REG - Fulcrum Metals PLC - Interim Results
23/09/2024 07:00
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RNS Number : 2036F Fulcrum Metals PLC 23 September 2024
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended. Upon the publication of this announcement
via the Regulatory Information Service, this inside information is now
considered to be in the public domain.
Fulcrum Metals plc / EPIC: FMET / Market: AIM / Sector: Mining
23 September 2024
Fulcrum Metals plc
("Fulcrum" or the "Company" or the "Group")
Unaudited interim results for the six months to 30 June 2024
Fulcrum Metals plc (LON: FMET), a company focused on mineral exploration and
development in Canada, announces its unaudited consolidated interim results
for the six months to 30 June 2024.
Corporate and Operational Highlights:
· Continued the strategic shift of the Company into a sustainable
gold tailings processing business.
· Commenced phased programme at the Teck-Hughes gold tailings
project to evaluate the efficiency of the Extrakt Processing Solutions LLC
("Extrakt") technology in recovering gold and other by-products:
o Phase 1 results achieved exceptional gold recovery rates of up to 59% by
using Extrakt's technology.
o Optimisation underway to achieve targeted recovery rates above 60%.
· Entered into option agreement to acquire 100% of the Sylvanite
gold tailings project in Kirkland Lake, Ontario, with an estimated 67,000
ounces of gold in tailings.
o Commenced phased programme at the Sylvanite gold tailings project to
evaluate the efficiency of Extrakt's technology in recovering gold and other
by-products.
· Tully Gold project now permitted with drill ready exploration
targets.
Financial Highlights:
· For the six months to 30 June 2024 ("H1 2024") the Company
reported a pre-tax loss of £514,654 (the six months to 30 June 2023 ("H1
2023"): pre-tax loss of £1,167,903).
· The Company's cash balance as at 30 June 2024 was £113,582 (H1
2023: £1,268,202).
· Basic loss per share of 0.010p (H1 2023: loss of 0.030p per
share).
· The Company generated no revenue during the period.
Post Period End Events:
· Closed option agreement for the sale of the Group's uranium
projects for a value of up to CA$3.36 million.
· Announced new equity financing commitments of approximately
£800,000 at 8p per share including investor subscriptions of approximately
£643,500, conversion of supplier fees of £42,000 and proposed Directors'
subscriptions totalling £114,500.
Ryan Mee, Chief Executive Officer of Fulcrum, commented:
"Our journey over the last six months has been transformative as we focus on
unlocking the untapped potential within mining tailings in Canada. The
promising results from the first phase of our programme at Teck-Hughes
highlights the potential effectiveness of Extrakt's technology and sets the
stage for sustainable gold recovery and long-term value creation for the
Group's shareholders. By strategically expanding our portfolio and divesting
non-core assets, we are accelerating our path to revenue and positioning
Fulcrum as a leader in environmentally responsible mining practices.
This acceleration has resulted in a need to access the capital markets for
additional financing. We are pleased to have raised the additional equity
financing to advance the Group's updated tailings strategy, which includes
proposed subscriptions of £114,500 from Directors, to take us to the next
stage of our development. I am excited for the future and confident in our
ability to deliver material value for our shareholders."
Chairman's Statement
I am pleased to present our interim results for the period ending 30 June
2024; a transformative period for Fulcrum as we continue to evolve our
business model from a pure exploration and development company to a strategic
focus on tailings processing that will utilise innovative technology to
extract metals in a sustainable way. Notwithstanding the strategic shift, the
Group's focus remains on the development of mineral resources in Ontario,
Canada. The Group's goal is to create a sustainable and profitable solution to
one of mining's most persistent environmental challenges: the management and
remediation of historical mining tailings, whilst recovering the valuable
metals and minerals they often contain.
Strategic Shift and Rationale
Historically, Fulcrum has been dedicated to the exploration and development of
mineral resources; a journey that often spans over a decade before generating
revenue. While our exploration projects, including the uranium projects in
Saskatchewan, which we successfully divested post the period end, have
considerable potential, the Board of Fulcrum recognised the need to accelerate
the Company's path to revenue generation which led to our strategic decision
to pivot towards the reclamation and processing of mining tailings in order to
extract value from what has long been considered waste.
To this end, we announced mining option agreements to acquire 100% of the
Teck-Hughes gold tailings project ("Teck-Hughes) in November 2023, and the
Sylvanite gold tailings project ("Sylvanite") in April 2024. The projects
contain millions of tons of tailings from the significant former producing
Teck-Hughes and Sylvanite mines, which are strategically located just 3km
apart and within the prolific Kirkland Lake gold camp, Ontario, Canada.
Since announcing the acquisition of Teck-Hughes in November 2023 we have been
advancing discussions with Extrakt to license its proprietary non-toxic
separation technology which extracts metals from tailings without the use of
cyanide. The licencing of the Extrakt technology is usually agreed on a
project basis following the completion of phased testing and study agreements.
We entered into these phased testing and study programs with Extrakt on Teck
Hughes in January 2024 and Sylvanite in June 2024. The initial Extrakt
leaching test work at Teck-Hughes has achieved excellent initial gold recovery
rates of 59.4%, which is far beyond previous cyanide leach testing recovery
rates of approximately 30% at Sylvanite. This demonstrates the applicability
of the Extrakt technology to our projects and our wider aspirations. The
company is continuing term sheet stage discussions with Extrakt on a framework
for gold tailings licence exclusivity for the major Timmins and Kirkland Lake
gold camps that has produced in excess of 110 million ounces of gold to date.
