineralised strike length increased to over 600 meters,
remains open to the east and west.
· To date a total of 32 holes, totalling 6,766 meters have been drilled
in the vicinity of the West Pickle Discovery.
Esa
· Total of 478 soil samples were collected from 11 predominantly
subparallel, north - south soil lines in 2022.
· An intermittent 4km anomalous zone has been identified corresponding
to the surface expression of the inferred shear.
· Multiple 10-95 ppb gold (Au) and key pathfinder elements including
molybdenum (Mo), antimony (Sb) and arsenic (As).
· Anomalous trends identified by the soil sampling as well as the
background magnetics highlighting NE structures intersecting the shear,
including: Hemlo 'look alike' angular boulder identified, which reported
0.7ppm Au which is considered significant.
· Extensive soil sampling campaign completed to build on the successful
2022 program with 539 samples now awaiting assay results.
McKellar
"McKellar Trend" - Volcanic Massive Sulphide ("VMS") conceptual trend
supported by reconnaissance and assay results, extending over 550m, open
'along strike' in both directions.
· Over 100 grab samples taken with highlights including 4.82% Zinc (Zn)
80 g/t Silver (Ag)
· Work programme further proves up conceptual VMS model and extension
of historical high grade metal occurrences across the property.
· Eight contiguous claims have been staked, adjoining the southern
boundary of the McKellar property.
· McKellar has a proven potential for Rare Earth Elements ("REE"),
confirmed by sawn channel sampling of diatreme verifies historical findings
and further evidenced REE system.
Enable
· Field work identified a new gold (Au) with significant silver (Ag)
'showing' on the property.
· The historic West Perch Lake showing of ~2ppm Au confirmed and
expanded.
· An exploration permit application is being drafted which will allow
'mechanical exploration' including drilling.
· The winter 2023 exploration campaign was completed with a programme
of lake sediment sampling.
Sugar Cube
· In Q1 2023 a geophysics survey consisting of 578 line km comprising a
helicopter borne low level 100m line spacing magnetic as well as
electromagnetic (EM) survey was completed.
II. Operational Overview
North Hemlo & Esa
Figure showing the relative location of North Hemlo (including OnGold), Esa
and Magical in respect to the Williams gold mine and the district scale shears
associated with mineralisation
North Hemlo
Overview
The Flagship North Hemlo property historically comprised of three claim areas:
Pezim I, Pezim II, and Wabikoba, which weren't contiguous. However, the
addition of the Hemlo North block, acquired from Power Metals Plc., brought
North Hemlo together as one cohesive block.
The property now extends across 448 claims covering ~98km². Note: 33 claims
are effectively under a Joint Venture agreement with Palladium One and FCM's
ownership is reduced to 20%.
There were limited historical showings on the property, the most important
being the gold / molybdenum showing at Dead Otter Lake. The geology /
geophysical signature of the Dotted Lake / Fairservice prospect continues onto
the North Hemlo block. Furthermore, the JV - Earn-in with Palladium One has
significantly enhanced the base, battery, and critical metal potential of the
block.
Further potential is derived from the arcuate inferred shears which mimic the
shear hosting the Hemlo gold mine.
In May, FCM signed exclusivity agreement for an Option cum Earn-In arrangement
with Ongold a private company in respect to its 163 claims, covering 34 km²
contiguous to the north of the North Hemlo property.
An Exploration permit, required for 'invasive' exploration such as trenching,
stripping and drilling, has been drafted and after discussion with the First
Nations submitted to the Ontario Provincial Mining authority for review.
Esa
Overview
The Esa property contains 86 claims, covers 20.6km², and is located
approximately 11km northeast from the Barrick Hemlo gold mine, immediately
south of FCM's North Hemlo property.
The claim block is dissected by a geological / geophysical feature, which adds
significant merit to the block's potential. This structure is considered one
of three subparallel, arcuate trends contained in the Hemlo 'north limb',
which mirror the Hemlo trend to the south. Re-interpretation of geophysical
data further enhanced the property's prospectivity. Extensive exploration was
conducted along this feature in 2022, and further soils sampling and
prospecting conducted in 2023.
