REG - Fulcrum Metals PLC - Unaudited interim results
30/06/2023 07:00
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RNS Number : 4535E Fulcrum Metals PLC 30 June 2023
30 June 2023
Fulcrum Metals plc
("Fulcrum" or "the Company")
Unaudited interim results for the six months to 31 March 2023
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 31 March 2023.
The Company also announces audited annual accounts for the year ended 31
December 2022 for FML and FMCL, wholly-owned subsidiaries of the Company,
which are appended to this announcement in Appendix I and will be available
shortly on the Company's website (www.fulcrummetals.com
(http://www.fulcrummetals.com) )
Fulcrum was incorporated in England and Wales on 10 October 2022 and is the
holding company of a mineral exploration group with base, precious and energy
metal projects in Canada. Fulcrum's ordinary shares were admitted to trading
on the AIM market of the London Stock Exchange on 14 February 2023 (the
"IPO"). The Fulcrum group consists of the Company, Fulcrum Metals Limited
(Ireland) ("FML"), Fulcrum Metals (Canada) Ltd ("FMCL"), and Fulcrum Metals 2
No 2 (Canada) Ltd ("FMC2L"), formerly the Big Bear SPV (Canada), (the
"Group").
To provide greater transparency, and as detailed in the Company's schedule one
notification published on 31 January 2023 prior to the IPO, these interim
results include comparative information for the year ended 31 December 2022
for the Group on a consolidated basis (for Fulcrum, FML and FMCL) and
comparative unaudited information for the six months to 31 March 2022.
Future reporting periods
The next reporting periods for Fulcrum will be the unaudited consolidated
interim results for the six months to 30 September 2023, being announced by
the 31 December 2023, and audited consolidated annual accounts for the year
ended 31 December 2023 announced by 30 June 2024.
Thereafter and going forward, interim results for the six months ending 30
June, will be published by the 30 September and final results for the year
ending 31 December will be announced by 30 June.
More information on the historical financial information for Fulcrum, FML and
FMCL can be found in the Company's admission document published on 8 February
2023 (the "Admission Document"), which is available on Fulcrum's website at
www.fulcrummetals.com .
Corporate and Operational Highlights
· Successful IPO on the AIM market of the London Stock Exchange on
14 February 2023
· £3 million raised as part of the IPO to advance its portfolio of
projects with a focus on its flagship Schreiber-Hemlo Project comprising of
Big Bear and the Jackfish Lake properties in Ontario, Canada
· Big Bear exploration results have confirmed prospectivity and
return high grade results of 45g/t Au, 37.4g/t Au and 33.6g/t Au
· Appointment of Prospectair Geosurveys ("Prospectair") to commence
airborne geophysical exploration at Big Bear and Tocheri Lake in Ontario,
Canada
· Schreiber-Hemlo satellite study identifies multiple structural
targets at Big Bear and Jackfish
· Cash in the bank as at 31 March 2023 of approximately £1.58
million
Ryan Mee, Chief Executive Officer of Fulcrum, commented: "Fulcrum has been one
of the few companies to successfully complete an initial public offering in
the UK market this year. We are grateful for the support of our new and
existing shareholders who shared our vision and see the potential of Fulcrum.
I believe that the diverse experience of our board, many of whom have a
history in investing in the mining sector, provides the company with a unique
understanding of what investors expect - a clear strategy, which is achievable
and importantly delivered in a timely fashion."
"Fulcrum has a highly prospective portfolio of projects in one of the most
attractive mining jurisdictions in the world and an aggressive growth
strategy. Looking ahead, we will continue to build on the success of our
exploration work at our flagship Schreiber-Hemlo project to increase the value
and ultimate commercialisation of the project."
Chairman's Statement
This is my first address to shareholders since Fulcrum completed its IPO
earlier this year and I am pleased to report that the Company has made
significant headways in delivering its stated exploration programme during the
period.
It has been a transformational period for the Company as it successfully
transitioned from being a private company to a quoted company trading on the
London Stock Exchange.