The environmental and social benefits of remediating historical tailings as
well as the considerable size of the market opportunity were also key drivers
in our decision to change strategy. Tailings management is a major challenge
in the mining industry, with significant environmental implications. In Canada
alone it is estimated that the Government is faced with a growing liability of
over CA$10 billion to clean-up active and historic mine waste. Meanwhile,
Natural Resources Canada estimates that there is approximately CA$10 billion
of precious metals contained in tailings. An important outcome from
reprocessing tailings is the removal of heavy metals and the cleaning up and
reclamation of the tailings areas to provide positive opportunities for land
to be repurposed. By seeking to transform waste into a valuable resource, we
are not only addressing a critical environmental issue but also positioning
Fulcrum as a leader in sustainable mining practices.
In line with our evolved strategy, we have successfully divested our
Saskatchewan uranium assets for a value of up to CA$3.36 million, allowing us
to focus more resources on the tailings opportunity and our other gold
exploration projects. Importantly, we have retained an option to benefit from
any future upside potential in the uranium assets which ensures that our
shareholders remain positioned to capture additional value from this
divestment, whilst retaining two drill ready gold projects in Big Bear and
Tully, which are ready for growth, discovery and expansion when funding
allows, or possible joint ventures or divestment if appropriate opportunities
arise.
Our entry into the tailings business diversifies our portfolio and reduces the
inherent risks associated with long-term exploration projects. By entering
into joint venture partnerships over our current portfolio of assets and,
where applicable, divesting our non-core assets, we further mitigate these
risks while enhancing our capabilities and market reach. The Company remains
in advanced discussions with Extrakt with regards to the terms of the
exclusive licencing agreement of its gold tailings processing technology in
Timmins and Kirkland Lake, two significant gold producing regions in Canada.
Discussions on plans to establish an Extrakt technology testing facility in
Timmins, which would provide important localised testing capability for any
tailing project and possible commercial opportunities, are also ongoing.
Finally, I would like to thank Clive Garston, who stepped down as
Non-Executive Chairman in June 2024, for his contribution to Fulcrum. Clive
played an important role at Fulcrum, helping the company successfully navigate
to a quoted company on AIM and oversaw the company evolving from a junior
exploration company to a junior exploration and development company. The
Company has identified a proposed replacement Non-Executive Chairman and will
update the market on this appointment in due course.
The Company has worked resolutely to set in motion an ambitious and exciting
pathway for all shareholders and I thank all stakeholders of the Company for
their support and dedication.
Alan Mooney
Interim non-executive Chairman
CEO Statement
Operational Highlights
· Teck-Hughes: Significant progress was made at the Teck-Hughes gold
tailings project, where the phased evaluation of Extrakt's proprietary
non-toxic separation technology delivered exceptional initial results. Phase 1
demonstrated gold recovery rates of up to 59%, with ongoing optimisation aimed
at exceeding 60% recovery. This marks a critical step in validating the
commercial viability of our tailings processing approach.
· Sylvanite Gold: In April 2024, Fulcrum entered into an option
agreement to acquire 100% of the Sylvanite gold tailings project, which
contains an estimated 67,000 ounces of gold in tailings. A phased evaluation
programme is now underway to assess the efficiency of Extrakt's technology,
further expanding our presence in the prolific Kirkland Lake gold camp.
· Uranium Project Divestment: Post-period, Fulcrum successfully
completed the sale of its Saskatchewan uranium assets, generating funds to
support the Company's strategic pivot towards tailings processing. This
divestment has eliminated a significant cost base while maintaining potential
upside through a retained interest in future developments.
· Big Bear and Tully Gold Exploration Projects: These projects continue
to offer significant exploration potential and remain an important part of our
longer-term growth strategy. The Tully Gold project is now fully permitted and
drill-ready for expansion of the existing 107k ounce 43-101 compliant gold
resource in the significant Timmins-Porcupine gold camp that has produced in
excess of 70Moz gold. At Big Bear we have established high priority
geophysical exploration targets in addition to an open 3km gold corridor and
delineated initial drill targets for discovery in the Schreiber-Hemlo
greenstone belt that hosts the significant 21Moz+ Hemlo gold deposit. Future
plans for the Company's gold projects will largely depend on funding being
available or possible strategic partnerships.
· Focus on Sustainable Operations: In alignment with our commitment to
sustainability, and the exceptional gold recovery rates demonstrated by the
Extrakt technology, we are currently discussing terms on exclusivity of the
licencing of the Extrakt technology for gold tailings in Timmins and Kirkland
Lake in addition to exploring plans to establish an Extrakt technology testing
laboratory in Timmins. Completion of either or both initiatives would
substantially increase the presence and capability in scaling opportunities
for Fulcrum; and would position Fulcrum at the forefront of the application
and adoption of Extrakt's technology in the Timmins and Kirkland Lake gold
tailings. It would also provide an additional commercial opportunity through
local testing capability for Fulcrum non-operated projects. By its very
nature, remediating historical tailings has the potential to clean up and
repurpose otherwise polluted land. By seeking to transform mining waste into a
valuable resource, we are not only addressing a critical environmental issue
but also positioning Fulcrum as a leader in sustainable mining practices.