The assessment credits generated during the year will maintain the property in
good standing through 2023.
An Exploration permit, required for 'invasive' exploration such as trenching,
stripping, and drilling has been drafted and after discussion with the First
Nations submitted to the Ontario Provincial Mining authority for review.
Work Conducted in 2023
A team was mobilised in early May to continue the exploration at Esa,
focusing on the anomalous soil sample results as well as the 0.7ppm boulder
identified in the central eastern sector as detailed in the recent news
release.
A Further 534 soil samples and 5 rock chip samples have been collected, both
subparallel to the shear - orthogonal to the north striking magnetic features-
as well as in the areas of higher Au anomalism in the previous programme.
Results have not yet been received.
Exploration at North Hemlo project started later in the month when the snow
cover thawed. To advance the prospect towards drill ready status, the
intention is to follow up the encouraging sampling on the Dead Otter Lake
trend which has returned anomalous gold results along its 3km plus strike up
to 19.6 g/t Au. Over the winter months ninety-six lake sediment samples as
well as a number of rock samples were collected from North Hemlo, with very
positive results being reported.
Discussions are ongoing with drill companies to undertake a maiden drilling
programme at Esa and or North Hemlo. To this end the Application for an
Exploration permit has been submitted to the Provincial authorities.
Sunbeam
Overview
The Sunbeam Gold Property includes the historic Sunbeam Mine. This was a
high-grade underground gold mine which operated from 1898 to 1905. The core of
the Property consists of 104 unpatented mining claims covering 20.2km² in the
Ramsay-Wright Township in North-western Ontario.
The Option to purchase was signed with Nuinsco in October 2022. Nuinsco holds
the claims through an underlying agreement with several prospectors who held
the claims. In February 2023, FCM made a second payment to Nuinsco, and the
claim ownership was transferred to FCMC for the central Sunbeam area. The
third and final payment, (in total Cdn$700,00), was made in June. The Sunbeam
extended (English Option extending over 24.8km²) is still part of an Option
agreement with Nuinsco and the claim owner, which FCM has assumed.
Work conducted in 2023
Historic data and core reviews completed alongside extensive prospecting,
sampling, and mapping program which includes rediscovery of a 3m wide quartz
vein on the Pettigrew Trend. Mechanical stripping and then a targeted,
systematic channel sampling programme has been undertaken at potential drill
locations at the Pettigrew and Roy occurrences. Trail access for a drill rig
into the same areas was also completed.
McKellar
Overview
The McKellar property, originally comprising 58 claims, covers ~10.1km² and
is situated in prime geological terrain within the Coldwell complex. Located
to the west of Generation Mining's Palladium Project, McKellar is roughly 25
kilometres from the town of Marathon, the main service centre for Barrick's
Hemlo mine. McKellar has a number of historic 'showings' with significant
values in both base (battery) and precious metals. McKellar was the second
largest of the claim blocks that formed the Power Metals Resources PLC claim
acquisition. Field work conducted in 2022 generated assessment credits that
cover the property into 2023. Eight contiguous claims were 'staked' in
February 2023 in the southern area of the claim block, extending the total
claim area to 12.3km².
An exploration permit, required for 'invasive' exploration such as
trenching, stripping and drilling has been drafted and after discussion with
the First Nations, summited to the Provincial authorities.
Work conducted in 2023
In 2023, 18 sawn channel samples of approximately 1m were collected across the
exposed diatreme, which historically reported REE. In addition, local scale
prospecting resulted in 5 grab samples also being collected for assay.
Results of the 2023 programme (highest two samples) and other assayed samples
from the diatreme area are included in the table below.