Fulcrum is a multi-commodity exploration company with six gold and base metal
projects in Ontario totalling 252 Km(2), covering the Schreiber-Hemlo, Wawa,
Winston Lake and Dayohessarah Greenstone Belts, and two uranium and gold
projects in the Northern Athabasca Basin region of Saskatchewan totalling
136Km(2). Its geographical focus and multi-commodity approach is aimed at
minimising the risk often associated with early-stage exploration projects,
with the Fraser Institute ranking Canada, as the second most attractive region
in the world for mining investment.
The main focus of Fulcrum is to advance, develop, and scale the flagship
Schreiber-Hemlo Project comprising the Big Bear and Jackfish Lake properties
where the Group has amassed a significant land position of circa 113 Km(2).
The properties have 38 recorded mineral occurrences, high grade gold in rock
samples and shear zones that have real potential for the discovery and
development of an economic mineral deposit.
Fulcrum's strategy is to increase the value of its projects with a focus on
discovery and commercialisation through targeted exploration programmes. I
am delighted to say that the team have been actively deploying funds raised on
IPO to enable the Company to start executing its stated strategy. An
airborne geophysical exploration programme at Big Bear and Tocheri Lake was
announced on 16 March 2023, following the appointment of Prospectair with
final data, modelling, and interpretation now expected in Q3 2023. Initial
exploration results at Big Bear confirmed the prospectivity of the project
with a total of 45 rock samples collected for assay and high gold grades
returned on a number of assays, including 45g/t Au, 37.4g/t Au and 33.6g/t
Au.
Looking ahead, we are continuing to advance our exploration across all our
projects and are particularly buoyant about the potential of Big Bear which we
plan to start drilling on later this year.
All and all, it has been a very successful start to Fulcrum's life as a quoted
company and the board looks forward to reporting on the Company's progress to
shareholders as it continues to advance exploration and increase our
understanding of our quality projects.
Clive Garston
Independent Non-Executive Chairman
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 31 March 2023
Unaudited Unaudited Unaudited
Notes 6 months ended 6 months ended Year ended
31 March '23 31 March '22 31 Dec '22
£ £ £
Turnover - - -
Administration expenses (382,985) (48,060) (254,340)
Operating Loss (382,985) (48,060) (254,340)
Exceptional item 2 (841,192) - (268,056)
Finance Cost (90,631) (12,353) (97,202)
Finance Income 126,736 5,512 -
Income Tax - - -
Loss for the financial period (1,188,072) (54,901) (619,598)
Other comprehensive income 1,342 258 9,169
Total comprehensive loss for the financial period (1,186,730) (54,643) (610,429)
Consolidated Statement of Financial Position
as at 31 March 2023
Unaudited Unaudited Unaudited
Notes 31 March '23 31 March '22 31 Dec '22
Assets £ £ £
Non-Current Assets
Intangible assets 3 2,785,456 264,212 651,489
Tangible assets 1,446 1,591
-
2,786,902 264,212 653,080
Current Assets
Trade and other receivables 216,799 530,642
7,064
Cash and cash equivalents 4 1,578,162 137,375 96,984
1,794,961 144,439 627,626
Total Assets 4,581,863 408,651 1,280,706
Equity & Liabilities
Shareholders' Equity
Share Capital 8 498,592 117,367 190,993
Share Premium 8 5,422,467 49,555 710,200
Currency Translation Reserves 1,342 (258) (9,169)
Share option reserves 7 84,002 134,320 448,356
Merger Reserve (161,446) - (161,446
Retained earnings (1,450,216) (65,836) (658,032)
Total Equity 4,394,741 235,148 520,901
Current Liabilities
Convertible loan notes 6 - 110,031 113,366
Trade and other payables 5 187,122 63,472 646,439
Total Liabilities 187,122 173,502 759,805
Total Equity and Liabilities 4,581,863 408,651 1,280,706
Consolidated Statement of Cash flows
for the six months ended 31 March 2023
Unaudited Unaudited Unaudited
6 months ended 6 months ended Year ended
Notes 31 March '23 31 March '22 31 Dec '22
£ £ £
Cash flows from operating activities
Loss for the period (1,188,072) (54,901) (619,598)
Adjustments for:
Depreciation 652 - 510
Impairment 23,464 - 23,007
Finance expense 90,631 12,353 97,202
Finance income (126,736) (5,512) -
Currency Translation (4,969) (8,535) (4,820)