These milestones reflect Fulcrum's focus on operational excellence, strategic
growth, and the development of sustainable mining solutions.
Financing
Post period on 13 September 2024, Fulcrum announced successful equity
financing commitments of approximately £800,000 at 8p, including investor
subscriptions of approximately £643,500, conversion of supplier fees of
£42,000, proposed Director subscriptions of £89,761 and proposed conversion
of accrued Director salaries of £24,731. The proceeds will primarily be used
to accelerate testing and onsite evaluation programmes at the Teck-Hughes and
Sylvanite gold tailings projects and for the Group's working capital needs.
Outlook
As we move forward, our focus is on executing our tailings processing
strategy. We are committed to developing Fulcrum as a revenue generating
business while upholding our values of sustainability and innovation. The
divestment of non-core assets, like the Saskatchewan uranium project, has
provided us with greater financial flexibility to invest in our refined
strategy and to pursue opportunities that align with our vision.
We believe this strategic pivot will create long-term value for our
shareholders by accelerating our path to profitability and positioning Fulcrum
as a leader in the reclamation and processing of mining tailings in Canada.
The progress we have made so far gives us confidence in our ability to deliver
on these goals, and we are excited about the future of the Company.
I would like to take the opportunity to thank management and shareholders for
their support and shared vision of what we are seeking to achieve and look
forward to updating them on our progress.
Ryan Mee
Chief Executive Officer
For more information, please visit www.fulcrummetals.com
(http://www.fulcrummetals.com) or contact the following:
Fulcrum Metals plc
Ryan Mee, Chief Executive Officer Via St Brides Partners Limited
Allenby Capital Limited (Nominated Adviser) +44 (0) 203 328 5656
Nick Athanas / George Payne
Clear Capital Markets Limited (Broker) +44 (0) 203 869 6081
Bob Roberts
St Brides Partners Ltd (Financial PR)
Ana Ribeiro / Paul Dulieu +44 (0) 207 236 1177
UNAUDITED INTERIM FINANCIAL INFORMATION ON
FULCRUM METALS PLC
Consolidated Income Statement of Comprehensive Income
for the six months ended 30 June 2024
Unaudited Unaudited Audited
Notes 6 months ended 6 months ended Year
ended
30 June '24 30 June '23 31 Dec '23
£ £ £
Turnover - - -
Administration expenses (469,730) (496,660) (985,684)
Exceptional item 2 - (646,708) (646,708)
Operating Loss (469,730) (1,143,368) (1,632,391)
Finance Cost (44,924) (82,007) (138,162)
Finance Income - 57,472 56,131
Loss before taxation (514,654) (1,167,903) (1,714,423)
Tax on loss - - -
Loss for the financial period (514,654) (1,167,903) (1,714,423)
Foreign currency translation of foreign subsidiaries 2,681 (15,248) (7,514)
Total comprehensive loss for the financial period (511,973) (1,183,151) (1,721,937)
10 (0.010) (0.030) (0.037)
Earnings per share
Basic and diluted loss per share (pence per share)
Consolidated Statement of Financial Position
as at 30 June 2024
Unaudited Unaudited Audited
Notes 30 June '24 30 June '23 31 Dec '23
Assets £ £ £
Non-current assets
Exploration & evaluation assets 3 4,035,126 2,925,161 3,883,651
Property, plant and equipment 760 1,040
1,284
4,035,886 2,926,445 3,884,691
Current assets
Trade and other receivables 44,435 53,014 42,948
Cash and cash equivalents 4 113,582 1,268,202 620,924
158,017 1,321,216 663,872
Current liabilities
Convertible loan notes 7 - - -
Trade and other payables 5 (103,600) (87,274) (134,941)
(103,600) (87,274) (134,941)
Net current assets 54,417 1,233,942 528,931
Total assets less current liabilities 4,090,303 4,160,387 4,413,622
6 (921,305) - (732,651)
Non-current liabilities
Net assets 3,168,998 4,160,387 3,680,971
Equity & Liabilities
Shareholders' Equity
Called up share capital 9 499,609 498,592 499,609
Share premium account 9 5,367,516 5,349,710 5,367,516
Share option reserve 8 288,122 274,343 288,122
Other reserves (134,678) (161,445) (134,678)
Foreign exchange translation reserve (14,002) (24,417) (16,683)
Retained earnings (2,837,569) (1,776,396) (2,322,915)
Total Equity 3,168,998 4,160,387 3,680,971
Consolidated Statement of Cash flows
for the six months ended 30 June 2024
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June '24 30 June '23 31 Dec '23
£ £ £
Cash flows from operating activities
Loss for the period (514,654) (1,167,903) (1,714,423)
Adjustments for:
Depreciation 256 262 520
Impairment - - 153,732
Finance expense 44,924 82,007 138,162
Finance income - (57,484) (56,131)
Currency Translation 115,979 61,924 7,605
Share Option Expense - 45,594 45,594
(Increase)/decrease in trade and other receivables (1,487) 477,629 487,695
Decrease in trade and other payables (4,271) (572,530) (447,110)
Net cash used in operating activities (359,253) (1,130,501) (1,384,356)
Cash flows from investing activities
Acquisition of intangible exploration assets (168,107) (414,244) (1,321,053)
Proceeds from option agreement 14,424 - -
