REG - Fulcrum Metals PLC - Option to Acquire Gold Tailings Project

Fulcrum MetalsAnnouncement

30/11/2023 07:15

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RNS Number : 1393V  Fulcrum Metals PLC  30 November 2023

30 November 2023

 

Fulcrum Metals plc

("Fulcrum" or the "Company" or the "Group")

 

Option to Acquire Teck-Hughes Gold Tailings Project

 

 Enters Advanced Discussions with Extrakt to Licence its Sustainable Gold
Leaching Technology

 

Fulcrum Metals plc (LON: FMET), a company focused on mineral exploration and
development in Canada, is pleased to announce that its wholly owned subsidiary
Fulcrum Metals (Canada) Ltd ("FMCL") has entered into an option agreement
("the Mining Option Agreement") to acquire a 100% interest in the Teck Hughes
Gold Tailings project ("Teck-Hughes"), located in Kirkland Lake, Ontario,
Canada.

 

In addition, the Company also announces that, in parallel with the Mining
Option Agreement, it is in advanced discussions with Extrakt Process Solutions
("Extrakt"), regarding the licensing of its proprietary technology.  Extrakt
is a sustainable technology company using separation technology to extract
metals from tailings without the use of cyanide.

 

Highlights

 

·    Option to acquire 100% of the Teck-Hughes Gold Tailings Project - the
mine itself has historically milled 9,565,302 tons of ore and produced
3,700,007 ounces of gold.

·    Historic sampling and auger drilling campaigns were conducted at the
project, the first in 1980 and the most recent between 2018 and 2022 which
produced a non-complaint resource estimation.

o  As part of the most recent campaign a total of 95 auger samples were
collected and assayed at Actlabs in Timmins. The highest sample assayed
1.23g/ton Au with 72 of the 95 samples assaying between 0.5 to 0.8 g/t Au, the
average being 0.66g/ton Au.

o  Based on the data from this sampling along with that of the drill program
from 1980 an estimate of the tonnage was calculated over the north, west and
northeast arm of the tailings totalling 6,531,300 tons of material at
0.66g/ton Au for 138,460 ounces contained Au.

·    The Company is in advanced discussions with Extrakt for the use of
its proven non-cyanide gold leaching tailings extraction technology.

·    Testing of tailing material from Teck-Hughes, using Extrakt's
technology, is scheduled for Q1 2024.

·    This represents an opportunity for Fulcrum to utilise proven tailings
extraction technology with the potential to deliver a cash generative metals
project.

 

Ryan Mee, Chief Executive Office of Fulcrum Metals plc, commented:

 

"This is a very exciting development at Fulcrum and an excellent opportunity
for shareholders to gain exposure to a project that has the potential to be
generating cashflow in the future, without the precursor mining stage saving
not only time but capital.

 

"Our strategic structuring of the tailings project agreement allows Fulcrum to
conduct the necessary pre-production work without the upfront commitment of
the acquisition cost, which based on the non-compliant resource calculations
of 121,700 ounces of gold equates to less than USD$3.30 per ounce of gold.

 

"We are also excited about our discussions with Extrakt, whose technology has
the potential to have a significant impact on the metals industry.
Importantly, the non-use of cyanide makes is pivotal from an operational cost
perspective, and even more importantly from an environmental perspective. We
look forward to providing shareholders on our progress at Teck-Hughes in due
course".

 

The Teck-Hughes Gold Tailings project is located approximately 1.5 kilometres
northwest of the town of Kirkland Lake (figure 1) consisting of 7 mining
claims (112 hectares) with non-compliant 43-101 resource calculations of up to
138,460 ounces of gold associated with the historic Teck Hughes gold mine in
the Kirkland Lake camp.

 

Fulcrum Metals is also in discussions with Extrakt to licence efficient and
sustainable, separation technology to enhance recoveries of precious metals
and dewater the tailings after the process. Fulcrum will update its project
process once all sides have finalised the scopes and executed the necessary
agreements. William Florman, the CEO of Extrakt, confirmed that the material
testing from one of Fulcrum's sites is targeted to be conducted in Q1 2024.

Summary of Acquisition Terms

 

Mining Option Agreement

Under the terms of the Mining Option Agreement, John Der Weduwen, Larry
Gervais and Steve Polson (the "Optionors") grants Fulcrum (the "Optionee") an
option to acquire a 100% interest in the Teck-Hughes Tailings Project. In
consideration for the grant of the option Fulcrum shall make payments to the
Optionors as follows:

 

·    CDN$15,000 within 10 business days of signing the Mining Option
Agreement;

·    CDN$25,000 within 10 business days upon the receipt by Fulcrum of a
mineral recovery permit from the Ministry of Mines in Ontario;

·    CDN$250,000 on or before the first anniversary date of the Mining
Option Agreement;

·    CDN$250,000 on or before the second anniversary date of the Mining
Option Agreement; and

·    the granting of a 3% Net Smelter Return (the "NSR Royalty").