Decrease / (Increase) in trade and other receivables 4,010 (8,478) (527,017)
Increase in trade and other payables 334,472 62,211 507,415
Net cash used in operating activities (866,548) (2,862) (523,301)
Cash flows from investing activities
Acquisition of property, plant and equipment (2,103) - (2,122)
Acquisition of intangible exploration assets (772,864) (264,212) (424,679)
Net cash from investing activities (774,967) (264,212) (426,801)
Cash flows from financing activities
Proceeds on the issue of share capital 3,055,151 166,837 338,010
Proceeds on the issue of convertible loan notes - 237,525 453,463
Director's loan (100,000) - 100,000
Net cash from financing activities 2,955,151 404,362 891,473
Net increase / (decrease) in cash and cash equivalents 1,313,636 137,288 (58,629)
Cash and cash equivalents at start of period 264,526 87 155,613
Cash and cash equivalents at end of period 1,578,162 137,375 96,984
Consolidated Statement of Changes in Equity
for the six months ended 31 March 2023
Share Capital Share Premium Share Option Reserves Other Reserves Retained Earnings Total Equity
Unaudited £ £ £ £ £ £
Balance at 1 October 2021 85 - - - (10,935) (10,850)
Loss for the financial period - - - (258) (54,901) (55,159)
Total comprehensive loss for the period - - - (258) (54,901) (55,159)
Issue of new shares 117,282 49,555 134,320 - - 301,157
Balance at 31 March 2022 (unaudited) 117,367 49,555 134,320 (258) (65,836) 235,148
Audited
Balance at 1 January 2022 116,580 49,223 133,420 871 (38,434) 261,660
Loss for the financial year - - - - (619,598) (619,598)
Fx Adjustment on opening retained earnings - - - (10,040) - (10,040)
Total comprehensive loss for the year - - - (10,040) (619,598) (629,638)
Issue of new shares 74,412 660,977 - - - 735,389
Recognition of equity component of convertible loan - 398,817 - - 398,817
notes
-
Exercise of convertible loan notes - - (248,198) - - (248,198)
Fair value movement - - 164,317 - - 164,317
Merger Reserve - - - (161,446) - (161,446)
Balance at 31 December 2022 190,993 710,199 448,356 (170,615) (658,032) 520,901
Unaudited
Balance at 1 October 2022 116,580 49,233 133,420 - (262,144) 37,089
Loss for the period - - - 1,342 (1,188,072) (1,186730)
Total comprehensive loss for the period - - - 1,342 (1,188,072) (1,186730)
Issue of new shares 382,012 5,547,234 84,002 - - 6,013,248
Share issue costs - (174,000) - - - (174,000)
Recognition of equity component of convertible loan notes - - 398,817 - - 398,817
Exercise of convertible loan notes 2021 - - (248,198) - - (248,198)
Fair value movement - - 164,317 - - 164,317
Exercise of convertible loan notes 2022 - - (448,356) - - (448,356)
Merger Reserve - - - (161,446) - (161,446)
Balance at 31 March 2023 (unaudited) 498,592 5,422,467 84,002 (160,104) (1,450,216) 4,394,741
Notes to the interim financial information
for the six months ended 31 March 2023
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.
These are the first consolidated financial statements of the Group following
the reorganization of the Group to
facilitate the listing. The result of the application of the capital
reorganization is to present the consolidated financial statements (including
comparatives) as if the Company has always owned the Group. The share capital
structure of the Company as at the date of the Group reorganization is pushed
back to the first date of the comparative period (10 October 2022). A Merger
Reserve is created as a separate component of equity, representing the
difference between the share capital of the Company at the date of the Group
reorganization and that of the previous top organisation of the Group.
(b) Basis of preparation
The financial statements have been prepared on the historical cost basis.
Where the carrying value of assets and liabilities are calculated on a
different basis, this is disclosed in the relevant accounting policy. The
accounting policies have been applied consistently to all financial periods
presented in the Consolidated Financial Statements.
The Group interim financial information has been prepared have been prepared
in accordance with International Financial Reporting Standards ("IFRS") and
their interpretations issued by the International Accounting Standards Board
("IASB") as adopted by the United Kingdom ("UK adopted IFRS") insofar as these
apply to interim financial information.