Net cash used in investing activities (153,683) (414,244) (1,321,053)
Cash flows from financing activities
Proceeds on the issue of share capital - 2,900,000 2,900,000
Proceeds on the issue of convertible loan notes - - 520,000
Share issue costs - (174,000) (174,000)
Interest paid - (16,250) (16,250)
Net cash from financing activities - 2,709,750 3,229,750
Net (decrease)/increase in cash and cash equivalents (512,936) 1,165,005 524,341
Cash and cash equivalents at start of period 620,924 96,985 96,985
Exchange losses on cash and cash equivalents 5,594 6,212 (402)
Cash and cash equivalents at end of period 113,582 1,268,202 620,924
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2024
Share Capital Share Premium Share Option Reserves Other Reserves Foreign exchange translation Reserve Retained Earnings Total Equity
Unaudited £ £ £ £ £ £ £
Balance at 1 Jan 2023 190,992 710,200 448,357 (161,445) (9,169) (658,031) 520,904
Loss for the financial period - - - - - (1,167,903) (1,167,903)
Foreign currency retranslation - - - - (15,248) - (15,267)
Total comprehensive loss for the period - - - - (15,248) (1,167,903) (1,183,170)
Transactions with owners
Issue of new shares 307,600 4,886,270 - - - - 5,193,870
Issue of options and warrants - - 274,343 - - - 274,343
Cancellation of options and warrants (448,357) - 49,539 (398,818)
Cost of shares issued - (246,760) - - - - (246,760)
Total transactions with owners 307,600 4,639,510 (174,014) - - 49,539 4,822,635
Balance at 30 June 2023 (unaudited) 498,592 5,349,710 274,343 (161,445) (24,417) (1,776,396) 4,160,385
Audited
Balance at 1 January 2023 190,992 710,200 448,357 (161,445) (9,169) (658,031) 520,904
Loss for the financial year - - - - - (1,714,423) (1,714,423)
Foreign currency retranslation - - - - (7,514) - (7,514)
Total comprehensive loss for the year - - - (7,514) (1,714,423) (1,721,937)
Transactions with owners
Issue of new shares 308,617 4,904,074 - - - - 5,212,691
Recognition of equity component of - - - 26,767 - - 26,767
convertible loan notes
Issue of options and warrants - - 288,122 - - - 288,122
Cancellation of options and warrants (448,357) - 49,539 (398,818)
Cost of shares issued - (246,758) - - - - (246,758)
Total transactions with owners 308,617 4,657,316 (160,235) 26,767 - 49,539 4,882,004
Balance at 31 December 2023 499,609 5,367,516 288,122 (134,678) (16,683) (2,322,915) 3,680,971
Unaudited
Balance at 1 Jan 2024 499,609 5,367,516 288,122 (134,678) (16,683) (2,322,915) 3,680,971
Loss for the period - - - - - (514,654) (514,654)
Foreign currency retranslation - - - - 2,681 - 2,681
Total comprehensive loss for the period - - - - 2,681 (514,654) (511,973)
Balance at 30 June 2024 (unaudited) 499,609 5,367,516 288,122 (134,678) (14,002) (2,837,569) 3,168,998
Notes to the interim financial information
for the six months ended 30 June 2024
1. Presentation of accounts and accounting policies
(a) Reporting Entity
Fulcrum Metals plc (the "Company") and its subsidiaries (together, the
"Group") explore for and develop mineral reserves in Canada.
The Company is a public limited company, incorporated, domiciled, and
registered in England and Wales. The registered number is 14409193. The
company's registered office and principal place of business is Unit 58,
Basepoint Business Centre Isidore Road, Bromsgrove Enterprise Park,
Bromsgrove, Worcestershire, B60 3ET, England.
(b) Basis of preparation
The interim financial statements of Fulcrum Metals Plc are unaudited
consolidated financial statements for the six months ended 30 June 2024 which
have been prepared in accordance with UK adopted international accounting
standards. They include unaudited comparatives for the six months ended 30
June 2023 together with audited comparatives for the year ended 31 December
2023.
The interim financial statements do not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The statutory accounts
for the year ended 31 December 2023 have been reported on by the company's
auditors and have been filed with the Registrar of Companies. The report of
the auditors is unqualified and contained a material uncertainty relating to
going concern. Aside from the material uncertainty relating to going concern
paragraph above, the auditor's report did not contain any statement under
section 498 of the Companies Act 2006.
The interim consolidated financial statements for the six months ended 30 June
2024 have been prepared on the basis of accounting policies expected to be
adopted for the year ended 31 December 2024. These are anticipated to be
consistent with those set out in the Group's latest financial statements for
the year ended 31 December 2023. These accounting policies are drawn up in
accordance with adopted International Accounting Standards ("IAS") and
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board.
(c) Basis of consolidation
The consolidated interim financial information includes the results of Fulcrum
Metals plc and its subsidiary undertakings. The financial statements of all
group companies are adjusted, where necessary, to ensure the use of consistent
accounting policies.