Element Historical assay results for selected elements (including REE's), McKellar FCM recent 2023 sampling showing two highest values, all ppm
Creek Diatreme:
Gold Au 25 ppb N/A
Platinum Pt 17 ppb N/A
Neodymium Nd 300 ppm 259, 205
Lanthanum La 400 ppm 362, 253
Beryllium Be 2.8 ppm 5 all others BLD
Cerium Ce 513 ppm 653, 503
Yttrium Y 214 ppm 287, 193
Strontium Sr 1280 ppm 1410, 1360
Thorium Th 180 ppm 145, 140
U308 38 ppm U: 32.8 23.4
Table showing historic as well as FCM generated sample results from the
McKellar diatreme
Zigzag
Overview
The 6-unit claim group spans approximately 1.2km and covers the historic
Tebishogeshik lithium occurrence as well as other mineralized sites. The
claims are a part of an 'Option' Agreement with Nuinsco signed in March 2023.
Nuinsco, whilst not the registered owners, hold an Option to Purchase
agreement with the claim owner. By virtue of this agreement, FCM has committed
to a four-year work programme as well as staged payments to Nuinsco, which can
be accelerated. At the fulfilment of these obligations, FCM will own the claim
option on an 80:20 arrangement with Nuinsco. At this point a JV would be
entered into between FCM and Nuinsco for the further development of the mining
claims. Should either party not wish to contribute to the JV they would be
diluted as per an agreed dilution formula. If either Nuinsco or FCM is diluted
to 10% ownership their entire remaining ownership would be automatically
converted into an NSR.
Work conducted in 2023
During a winter reconnaissance of the Zigzag property in order to assess
access the team identified an old trench for which sample information was not
available. Four samples were collected from the in-situ debris flanking the
trench. The results, tabulated below validate previous sampling, with values
up to 1.0% (10,000ppm):
Sample number Lithium (Li) ppm Tantalum (Ta) ppm
A1104880 1390 184
A1104881 5070 84.7
A1104882 10000 139
A1104883 1180 198
Table showing Zigzag grab sampling results
Sugar Cube
The Sugar Cube claim block of 205 claims, covering ~43km², is contiguous to
the north-west of Silver Lake's 1.6Moz+ Sugar Zone gold mine. Sugar Cube was
one of the 'seed' properties that formed the pre-IPO company portfolio.
Work Conducted in 2023
Whilst virtually no ground-based exploration was conducted in 2022, in Q1 2023
a 578 line km geophysics survey comprising a helicopter borne low level 100m
line spacing magnetic as well as electromagnetic (EM) survey was completed,
which will provide sufficient credits to maintain this entire block through
2023
The survey data was processed by the contractor then passed to Paterson Grant
Watson (PGW) who undertook a detailed interpretation. This interpretation will
determine future field work to 'ground-truth' any identified anomalies.
Other Properties:
FCMC Inc. holds a further 85 claims totalling 18km² in three Properties in
the Hemlo area, (Enable, Coco East and Magical), however, either no work was
conducted, or no work reported in the public domain associated with these
Properties.
III. Corporate and Financial Highlights
The start of 2023 has witnessed several corporate actions by the Company as
the business positions itself to exploit the remarkable team and network it
has developed. FCM now moves into a period of development that will see a
major upturn in work across its portfolio of assets.
· On 7th February 2023 the Company announced the 2(nd) Instalment
of the Sunbeam option was completed with a payment of CAD$150,000 made to
Nuinsco.
· On 9(th) March 2023 the Company announced the Earn-In into the
Zigzag Lithium project, which included a cash payment of $50,000 on signing
and the issue of CAD$25,000 equivalent in ordinary shares.
· On 15(th) March 2023, the Company announced that it had received
notice of an exercise of a total of 600,000 warrants with an exercise price of
12.5p, raising gross proceeds of £75,000 for the Company. Admission of the
shares took place on the 21(st) of March 2023.
· On 29(th) March 2023 we announced receipt of the final payment of
CAD$140,000 of the 2022/3 Ontario Junior Exploration Grant ("OJEP") for work
completed on the North Hemlo property.
· On 26(th) June 2023 the Company announced the placing,
subscription, and exercise of warrants of 10,491,700 ordinary shares raising
gross proceeds £1,049,170 all at the price of 10p per share. Admission of
these shares took place on or before 10(th) July 2023.
· The Annual General Meeting ("AGM") of the Company was held on
29(th) June 2023, at which all resolutions were duly passed.
