REG - First Class Metals - Proposed Strategic Investment

FIRST CLASS METALSAnnouncement

18/12/2024 11:15

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RNS Number : 6041Q  First Class Metals PLC  18 December 2024

 

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

18 December 2024

 

Proposed Strategic Investment by Seventy Ninth Group via Conditional
Subscription

 

First Class Metals PLC ("First Class Metals" "FCM" or the "Company") the
Canada focused precious and base metal explorer, with extensive land holdings
in northern Ontario, announces that it has entered into a conditional
subscription agreement (the "Subscription Agreement") with The 79th GRP
Limited ("Seventy Ninth Group" or the "Investor") regarding a proposed
investment ("Proposed Investment").

Highlights:

·    Proposed Investment in two stages by Seventy Ninth Group of
approximately £2.18 million subject, inter alia, to FCM shareholder approval

·    On completion of both stages of the Subscription Agreement, Seventy
Ninth Group will own approximately 51.2% of the enlarged share capital of FCM

·    Strategic investment to accelerate the development of project
portfolio

·    Potential for business synergies to create new project acquisition
opportunities

·    Deal will represent Seventy Ninth Group's first external equity
investment in the exploration sector

James Knowles, Executive Chairman, commented:

"We are delighted to announce the proposed significant investment in First
Class Metals by Seventy Ninth Group, a diversified asset manager with a track
record of deal selection and value creation. The deal will provide FCM with an
enhanced capability to unlock the potential of our northern Ontario assets.
This investment demonstrates the strength of our proposition, particularly
against the challenging backdrop of UK capital markets. Securing funding of
this nature is essential to advancing our exploration efforts and building
shareholder value. With the backing of Seventy Ninth Group, a supportive
partner with global reach, we are well-positioned to drive forward our
projects efficiently and responsibly."

David Webster, Chairman of The Seventy Ninth Group, commented:

"I am delighted that Seventy Ninth Group is making this investment in First
Class Metals. As an international conglomerate, we will utilise our global
presence to add value across the portfolio and apply the full support of the
group's expertise in developing and financing assets.  As we already hold
exploration projects in the Republic of Guinea and Ontario, Canada, this
investment strengthens our position in the global mining industry whilst
giving us increased exposure to a top-tier mining jurisdiction."

The Seventy Ninth Group Investment Terms

The proposed investment ("Subscription") is to be completed via a direct
subscription into the Company in two stages for a total 128,500,000 ordinary
shares of £0.001 ("Shares") at 1.7p per Share ("Subscription Shares").

The first stage of the Subscription consists of 78,552,084 Shares ("Stage 1
Shares") and uses the Company's current shareholder authority to issue shares
on a non-pre-emptive basis, subject to the publication of an FCA approved
prospectus and shareholder approval of a Rule 9 Waiver at a General Meeting of
the Company ("GM").

The second stage of the Subscription consisting of 49,947,916 Shares ("Stage 2
Shares") will be issued subject to additional shareholder authority at a
second GM to allot additional shares and disapply pre-emption rights along
with shareholder approval for a second Rule 9 Waiver.

Seventy Ninth Group does not currently hold any Shares in the Company however
it has lent £500,000 to the Company in two tranches as announced on 13 June
2024 and 8 October 2024 and under the terms of the Subscription Agreement such
loans together with accrued interest will be capitalised by the issue of new
Shares as part of the Subscription. Following the issue of the Stage 1 Shares,
Seventy Ninth Group will hold 78,552,084 Shares in the Company equating to
approximately 41.0% of the enlarged share capital of the Company. After the
issue of the Stage 2 Shares, Seventy Ninth Group will hold 128,500,000 Shares
equating to 51.2% of the enlarged share capital of the Company. The percentage
of the enlarged share capital after completion of Stage 1 of the Subscription
takes into account the issue, simultaneously with such completion, of (a)
5,995,332 Shares to Mr Ayub Bodi in repayment to him of Shares lent to the
Company on 24 November 2023 (b) 5,882,353 Shares to OnGold Investment Corp.
under the Ongold Agreement dated 26 June 2024 and (c) 492,352 Shares to Broken
Rock Resources Limited under the Quinlan Agreement dated 21 March 2024. The
percentage of the enlarged share capital after completion of Stage 2 of the
Subscription takes into account the issue, simultaneously with such
completion, of 9,500,001 Shares to Mr James Knowles in repayment to him of
Shares lent to the Company on 2 August 2024.

Immediately following the issue of the Stage 2 Shares, the Investor will also
be issued 64,250,000 warrants in the Company exercisable at 5p within three
years of issue and 64,250,000 warrants exercisable at 10p within five years of
issue.