The Group was formed after the Company, prior to its IPO and listing on AIM,
completed a share for share transaction with Fulcrum Metals Limited. The Board
has taken the view that the most appropriate way to account for this in line
with IFRS is to deem the share for share exchange as a group reconstruction.
This has been accounted for under the basis of merger accounting given that
the ultimate ownership before and after the transaction remained the same.
There is currently no specific guidance on accounting for group
reconstructions such as this transaction under IFRSs. In the absence of
specific guidance, entities should select an appropriate accounting policy and
IFRS permits the consideration of pronouncements of other standard-setting
bodies. This group reconstruction as scoped out of IFRS 3 has therefore been
accounted for using predecessor accounting principles resulting in the
following practical effects;
(i) The net assets of the Company and the predecessor group, Fulcrum Metals
Limited and its subsidiary undertakings (the "Predecessor Group"), are
combined using existing book values, with adjustments made as necessary to
ensure that the same accounting policies are applied to the calculation of the
net assets of both entities;
(ii) No amount is recognised as consideration for goodwill or negative
goodwill;
(iii) The consolidated profit and loss account includes the profits or losses
of the company and the Predecessor Group for the entire period, regardless of
the date of the reconstruction, and the comparative amounts in the
consolidated financial statements are restated to the figures presented by the
Predecessor Group; and
(iv) The retained earnings reserve includes the cumulative results of the
Company and the Predecessor Group, regardless of the date of the
reconstruction, and the comparative amounts in the statement of financial
position are restated to those presented by the Predecessor Group.
(d) Significant accounting policies
The Group has presented below key extracts of its accounting policies.
(e) Intangible Assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it
determines that those assets will be successful in finding specific mineral
resources. Expenditure included in the initial measurement of exploration and
evaluation assets and which are classified as intangible assets, relate to the
acquisition of rights to explore, topographical, geological, geochemical and
geophysical studies, exploratory drilling, trenching, sampling and activities
to evaluate the technical feasibility and commercial viability of extracting a
mineral resource. Capitalisation of pre-production expenditure ceases when the
mining property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost. Exploration
and evaluation assets are assessed for impairment annually or when facts and
circumstances suggest that the carrying amount of an asset may exceed its
recoverable amount. The assessment is carried out by allocating exploration
and evaluation assets to cash generating units, which are based on specific
projects or geographical areas. IFRS 6 permits impairments of exploration and
evaluation expenditure to be reversed should the conditions which led to the
impairment improve. The Group continually monitors the position of the
projects capitalised and impaired.
Whenever the exploration for and evaluation of mineral resources in cash
generating units does not lead to the discovery of commercially viable
quantities of mineral resources and the Group has decided to discontinue such
activities of that unit, the associated expenditures are written off to the
Income Statement.
Impairment
Exploration and evaluation assets are reviewed regularly for indicators of
impairment and costs are written off where circumstances indicate that the
carrying value might not be recoverable. In such circumstances, the
exploration and evaluation asset is allocated to development and production
assets within the same cash generating unit and tested for impairment. Any
such impairment arising is recognised in the income statement for the period.
Where there are no development and production assets, the impaired costs of
exploration and evaluation are charged immediately to the income statement.
(f) Judgements and key sources of estimation uncertainty
The preparation of the Group Financial Statements in conformity with IFRSs
requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
expenses during the year. Actual results may vary from the estimates used to
produce these Financial Statements.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are
not limited to:
Impairment of exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 30 June 2024 of
£4,035,126 (30 June 2023: £2,925,161; 31 December 2023: £3,883,651). The
Group has a right to renew exploration permits and the asset is only
depreciated once extraction of the resource commences. Management tests
annually whether exploration projects have future economic value in accordance
with the accounting policy stated in Note (f). Each exploration project is
subject to an annual review by either a consultant or senior company geologist
to determine if the exploration results returned during the year warrant
further exploration expenditure and have the potential to result in an
economic discovery. This review takes into consideration the expected costs of
extraction, long term metal prices, anticipated resource volumes and supply
and demand outlook. In the event that a project does not represent an economic
exploration target and results indicate there is no additional upside, a
decision will be made to discontinue exploration. The directors concluded that
no impairment charge was required as of 30 June 2024.
Valuation of convertible loan notes
The Group's convertible loan notes are classified as compound financial
instruments as at 31 June 2024. Compound financial instruments require the
company to assess the fair value of their debt component with reference to
open market interest rates for comparable debt excluding any equity
components. This requires judgment as to the applicable open market interest
rates, the valuation is based on valuations performed at 31 December 2023
Valuation of warrants
The Group has made awards of warrants over its unissued share capital to
certain Directors and employees as part of their remuneration package. Certain
warrants have also been issued to shareholders as part of their subscription
for shares and to suppliers for various services received.
The valuation of these options and warrants involves making a number of
critical estimates relating to price volatility, future dividend yields,
expected life of the options and forfeiture rates. The valuation is based on
valuations performed at 31 December 2023.
2. Exceptional Items
These are legal and professional costs incurred relating to the Company's admission to AIM.
3. Exploration & Evaluation Assets
Intangible assets comprise acquisition, exploration and evaluation costs.