James Knowles, Chairman commented:
The first half of 2023 has been an exciting time for First Class Metals.
Following on from the IPO in July 2022 and successful inaugural field season
we looked to develop our diverse portfolio of precious and base metal focused
assets in Ontario further.
With fieldwork planned and in operation across Sunbeam, North Hemlo, Esa,
Enable and Zigzag the year started with a very active program. Behind the
field work the Company's board progressed drilling permits and amendments to
existing permitted properties.
With the addition of the Zigzag Lithium project 'earn-In' we now have exposure
to a key battery metal project, located in an area of Ontario which holds
numerous other developing hard rock lithium projects and future processing
infrastructure.
The progress of the Company during the period has been tremendous and with the
successful completion of our fund raise, on 26(th) June 2023, First Class
Metals is funded to continue to drive through the exciting planned workstreams
ahead.
I would like to take this opportunity thank and congratulate our teams and
partners in Canada for their hard work and results and to state that we very
much look forward to continuing to push this exciting portfolio of assets
onwards.
IV. Financial Review
Funding
At the period end, the Group was funded through investment from its
shareholders following successful post-IPO fund raising events. A sum of
£1,186,478.20 was raised through warrant conversion and private placement.
Current Assets
At 30(th) June 2023, the Group had trade and other receivables of £157,632
(Dec 2022: £226,217, June 2022: £31,177).
Liquidity, cash and cash equivalents
At 30(th) June 2023, the Group held £844,131 (Dec 2022: £712,715, 30 June
2022: £227,683) of cash and cash equivalents, all of which are denominated in
pound sterling.
Going concern
The financial information has been prepared on the basis that the Group will
continue as a going concern.
As a junior exploration company, the Directors are aware that the Company must
seek funds from the market to meet its investment and exploration plans and to
maintain its listing status.
The Group's reliance on a successful fund raising presents a material
uncertainty that may cast doubt on the Group's ability to continue to operate
as planned and to pay its liabilities as they fall due.
The Company successfully raised £1,186,478.20 in the period ended 30(th) June
2023 through a combination of issuing new shares and warrant conversions.
The Directors are aware of the reliance on fund raising within the next 12
months and the material uncertainty this presents but having reviewed the
Group's working capital forecasts they believe the Group is well placed to
manage its business risks successfully providing the fund raising is
successful.
Statement of Directors' Responsibilities
The Directors are responsible for preparing this report and the financial
statements in accordance with applicable United Kingdom law and regulations
and UK adopted International Financial Reporting Standards ("IFRS").
Company law requires the Directors to prepare financial statements for each
financial period which present fairly the financial position of the Company
and the financial performance and cash flows of the Company for that period.
In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
• state whether applicable IFRS standards have been followed, subject to any
material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business; and
• provide additional disclosures when compliance with the specific
requirements in IFRS standards is insufficient to enable users to understand
the impact of particular transactions, other events and conditions on the
entity's financial position and financial performance.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Company financial statements comply with the
Companies Act 2006 and Article 4 of the IAS Regulation. They are also
responsible for safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report and Corporate Governance Statement that comply with that law and those
regulations, and for ensuring that the Annual report includes information
required by the Listing Rules of the Financial Conduct Authority.
The financial statements are published on the Company's website
https://www.firstclassmetalsplc.com/ (https://www.firstclassmetalsplc.com/) .
The work carried out by the Auditor does not involve consideration of the
maintenance and integrity of this website and accordingly, the Auditor accepts
no responsibility for any changes that have occurred to the financial
statements since they were initially presented on the website. Visitors to the
website need to be aware that legislation in the United Kingdom covering the
preparation and dissemination of the financial statements may differ from
legislation in their jurisdiction.
The Directors confirm that to the best of their knowledge the Company
financial statements give a true and fair view of the assets, liabilities,
financial position of the Company.