 

Once the payments above have been made, which at Fulcrum's discretion can be
made in full prior to the stated dates, Fulcrum may exercise the option to
acquire a 100% interest in the Teck-Hughes Tailings Project.

 

Fulcrum also has the right to terminate the Mining Option Agreement by giving
30 days notice at any time and as such would not be required to make any
further payment.

 

Buy Back of Royalty

In addition, FMCL has an option to purchase 1.5% of the NSR Royalty (thereby
reducing the NSR Royalty rate payable to the Optionors from 3% to 1.5%) for
CAD1,500,000, with an additional option to purchase a further 0.5% of the
original NSR Royalty (thereby reducing the NSR Royalty rate payable to the
Optionors from 1.5% to 1.0%) for a further CAD$1,000,000 at any time or from
time to time, after the NSR Royalty has been granted.

 

Finder's fee agreement

The Company has also entered into a finder's fee agreement in relation to the
acquisition whereby the Company will pay the introducer of the Project a
finder's fee of CDN$20,000 in stages of CDN$1,000 upon execution of the Mining
Option Agreement, CDN$9,000 payable on payment of the first anniversary option
amount and CDN$10,000 payable on payment of the second anniversary option
amount. The Company has elected to make the first payment instalment in cash
but may elect to pay either in cash or shares in Fulcrum for the remaining
payments. In the event that the remaining payments are settled through new
ordinary shares in Fulcrum  this would be at a price per share based on the
ten-day volume weighted average price of shares in Fulcrum Metals prior to
exercise.

 

Background on the Teck-Hughes Tailing Project

 

The Teck-Hughes Gold Mine milled 9,565,302 tons of ore and produced 3,700,007
ounces of gold during its 51 years of operation from March 1917 to January
1968. The tailings from the milling operation were pumped approximately 2100
metres north into Lost Lake and were later held with wooden dams when the lake
was filled to overflowing capacity.

 

In August of 1980 a nine-hole drill program was conducted by Douglas Parent on
behalf of Rene Paiement and associates. The drill holes were centred at
500-foot intervals along a line which ran NNE from the southwest corner of the
tailings to the north central portion.

 

The nine holes returned an average grade of 0.63g/ton Au. The grades were
higher in the south and steadily decreased to the north. Mr. Parent suggested
the lower grades in the north were due to leaching. It is more likely that the
older tailings were deposited in the nearest shore of the lake, hence the
higher grades to the south.

 

In July of 1985 C. Von Hessert commissioned a drill program on five tailings
areas in the Kirkland Lake District, one being the Teck-Hughes with drill
centres spaced ranging from 400 to 600 feet. Based on these results it was
roughly estimated that the Teck-Hughes Tailings project may contain
approximately 6,212,000 tons of material grading 0.62 g/ton Au for 121,700
contained gold ounces.

 

In 2018 and 2019 a total of 85 surface auger samples were taken by Jon Van Der
Weduwen. The samples were taken at 50-metre stations along 100-metre line
spacing. The samples covered most of the tailings surface except for the
extreme NE portion. The average grade of these surface samples was .60g/ton
Au.

 

In 2022 John Van Der Weduwen completed seventeen augur drill holes totalling
108.4 metres ranging in depth from 3.6m to 9.2m, although several holes did
not reach the bottom of the tailings due to the collapse of walls of the
holes. The holes were centred at stations of a previously established
north-south UTM grid where the lines were spaced 100m and stations at 50m. All
holes were drilled vertically and sampling starting at the 1-2 metre depth
with sampling every metre to depth (data for the first metre was collected
during earlier work).

 

A total of 95 auger samples were collected and assayed at Actlabs in Timmins.
The highest sample assayed 1.23g/ton Au with 72 of the 95 samples assaying
between 0.5 to 0.8 g/t Au, the average being 0.66g/ton Au. There were no
marked anomalies at the lower extent of the holes where the older tailings
would be. Based on the data from this sampling along with that of the drill
program from 1980 an estimate of the tonnage was calculated over the north,
west and northeast arm of the tailings totalling 6,531,300 tons of material at
0.66g/ton Au for 138,460 ounces contained Au.

 

The various historic non-compliant resource estimates cited above have not
been verified by Fulcrum and the tailings body requires detailed follow-up
sampling along with appropriate QAQC and estimation by an independent
qualified resource geologist in order to be able to report a resource
compliant with established resource codes.

 

Figure 1 - property location

 

 

References

i)             Twenty eighth annual report of the Ontario Bureau
of Mines, 1919 p. 120-121, Teck Hughes Gold Mines.

ii)            Seventy eighth annual report on mining operations in
Ontario, 1968 p. 33-34, Teck Hughes annual report.

iii)           OAFD Assessment record 42A0 1 NE0 194, Report on
sampling program completed on the Teck Hughes tailings deposit.

iv)           OAFD Assessment record 32D04NW0806, Appendix B,
Calculation of tailings reserves in the Kirkland Lake Area.

 

 

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.

 -Ends-

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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