Exploration and evaluation assets are all internally generated. These are
measured at cost and have an indefinite asset life. Once the pre-production
phase has been entered into, the exploration and evaluation assets will cease
to be capitalised and commence amortisation.
Exploration & Evaluation Assets - Cost and Net Book Value
Mineral licence
Cost £
At 1 January 2023 675,419
Foreign exchange movement on opening balance (20,714)
Additions 2,293,653
At 30 June 2023 2,948,358
Amortisation
Impairment losses c/f 23,930
Foreign exchange on opening impairment balances (733)
At 30 June 2023 23,197
Carrying amount at 30 June 2023 2,925,161
Cost
At 1 January 2023 675,419
Additions 3,407,835
Foreign exchange movement on opening balance (22,746)
At 31 December 2023 4,060,508
Amortisation
At 1 January 2023 23,930
Impairment losses 153,732
Foreign exchange on opening impairment balances (805)
At 31 December 2023 176,857
Carrying amount at 31 December 2023 3,883,651
Cost
At 1 January 2024 4,060,508
Foreign exchange movement on opening balance (112,296)
Additions 258,828
At 30 June 2024 4,207,040
Amortisation
At 1 January 2024 176,857
Foreign exchange movement on opening balance (4,943)
At 30 June 2024 171,914
Carrying amount at 30 June 2024 4,035,126
Cost b/fwd Additions FX movement on cost b/fwd Total impairment Carrying amount
£ £ £ £ £
Jackfish Lake (Ontario) 310,371 742 (8,673) - 302,440
Dog Lake (Ontario) 90,988 1,313 (2,543) (44,223) 45,535
Syenite Lake (Ontario) 67,392 484 (1,883) - 65,993
Beavertrap (Ontario) 42,132 - (1,177) (40,955) -
Carib Creek (Ontario) 70,145 2,340 (1,960) - 70,525
Tocheri Lake (Ontario) 89,230 - (2,494) (86,736) -
Fontaine & Charlot Lake (Saskatchewan) 139,182 9,466 (3,890) - 144,758
Rongie Lake & Lost Lake (Ontario) 80,290 - (2,244) - 78,046
South & North Neely Lake (Saskatchewan) 181,714 9,837 (5,078) - 186,473
Tully Gold Project (Ontario) 557,053 4,333 (15,567) - 545,819
Charlot-Neely West (Saskatchewan) 3,868 - (108) - 3,760
South Pendleton (Saskatchewan) 5,945 904 (166) - 6,683
Snowbird (Saskatchewan) 28,945 12,802 (809) - 40,938
Teck-Hughes (Ontario) 222,158 64,643 (6,192) - 280,609
Big Bear (Ontario) 2,171,095 - (59,512) - 2,111,583
Sylvanite Tailings (Ontario) - 151,964 - - 151,964
4,060,508 258,828 (112,296) (171,914) 4,035,126
Following their assessment, the Directors concluded that no impairment charge
was required at 30 June 2024.
4. Cash and cash equivalents
30/06/2024 30/06/2023 31/12/2023
£ £ £
Cash at bank and in hand 113,582 1,268,202 620,924
All of the cash at bank is held with an institution with a AA-credit rating.
5. Creditors: amounts falling due within one year
30/06/2024 30/06/2023 31/12/2023
£ £ £
Trade creditors 51,003 43,522 48,237
Social security and other taxes 5,833 5,452 6,753
Deferred Consideration 14,424 - 35,612
Accruals 32,340 38,300 44,339
103,600 87,274 134,941
6. Creditors: amounts falling due over one year
30/06/2024 30/06/2023 31/12/2023
£ £ £
Convertible loan notes 564,303 - 519,380
Deferred consideration 357,002 - 213,271
921,305 - 732,651
The increase on the deferred consideration represents the option agreement to
acquire a 100% interest in Sylvanite Gold Tailings Project ("Sylvanite"),
located in Kirkland Lake, Ontario, Canada. Sylvanite, an ex-producing mine, is
strategically located 3km from Fulcrum's Teck-Hughes Gold Tailings project,
the Company's first tailings investment (see announcement released by the
Company on 30 November 2023) and significantly expands its footprint in the
Kirkland Lake Gold Camp, one of the most productive gold camps in Canada.
7. Convertible loan notes
The convertible loan notes (the "2021 CLNs") were issued by Fulcrum Metals
Limited ("FML") on 19 November 2021 at an issue price of £0.10 per note. The
notes were convertible into ordinary shares of FML at any time between the
date of issue of the notes and their settlement date. On 24 November 2022, the
2021 CLNs were converted into 2,339,829 shares at £0.10 per share.
On 5 July 2022, 28 September 2022, and 17 October 2022 FML issued CLNs to
investors to raise funds of £453,463 at a conversion price of 70% of IPO
share price (the "2022 CLNs").
On 8 February 2023, the 2022 CLNs issued by Fulcrum Metals Limited to
investors were cancelled and reissued in the name of Fulcrum Metals Plc, under
a deed of surrender and cancellation agreement entered into on 24 November
2022. Under this agreement the 2022 Loan notes were cancelled and, in their
place (and in consideration of the creation of an inter-company debt of
£453,463 owed by FML to Fulcrum Metals plc), Fulcrum Metals plc issued
£453,463 of new loan notes. Subsequently, in conjunction with the AIM IPO in
February 2023, the CLN holders exercised their right to convert the loan notes
to share capital under the loan note agreement.