V. Half yearly accounts
Consolidated Income Statement for the Period from 1 January 2023 to 30 June
2023
6 months to 6 months to 12 months to
30 June 30 June 31 December
2023 2022 2022
£ £ £
Unaudited Unaudited Audited
Revenue - - -
Cost of sales - - -
Gross loss - - -
Administrative expenses (693,460) (159,790) (693,583)
Operating loss (693,460) (159,790) (693,583)
Finance income 2,058 12 461
Finance costs (53,298) - (7,918)
Net finance cost (51,240) 12 (7,457)
Loss before tax (744,700) (159,778) (701,040)
Loss for the period (744,700) (159,778) (701,040)
Profit/(loss) attributable to:
Owners of the company (744,700) (159,778) (701,040)
Loss for the period (744,700) (159,778) (701,040)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation (losses)/gains (84) 123,772 98
Total comprehensive (loss)/income for the period (744,784) (36,006) (700,942)
Total comprehensive (loss)/income attributable to:
Owners of the company (744,784) (36,006) (700,942)
Loss per share: (1.06)p (0.17)p (1.31)p
Consolidated Statement of Financial Position as at 30 June 2023
Note 30 June 30 June 31 December
2023 2022 2022
£ £ £
Unaudited Unaudited Audited
Assets
Non-current assets
Property, plant and equipment 5 1,169 - 812
Mineral property exploration and evaluation 4 2,914,105 1,751,778 2,256,720
2,915,274 1,751,778 2,257,532
Current assets
Trade and other receivables 7 157,632 31,177 226,217
Cash and cash equivalents 8 844,131 227,683 712,715
1,001,763 258,860 938,932
Total assets 3,917,037 2,010,638 3,196,464
Equity and liabilities
Equity
Share capital 9 (79,551) (50,944) (69,049)
Share premium (4,470,806) (1,486,947) (3,395,168)
Equity reserve (22,201) - (10,258)
Foreign currency translation reserve (14) - (98)
Retained earnings 1,614,079 204,700 869,379
Equity attributable to owners of the company (2,958,493) (1,333,191) (2,605,194)
Non-current liabilities
Other non-current financial liabilities - - (15,353)
Current liabilities
Trade and other payables 12 (459,558) (377,448) (357,325)
Loans and borrowings 10 (498,986) (300,000) (218,592)
(958,544) (677,448) (575,917)
Total liabilities (958,544) (677,448) (591,270)
Total equity and liabilities (3,917,037) (2,010,639) (3,196,464)
Consolidated Statement of Changes in Equity for the Period from 1 January 2023
to 30 June 2023
Unaudited Share capital Share premium Equity reserve Foreign currency translation Retained earnings Total equity
£ £ £ £ £ £
At 1 January 2023 69,049 3,395,168 10,258 98 (869,379) 2,605,194
Loss for the period - - - - (744,700) (744,700)
Other comprehensive income - - - (84) - (84)
Total comprehensive income - - - (84) (744,700) (744,784)
New share capital subscribed 10,502 1,075,638 - - - 1,086,140
Other equity reserve movements - - 11,943 - - 11,943
At 30 June 2023 79,551 4,470,806 22,201 14 (1,614,079) 2,958,493
Unaudited Share capital Share premium Equity reserve Foreign currency translation Retained earnings Total equity
£ £ £ £ £ £
At 1 January 2022 943 1,536,947 - - (168,339) 1,369,551
Loss for the period - - - - (36,006) (36,006)
Other comprehensive income - - - - - -
Total comprehensive income - 1,536,947 - - (204,345) (1,333,545)
New share capital subscribed 50,000 (50,000) - - - -
Other equity reserve movements - - - - - -
At 30 June 2022 50,943 1,486,947 - - (204,345) (1,333,545)
Audited Share capital Share premium Equity reserve Foreign currency translation Retained earnings Total equity
£ £ £ £ £ £
At 1 January 2022 943 1,536,947 - - (168,339) 1,369,551
Loss for the period - - - - (701,040) (701,040)
Other comprehensive income - - - 98 - 98
Total comprehensive income - - - 98 (701,040) (700,942)
New share capital subscribed 68,106 1,858,221 - - - 1,926,327
Other equity reserve movements - - 10,258 - - 10,258
At 31 December 2022 69,049 3,395,168 10,258 98 (869,379) 2,605,194
Consolidated Statement of Cash Flows for the Period from 1 January 2023 to 30
June 2023
Note 6 months to 6 months to 12 months to
30 June 30 June 31 December 2022
2023 2022 £
£ £ Audited
Unaudited Unaudited
Cash flows from operating activities
Loss for the period (744,700) (36,006) (701,040)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 266 (123,771) 162
