REG - First Class Metals - Placing to Raise £603,000

FIRST CLASS METALSAnnouncement

24/11/2023 07:00

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RNS Number : 5302U  First Class Metals PLC  24 November 2023

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "EU MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

 

 

FIRST CLASS METALS PLC

24(th)  November 2023

Placing of 10,050,000 ordinary shares of £0.001 each in the capital of the
Company to raise £603,000

 

First Class Metals PLC ("First Class Metals" "FCM" or the "Company") is a UK
metals exploration company focused on the discovery of economic metal deposits
across its extensive Canadian - northwest Ontario, land holding is pleased to
announce that it has completed a placing of 11,990,665  ordinary shares of
£0.001 par value (the "Placing Shares") at a price of 6 pence per Placing
Share (the "Placing Price"), raising gross proceeds of £603,000 and
satisfying fees of £48,000

The Placing Price represents a 16% discount to the mid-market closing price of
the Company's shares on 21 November 2023, the date of the arrangement of the
Placing. No warrants are being issued in connection with this placing.

Clear Capital Markets Limited & First Equity Limited acted as placing
agents in respect of the Placing.

Use of Proceeds

·    Development of a drill program at the highly prospective Zigzag
lithium/Critical Metals Property.

 

·    Full Repayment of the Sanderson Capital Partners Convertible Loan
Note (the "CLN").

The balance of the placing proceeds will primarily be used to develop a
drilling program at the Company's Zigzag lithium/Critical Metals property in
Northern Ontario. Further details of the intended work will be released
shortly.

The Company intends to repay in full the CLN, which stands at £500,000 drawn.

 

Background

With the recent granting of the Enable and McKellar Exploration Permits, the
Company controls six permitted properties in Ontario, Canada, encompassing
nearly 200km² of land. Within this area, the Company has identified priority
drill targets of robust prospectivity across each of our properties, holding
what is believed to be significant potential for exploration and discovery.

Considering the current climate in terms of timescales, efforts, and physical
costs involved in obtaining permits, the Company believes that having six
fully permitted properties is a significant advantage. These properties are
either already drill ready or in the process of becoming so (some of which are
true 'District-Scale' size), providing the Company with substantial
flexibility moving forward. This level of readiness allows the Company to
capitalize on opportunities efficiently and adapt to changing market
conditions. The Board expects that this portfolio of permitted properties will
position the Company for success and maximize its potential for future growth.

The initial focus of the Company post this fund-raising will be on advancing
exploration activities on the highly prospective Zigzag lithium/Critical
Metals property. Currently, the Company has channel sample assays pending,
which will provide valuable data to plan its next steps. Additionally, the
Company is working on formulating further operations on this property, with
plans to commence drilling activities during the upcoming winter period. The
Company is committed to unlocking the potential of the property and is excited
about the opportunities that lie ahead.

Director's-Stock Lending Agreement(s)

The Company does not presently have sufficient headroom to enable the issue
and admission of the Placing Shares which are required to be issued pursuant
to the placing without the production of a FCA approved prospectus. The
Company is therefore proposing that the directors, James Knowles and Ayub
Bodi, each loan a number of shares amounting, in aggregate, to the Placing
Shares, to the Company by means of a share loan agreement (the "Share Lending
Agreement"), to facilitate the placing of the Placing Shares by the Company.
This loan involves no consideration being paid or security granted to James
Knowles or Ayub Bodi, other than the fee charged under the Share Lending
Agreement, described below.

The placing of the Placing Shares is expected to be completed on or around 30
November 2023.

The Share Lending Agreements provide for the allotment of an aggregate of
11,990,665 new ordinary shares in the Company to James Knowles & Ayub Bodi
by 30 June 2024 to replace the shares loaned in terms of the Share Lending
Agreement.

A fee, equal to  8.25% per annum of  the values of the Placing Shares on the
day of Placing  will be charged on each loan, pro-rata for the period of the
loan, which will be paid in cash unless, if agreed between the Company and the
relevant director that such fee should be satisfied by the allotment of
ordinary shares in the Company.

Related Party Transaction

James Knowles and Ayub Bodi are directors of the Company. The Share Lending
Agreement is considered to be a related party transaction (the "Related Party
Transaction").

Marc Sale, Marc Bamber and Andrew Williamson, being the independent directors
for the purpose of this Related Party Transaction consider that the terms and
conditions are fair and reasonable.

 

James Knowles, Executive Chairman of First Class Metals PLC Commented:

"We decided as a board it was necessary to take advantage of this opportunity
in what is an otherwise difficult and extremely competitive market to raise
funds to enable the development of the high impact first drill program on the
Zigzag lithium/Critical Metals Property and also repay the outstanding CLN.

As a company, we understand the importance of maintaining a strategic balance
between developing our highly prospective portfolio and effectively managing
our available financial resources. We aim to advance our projects to a stage
where they become conducive to monetise. This approach ensures that we
maximize the potential of our portfolio while optimizing resource allocation.
We are dedicated to carefully navigating this balance and strategically
driving our company's growth and success.

I am pleased to be able to assist the company at this time by loaning a
significant portion of my holdings to First Class Metals. By doing so, I
willingly accept the commercial risk associated with this transaction. My
decision to make this loan stems from my utmost confidence in the assets held
by First Class Metals, as well as the exceptional capabilities of our
operational team. I firmly believe that through their expertise and
dedication, we will achieve success and deliver value for all stakeholders
involved.

Furthermore, at this point, the Share Loans will reduce the impact of dilution
for all shareholders until the Company is in a position to allot new shares to
return the loan and allows all shareholders to benefit from any potential
uplift when we have tangible results published, from our more advanced
projects."

Issue of Fee Shares

In addition, 1,940,665 Placing Shares are being placed with various
professional partners, including Sanderson Capital Partners (who have now made
a new small non-dilutive working capital facility available to the company),
to satisfy fees due in connection with the fundraise and also to satisfy
outstanding professional fees from parties who have opted to take payment in
shares over a cash payment.  We welcome this commitment to the Company.

 

 

For Further Information:

 

 James Knowles, Executive Chairman  JamesK@Firstclassmetalsplc.com (mailto:JamesK@Firstclassmetalsplc.com)  07488 362641
 Marc J Sale, CEO                   MarcS@Firstclassmetalsplc.com (mailto:MarcS@Firstclassmetalsplc.com)    07711 093532
 Ayub Bodi, Executive Director      AyubB@Firstclassmetalsplc.com (mailto:AyubB@Firstclassmetalsplc.com)    07860 598086

 

First Equity Limited

(Financial Adviser & Broker)

 

 Jonathan Brown     0207 3742212
 Jason Robertson    0207 3742212

 

Clear Capital Markets Limited

(Placing Agents)

 

 Bob Roberts    0203 8696081

 

 

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