On 6 August 2023, Fulcrum Metals PLC issued convertible loan notes (the "2023
CLNs) to investors to raise funds of £520,000 at an issue price of £1.00 per
note. The notes are convertible into ordinary shares of Fulcrum Metals PLC if
the trigger event conditions are met prior to the expiry date of 31 July 2025.
The trigger event conditions will be met if the VWAP exceeds 24p for five
consecutive business days. On the conversion date, the principal amount of the
Notes and all accrued but unpaid interest on such principal amount up to the
Conversion Date will convert into such number of new fully paid Ordinary
Shares, with the conversion price of 18.5p.
The net proceeds received from the issue of the convertible loan notes have
been split between the financial liability element and an equity component,
representing the fair value of the embedded option to convert the financial
liability into equity of the Company, as follows:
Convertible loan notes
30/06/2024 30/06/2023 31/12/2023
£ £ £
Opening Balance 520,000 - -
Proceeds of issue of convertible loan notes - - 520,000
Net proceeds from issue of convertible loan notes 520,000 - 520,000
Equity component 26,767 - 26,767
Amount classified as equity 26,767 - 26,767
Liability component at date of issue 1 January 2024 519,380 - 493,233
Interest charged 44,923 - 26,147
Liability component at period end 564,303 - 519,380
Liability component due within one year - - -
Liability component due over one year 564,303 - 519,380
Carrying amount of liability component at 30 June 2024 564,303 - 519,380
8. Share based payments
The fair value of the equity-settled warrants was determined by the Binomial
Option model, the parameters are defined below:
Equity-settled warrants
On 8 February 2023, 1,169,915 Investor Warrants and 119,649 Vendor Warrants
which were originally issued by Fulcrum Metals Limited were agreed to be
reissued as warrants in Fulcrum Metals Plc. The stock price at this date was
18.25p. These warrants have a two year exercise window from the Admission Date
(14 February 2023) and allow the holder to subscribe for ordinary shares in
the Company at an exercise price of £0.175 and £0.2625 respectively.
Warrants were issued to Panther Metals Plc (Panther A & Panther B
Warrants) as part consideration for the purchase of Big Bear.
Panther A warrants were issued with a maximum subscription price of £125,000
and exercise price at the placing price of £0.175. On this basis this
calculates a total of 714,286 warrants available. These are exercisable during
the period commencing on the date of Admission and ending on the second
anniversary of the date of submission.
Panther B warrants were also issued with a maximum subscription price of
£125,000 but with the exercise price set at 150% of the Placing Pricing
£0.2625. Accordingly, this second tranche constitutes a total of 476,190
warrants available, which are exercisable for a longer period up to the third
anniversary of the date of Admission.
In addition, on 8 February 2023, Allenby Capital and Clear Capital were issued
623,240 and 994,286 warrants respectively, both with an exercise price at the
placing price of £0.175. These warrants have a 3 year exercise window from
the date of admission
On 6 August 2023, Fulcrum Metals plc agreed to grant to Clear Capital a number
of warrants over new ordinary shares in the company 263,513 Ordinary Shares
(being 15% of £325,000), with a value of £48,750, exercisable at the warrant
holders option at any time in the 3 years following completion of the placing.
Schedule of equity-settled warrants
Exerciseprice £ Number of shares Expiry date of warrants Value per warrant £ Share option reserve at 30/06/2024
£
Investor Warrants 0.1750 1,169,915 14/02/2025 0.065 76,577
Vendor Warrants 0.2625 119,649 14/02/2025 0.045 5,430
Panther A - Vendor Warrants 0.1750 714,286 14/02/2025 0.065 46,754
Panther B - Vendor Warrants 0.2625 476,190 14/02/2026 0.057 27,250
Clear Capital Warrants 0.1750 994,286 14/02/2026 0.073 72,738
Allenby Capital Warrants 0.1750 623,240 14/02/2026 0.073 45,595
Clear Capital Warrants 263,513 06/08/2026 0.052 13,778
0.1850
Total Warrants
4,361,079 288,122
Weighted Average
Number of Weighted
Number of Warrants cancelled Warrants exercise price (£) average remaining life
Brought forward 1 January 2023 1,289,564 - 0.2062 1 year
Movement within the period ended 30 June 2023 4,367,566 1,289,564 - -
Brought forward 30 June 2023 4,367,566 - 0.1766 2.20 Years
Movement within the period 263,513 - - -
ended 30 December 2023
Brought forward 1 January 2024 4,361,079 - 0.1876 1.70 years
Granted within the period - - - -
ended 30 June 2024
Carried forward 30 June 2024 4,361,079 - 0.1876 1.20 years
9. Share capital
Issued, called up and fully paid
Number of Share Share
Ordinary Capital Premium Total
shares £ £ £
On incorporation 2 0 -
Share for share exchange 24 November 2022 19,099,230 190,992 710,200 901,192
Share issue on AIM listing 14 February 2023 16,571,429 165,714 2,734,286 2,900,00
Share issue upon exercise of CLNs 14 February 2023 3,602,411 36,024 405,271 441,295
Share issue as consideration for AIM listing fees 14 February 2023 42,857 429 7,072 7,501
Share issue as consideration for Acquisition 14 February 2023 9,971,839 99,719 1,645,353 1,745,072
Issue of shares as repayment of Director's Loans 14 February 2024 571,428 5,714 94,286 100,000
Transaction Costs - - (174,000) (174,000)
Broker and Nomad Warrants - - (72,758) (72,758)
At 30 June 2023 30,759,964 498,592 5,349,710 5,848,302
Issue of shares as finder's fee 17 August 2023 101,749 1,017 17,806 18,823
At 31 December 2023 49,960,943 499,609 5,367,516 5,867,125
At 30 June 2024 49,960,943 499,609 5,367,516 5,867,125
All shares hold the same voting and dividend rights.