Foreign exchange loss/(gain) 80,474 - (29,831)
Finance income (2,058) (12) (461)
Finance costs 53,298 934 7,918
(612,720) (158,855) (723,252)
Working capital adjustments
Decrease/(increase) in trade and other receivables 7 68,585 (1,985) (176,917)
Increase in trade and other payables 12 102,233 270,866 266,096
Net cash flow from operating activities (441,902) 110,026 (634,073)
Cash flows from investing activities
Interest received 2,058 - 461
Acquisitions of property plant and equipment (624) - (974)
Acquisition of mineral property exploration and evaluation 4 (729,823) (572,081) (1,013,050)
Net cash flows from investing activities (728,389) (572,081) (1,013,563)
Cash flows from financing activities
Proceeds from issue of ordinary shares, net of issue costs 1,098,083 - 1,593,549
Proceeds from other borrowing draw downs 280,394 300,000 587,180
Foreign exchange loss/(gain) - 123,771 -
Repayment of other borrowing (15,353) - (23,747)
Net cash flows from financing activities 1,363,124 423,771 2,156,982
Net increase in cash and cash equivalents 192,833 (38,284) 509,346
Cash and cash equivalents at 1 January 712,715 267,244 267,244
Effect of exchange rate fluctuations on cash held (61,417) (1,277) (63,875)
Cash and cash equivalents at 30 June 844,131 227,683 712,715
Notes to the Financial Statements for the Period from 1 January 2023 to 30
June 2023
1 General information
The Company is a public company limited by share capital, incorporated and
domiciled in England and Wales.
The principal activity of the Company was that of a holding company.
The principal activity of the Group was that of the exploration of gold and
other semi-precious metals as well as battery metals critical to energy
storage and power generation solutions.
The Company's ordinary shares are traded on the London Stock Exchange (LSE)
under the ticker symbol FCM.
The address of its registered office is:
Suite 16 Freckleton Business Centre
Freckleton Street
Blackburn
Lancashire BB2 2AL
United Kingdom
These unaudited interim results comprise the Company and its subsidiary, First
Class Metals Canada Inc.
The Company's interim report and accounts for the six months ended 30 June
2023 have been prepared using the recognition and measurement principles of
International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
These interim financial statements for the six months ended 30 June 2023
should be read in conjunction with the financial statements for the year ended
31 December 2022, which have been prepared in accordance with International
Financial Reporting Standards ("IFRSs") as applied in accordance with the
provisions of the Companies Act 2006. The interim report and accounts do not
include all the information and disclosures required in the annual financial
statements.
The interim report and accounts have been prepared in accordance with IAS34
(interim financial statements) and on the basis of the accounting policies,
presentation and methods of computation as set out in the Company's December
2022 Annual Report and Accounts, except for those that relate to new standards
and interpretations effective for the first time for periods beginning on (or
after) 1 January 2023 and will be adopted in the 2023 annual financial
statements.
The financial information is presented in Pounds Sterling, rounded to the
nearest pound and has been prepared under the historical cost convention.
The interim report and accounts do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. These interim financial
statements were approved by the Board of Directors on 28 September 2023. The
results for the six months to 30 June 2023 and the comparative results for the
six months to 30 June 2021 are unaudited. The figures for the year ended 31
December 2022 are extracted from the audited statutory accounts of the Company
for that period.
Going Concern
The Directors have confirmed their intention to support the Company whilst it
is in the process of raising funds to achieve its business plans. The
Directors consider that sufficient resources are available to support the
Company's operations for the foreseeable future and therefore believe that the
going concern basis of preparation is appropriate.
