REG - Fulcrum Metals PLC - Fulcrum signs LOI for Option and Royalty Agreement

Fulcrum MetalsAnnouncement

30/01/2024 07:15

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RNS Number : 3493B  Fulcrum Metals PLC  30 January 2024

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% U(3)O(8) 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%
U(3)O(8 )(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
 "U(3)0(8)"  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/
(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.

 

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