On 10 October 2022, the Company was incorporated with two ordinary shares of
£0.01 each being issued.
On 24 November 2022, the owners of the entire issued share capital of FML (the
"Transferors") each entered into a Share Exchange Agreement with Fulcrum
Metals plc and FML, pursuant to which the Transferors transferred the FML
Shares held by each of them to Fulcrum Metals plc in return for consideration
of £901,191.83, which was satisfied by the issue and allotment of 19,099,228
Ordinary Shares in the capital in Fulcrum Metals plc to the Transferors
(credited as fully paid).
On 8 February 2023, the Company entered into an agreement with Clear Capital,
on an equity settlement basis, for the exchange of services. Per this
agreement the Company granted Clear Capital 994,286 warrants to subscribe for
994,286 Ordinary Shares at £0.175 per share.
On 8 February 2023, the Company entered into an agreement with Allenby
Capital, on an equity settlement basis, for the exchange of services. Per this
agreement the Company granted Allenby Capital 623,240 warrants to subscribe
for 623,240 Ordinary Shares at £0.175 per share.
On 14 February 2023, the Company completed a placing of 16,571,429 ordinary
shares at a price of
£0.175 per ordinary share raising a total of £2,900,000.
On 14 February 2023, the Company exercised the convertible loan notes by
completing a placing of 3,602,411 ordinary shares at a price of £0.1225 per
ordinary share.
On 14 February 2023, the Company announced it had issued 42,857 ordinary
shares at a price of
£0.175, credited as fully paid, as consideration for legal fees incurred in
the AIM listing process.
On 14 February 2023, the Company announced it had issued 9,971,839 ordinary
shares at a price of
£0.175, credited as fully paid, as consideration for 100% interest in and to
the mineral claims located in Ontario known as the Big Bear project and the
license pertaining to such claims.
On 14 February 2023, the Company announced it had issued 571,428 ordinary
shares at a price of
£0.175, credited as fully paid, as repayment of Director's Loans.
On 17 August 2023, the Company announced it had issued 101,749 ordinary shares
at a price of
£0.185, credited as fully paid, as consideration for finders' fees.
10. Earnings per share
Basic Earnings per share
30/06/2024 30/06/2023 31/12/2023
£ £ £
Basic Loss per share from continuing operations 0.010 0.030 0.037
The loss and weighted average number of shares used in the calculation of
basic loss per share are as follows:
30/06/2024 30/06/2023 31/12/2023
£ £ £
Loss for the year 514,654 1,167,903 1,714,423
No. No. No.
Weighted average number of ordinary shares in issue 49,960,943 42,106,169 46,052,455
There is no difference between diluted loss per share and basic loss per share
due to the loss position of the Group. Convertible loan notes and Warrants
could potentially dilute basic earnings per share in the future, but were not
included in the calculations of diluted earnings per share as they are
anti-dilutive for the periods presented.
11. Events after the end of the reporting period
On 2 July 2024, an option agreement was entered into for the sale of the
Saskatchewan Uranium Projects located in Saskatchewan, Canada to Terra
Balcanica Resources Corp ("Terra"). Under the terms of the agreement, and as
announced on 3 April 2024, Terra has the option to acquire 100% of Fulcrum's
Uranium Projects, consisting of the Charlot-Neely, Fontaine Lake, Snowbird
and South Pendleton projects by completing four years of exploration
programmes and making a series of cash and equity payments. On closing of the
agreement, Fulcrum has been issued a total of 1,997,151 common shares in Terra
(the "Initial Terra Consideration Shares") at a deemed issue price
of $0.125 per Terra share representing 4.49% per cent. of the issued share
capital of Terra. The Initial Terra Consideration Shares will be subject to a
hold period of four months from the date of issuance in accordance with
applicable securities laws in Canada. Thereafter Fulcrum has agreed to
orderly sales provisions with respect to the Initial Terra Consideration
Shares. In addition, and following the exercise of the option, Fulcrum will
retain 1 per cent. net smelter return ("NSR") royalty on all claims with a
buydown option of 0.5 per cent. NSR for CA$1 million.
Post period on 13 September 2024, Fulcrum announced successful equity
financing commitments of approximately £800,000 at 8p, including investor
subscriptions of approximately £643,500, conversion of supplier fees of
£42,000, proposed Director subscriptions of £89,761 and proposed conversion
of accrued Director salaries of £24,731. The proceeds will primarily be used
to accelerate testing and onsite evaluation programmes at the Teck-Hughes and
Sylvanite gold tailings projects and for the Group's working capital needs.
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