2 Loss per share
6 months ended 6 months ended 12 months ended 31 December 2022
30 June 2023 30 June 2022
(unaudited) (unaudited) (audited)
Loss from operations £ (744,700) (36,006) (701,040)
Weighted average number of shares 70,410,322 21,673,976 53,456,619
Basic and fully diluted loss per share Pence (1.06) (0.17) (1.31)
Basic loss per share is calculated by dividing the loss attributable to equity
holders of the Company by the weighted average number of ordinary shares in
issue during the period.
There are potentially issuable shares all of which relate to share warrants
issued as part of placings in 2022. However, due to the losses for the year
the impact of the potential additional shares is anti-dilutive and has
therefore not been recognised in the calculation of the fully diluted loss per
share.
3 Earnings per share
The calculation of the basic and diluted earnings per share (EPS) has been
based on the loss attributable to ordinary shareholders and weighted-average
number of ordinary shares outstanding.
4 Mineral property exploration and evaluation
Mineral property exploration and evaluation
£
Cost or valuation
At 1 January 2022 1,179,697
Additions 1,013,050
Foreign exchange movements 63,973
At 31 December 2022 2,256,720
At 1 January 2023 2,256,720
Additions 729,823
Foreign exchange movements (72,438)
At 30 June 2023 2,914,105
Amortisation
At 30 June 2023 -
Carrying amount
At 30 June 2023 2,914,105
At 1 January 2022 1,179,697
5 Property, plant and equipment
Group
Furniture, fittings and equipment
£
Cost
Additions 974
At 31 December 2022 974
At 1 January 2023 974
Additions 624
At 30 June 2023 1,598
Depreciation
Charge for year 162
At 31 December 2022 162
At 1 January 2023 162
Charge for the period 267
At 30 June 2023 429
Carrying amount
At 30 June 2023 1,169
At 31 December 2022 812
6 Investments
Group subsidiaries
Details of the group subsidiaries as at 30 June 2023 are as follows:
Name of subsidiary Principal activity Registered office Proportion of ownership interest and voting rights held 2022
2023
First Class Metals Canada Inc.* Mining of other non-ferrous metal ores 55 York Street 100% 100%
Suite 401
Toronto
ON M5J 1R7
Canada
* indicates direct investment of the company
7 Trade and other receivables
30 June 30 June 31 December
2023 2022 2022
£ £ £
Accrued income - - 85,979
Prepayments 60,479 8,220 67,919
Other receivables 97,153 22,957 72,319
157,632 31,177 226,217
8 Cash and cash equivalents
30 June 30 June 31 December
2023 2022 2022
£ £ £
Cash at bank 844,131 227,683 712,715
9 Share capital
Allotted, called up and fully paid shares
30 June 31 December
2023 2022
No. £ No. £
Ordinary shares of £0.001 each 79,551,294 79,551 69,048,707 69,049
10 Loans and borrowings
30 June 30 June 31 December
2023 2022 2022
£ £ £
Current loans and borrowings
Finance lease liabilities - - 13,433
Convertible debt 498,986 300,000 205,159
498,986 300,000 218,592
The group's exposure to market and liquidity risks, including maturity
analysis, relating to loans and borrowings is disclosed in note 15 "Financial
risk review".
In October 2022, the company has access to a drawdown facility of £1,000,000,
of which £500,000 was drawn down as of June 30, 2023.
11 Leases
Lease liabilities maturity analysis
A maturity analysis of lease liabilities based on undiscounted gross cash flow
is reported in the table below:
30 June 30 June 31 December
2023 2022 2022
£ £ £
Less than one year - - 13,433
12 Trade and other payables
30 June 30 June 31 December
2023 2022 2022
£ £ £
Trade payables 183,257 161,062 82,006
Accrued expenses 269,562 32,051 236,810
Social security and other taxes 4,875 3,535 7,667
Outstanding defined contribution pension costs 1,864 - -
Other payables - 180,800 30,842
459,558 377,448 357,325
13 Financial risk review
Group
Principle risks & uncertainties are detailed in the most recent Annual
report (page 41 & 42) which can be found on the company's website and
remain unchanged. This Annual Report can be found at:
2022+Annu\al+Report+&+Financial+Statements.pdf (squarespace.com)
(https://static1.squarespace.com/static/609bd256aea691347dbcf1ed/t/64870e727bbd756e9bff51bc/1686572659433/2022+Annual+Report+%26+Financial+Statements.pdf)
In addition, this note presents information about the group's exposure to
financial risks and the group's management of capital.