Investment Conditions

Completion of the issue of the Stage 1 Shares is subject to (i) publication of
an FCA approved prospectus, (ii) shareholder approval by independent
shareholders of a waiver in accordance with Rule 9 of the Takeover Code and
(iii) admission of the Stage 1 Shares to the Official List and to trading on
the Main Market of the London Stock Exchange plc ("First Admission").

Completion of the issue of the Stage 2 Shares is subject to (i) First
Admission having occurred; (ii) the Company having the necessary shareholder
authorities to issue the Stage 2 Shares, including disapplication of
pre-emption rights, (iii) approval by independent shareholders of a waiver in
accordance with Rule 9 of the Takeover Code; and (iv) admission of the Stage 2
Shares to the Official List and to trading on the main market of the London
Stock Exchange plc.

At First Admission the following board changes will be implemented:

i)    David Webster will be appointed as a director of the Company and will
become non-executive chairman

ii)   James Knowles will step down as Executive Chairman and will become an
executive director

iii)   Marc Sale will cease to be a director of the Company and will retain
the role of CEO

Further announcements will be made in due course on the Investment.

For Further Information:

Engage with us by asking questions, watching video summaries, and seeing what
other shareholders have to say. Navigate to our Interactive Investor hub here:
Home | First Class Metals (firstclassmetalsplc.com)
(https://firstclassmetalsplc.com/)

For further information, please contact:

James Knowles, Executive Chair

Email: JamesK@Firstclassmetalsplc.com (mailto:JamesK@Firstclassmetalsplc.com)

Tel: 07488 362641

Marc J Sale, CEO

Email: MarcS@Firstclassmetalsplc.com (mailto:MarcS@Firstclassmetalsplc.com)

Tel: 07711 093532

Novum Securities Limited (Financial Adviser)

David Coffman / George Duxberry

Website: www.novumsecurities.com (http://www.novumsecurities.com)

Tel: (0)20 7399 9400

Axis Capital Markets (Broker)

Lewis Jones / Ben Tadd

Website: Axcap247.com (http://www.axcap247.com)

Tel: (0)203 026 0449

 

NOTES TO EDITORS

First Class Metals PLC - Background

First Class Metals listed on the LSE in July 2022 and is focused on metals
exploration in Ontario, Canada which has a robust and thriving junior mineral
exploration sector. In particular, the Hemlo 'camp' near Marathon, Ontario is
a proven world class address for gold exploration, featuring the Hemlo gold
deposit operated by Barrick Gold (>23M oz gold produced), with the past
producing Geco and Winston Lake base metal deposits also situated in the
region.

FCM currently holds 100% ownership of seven claim blocks covering over 180km²
along a 150km strike of the Hemlo-Schreiber-Dayohessarah greenstone belt,
exploring for gold, base metals, and rare earth element mineralization. In
addition, FCM is carrying out a joint venture with Palladium One on the West
Pickle Lake Property in the region, a drill-proven ultra-high-grade Ni-Cu
project.

The flagship property North Hemlo had a high-definition low level magnetic
Heli-borne survey flown in April 2022, this was followed with ground
prospecting which ultimately defined the 'Dead Otter Trend' which is a
discontinuous 4.5km gold anomalous trend with a 19.6g/t Au peak grab sample.
This sampling being the highest known assay ever recorded on the North Limb of
Hemlo.

In October 2022 FCM completed the option to purchase the historical high-grade
past-producing Sunbeam gold mine near Atikokan, Ontario, ~15 km southeast of
Agnico Eagle's Hammond Reef gold deposit (3.3 Moz of open pit probable gold
reserves).

FCM acquired the Zigzag Project near Armstrong, Ontario in March 2023. The
property features Li-Ta-bearing pegmatites in the same belt as Green
Technology Metals' Seymour Lake Project, which contains a Mineral Resource
estimate of 9.9 Mt @ 1.04% Li2O. Zigzag was drilled prior to Christmas 2023
and results have now been released.

The significant potential of the properties for precious, base and battery
metals relates to 'nearology', since all properties lie in the same districts
as known deposits (Hemlo, Hammond Reef, Seymour Lake), and either contain
known showings, geochemical or geophysical anomalies, or favourable structures
along strike from known showings (e.g. the Esa project, with an inferred
Hemlo-style shear along strike from known gold occurrences).

Forward Looking Statements

Certain statements in this announcement may contain forward-looking statements
which are based on the Company's expectations, intentions and projections
regarding its future performance, anticipated events or trends and other
matters that are not historical facts. Such forward-looking statements can be
identified by the fact that they do not relate only to historical or current
facts. Forward-looking statements sometimes use words such as 'aim',
'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal',
'believe', or other words of similar meaning. These statements are not
guarantees of future performance and are subject to known and unknown risks,
uncertainties and other factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
Given these risks and uncertainties, prospective investors are cautioned not
to place undue reliance on forward-looking statements. Forward-looking
statements speak only as of the date of such statements and, except as
required by applicable law, the Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

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