Capital risk management
The Group's objectives when managing capital are: (a) To maintain a flexible
capital structure which optimizes the cost of capital at acceptable risk; (b)
To meet external capital requirements on debt and credit facilities; (c) To
ensure adequate capital to support long-term growth strategy; and (d) To
provide an adequate return to shareholders. The Group continuously monitors
and reviews the capital structure to ensure the objectives are met. Management
defines capital as the combination of its indebtedness and equity balances, as
disclosed in note 13, and manages the capital structure within the context of
the business strategy, general economic conditions, market conditions in the
power industry and the risk characteristics of assets. The Group's objectives
in managing capital and the definition of capital remain unchanged throughout
the period. External factors, such as the economic environment, have not
altered the Group's objectives in managing capital.
Credit risk
The group's definition of credit risk is Credit risk is the risk of financial
loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. At present the Group does not have
any customers and its risk on cash and bank is mitigated by holding of the
funds in an "A" rated bank.
Liquidity risk
The group's definition of liquidity risk is Liquidity risk is the risk that
the Group will not be able to meet its financial obligations as they become
due. The Group manages liquidity risk by maintaining adequate cash balances.
Market risk
The group's definition of market risk is Market risk is the risk that changes
in market prices, such as commodity prices, will affect the Group's earnings.
The objective of market risk management is to identify both the market risk
and the Group's option to mitigate this risk.
A majority of the Group's operating costs will be incurred in US and Canadian
dollars, whilst the Group has raised capital in £ Sterling. The Group will
incur exploration costs in US and Canadian Dollars, but it has raised capital
in £ Sterling. Fluctuations in exchange rates of the US Dollar and Canadian
Dollar against £ Sterling may materially affect the Group's translated
results of operations. In addition, given the relatively small size of the
Group, it may not be able to effectively hedge against risks associated with
currency exchange rates at commercially realistic rates. Accordingly, any
significant adverse fluctuations in currency rates could have a material
adverse effect on the Group's business, financial condition and prospects to a
much greater extent than might be expected for a larger enterprise.
Interest rate risk is the risk that the fair value of the future cash flows of
a financial instrument will fluctuate because of changes in market rates of
interest. As the Group has no significant interest bearing assets or
liabilities, the group's operating cash flows are substantially independent of
changes in market interest rates. Therefore, the Group is not exposed to
significant interest rate risk.
14 Post balance sheet events
In July FCM announced that it has signed an agreement with OnGold Investment
Corp ("OnGold") in respect to the Pickle Lake Property, McGill Township
in Ontario . The property consists of 163 single cell mining claims,
comprising 3,455ha (hectares). Contiguous to both First Class Metals, North
Hemlo Property and Palladium One (TSXV:PDM) Tyko Project. Eleven high priority
targets defined on the property from previous operators work program. Winter
Lake Sediment sampling by FCM across the area as part of the due diligence
process returned gold grades of up to 103ppb gold (Au) which is deemed to be
extremely high for the wider area.
15 Related party transactions
Parties are considered to be related if one party has the ability (directly or
indirectly) to control the other party or exercise significant influence over
the other party in making financial and operating decisions. Parties are also
considered related if they are subject to common control or common significant
influence. Related parties may be individuals or corporate entities.
During the period, the Group incurred consultancy and travel expenses in
relation to the intangible assets from Specialist Exploration Services
(Scotland) Limited, a company controlled by a common director. The services
were for £53,850.46 (Dec 2022: £121,965) of which £7,350 (Dec 2022:
£7,000) was outstanding at the year end.
On the 26th Of June 2023 Marc J Sale subscribed to £37,500 shares in a
private placement totalling 375,000 shares. The shares will be held in the
name of Specialist Exploration Services Scotland Ltd which is a UK registered
company controlled by Mr Marc J Sale.
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