The financial information set out in this interim consolidated financial
information for the six months ended 31 March 2023, and its comparative
information for both the 6 months ended 31 March 2022 and year ended 31
December 2022, is unaudited. The financial information presented is not
statutory accounts and are prepared only to comply with AIM requirements for
interim reporting.
The UK adopted IFRS as applied by the Group in the preparation of these
financial statements are those that were effective on or before 31 March 2023.
(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;
(iv) 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;
(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) Going concern - basis of accounting
The Directors have prepared the financial statements on the going concern
basis which assumes that the Group and Company will continue in operational
existence for at least twelve months from the date of the approval of these
financial statements as described below.
The Group generated a (loss) for the financial period 31 March 2023
(£1,188,072)), net assets of £4,394,741 and a cash balance of £1,578,162
at the statement of financial position date.
In February 2023, Fulcrum Metals PLC completed the process of an IPO onto the
AIM market of the London Stock Exchange and raised £3.0 million in connection
with the admission of the company to fund the new Group and expect that
funding requirements will be met for a minimum of 12 months from the date of
this report.
Having considered the risks and uncertainties of the business, their
projections for the future performance of the Company, and the current
uncertain economic environment, the Directors have a reasonable expectation
that the Company has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the
financial statements.
Based on the above considerations and assessment, the Directors are satisfied
that no significant doubt exists on the company's ability to continue as a
going concern and adequate disclosure has been made in the financial
statements.
(f) 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.
(g) 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 31 March 2023 of
£2,785,456 (31 March 2022: £264,212) (31 December 2022: £651,488): refer to
Note 3 for more information. 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 (g).
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 an impairment charge of £23,930 was required as at
31 December 2022.
See Note 3 for the directors' assessment.
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.
2. Exceptional Items
These are costs incurred on the admission to AIM.
3. Intangible 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 October 2021 -
Additions 264,212
At 31 March 2022 264,212
At 1 January 2022 250,740
Additions 424,679
Impairment -23,930
At 31 December 2022 651,489
At 1 October 2022 257,066
Additions 2,552,320
Impairment -23,930
At 31 March 2023 2,785,456
To bolster the portfolio ahead of the intended listing the company agreed to
acquire the Big Bear exploration property in Ontario, Canada, from LSE listed
Panther Metals (LSE: PALM) dated 6 April 2022. The Big Bear property is an
extremely prospective high grade gold project with numerous mineral
occurrences of up to 0.71g/t in soils, rock chip samples of up to 105.5g/t and
with a high-quality Airborne survey covering the majority of the property
outlining 39 high priority geophysical anomalies for investigation. A
condition of the final execution of this agreement is that the company would
gain a listing on the AIM market in London by 31 October 2022 and upon listing
results in the payment of £200k cash to Panther Metals PLC and the issuance
of shares in a Fulcrum Metals listed entity so that Panther Metals hold 20% of
the total shares in issue.
The Big Bear project adjoins the existing Fulcrum fully owned Syenite Lake
project (acquired 21/03/21) which was further enlarged through the
acquisitions of 22 mining claims staked by Fulcrum Metals (Canada) Ltd on
07/04/22 and the adjoining Rongie Lake and Lost Lake projects from OnGold
Invest Corp effective 17 April 22.
The enlarged Big Bear project is just 14km west of the Jackfish Lake project
(under option pursuant to agreement dated 22/04/2021) which combined
establishes a significant high grade gold project footprint in the Western end
of the Schreiber - Hemlo greenstone belt covering approximately 113 square
kilometres.
The agreement was subsequently amended by an amended and restated agreement
entered into on 30 January 2023 in which PMCL agreed to sell to Fulcrum Metals
plc, the entire issued share capital in Panther Big Bear (Canada) Ltd ("Big
Bear SPV") which holds the entire registered and beneficial interest in and to
the mineral claims located in Ontario known as the Big Bear Project.
Effective 6 October 2022, the company expanded the Charlot Lake Uranium
project by acquiring, North Neely Lake, East Neely Lake, and West Neely Lake
properties totaling 2,076ha. North Neely Lake is a Uranium property with grab
samples up to 0.43% U308. East and West Neely Lake comprise the South Neely
Lake project area with grab samples up to 6.22% U308 and historic diamond
drilling report from a previous operator (T. Connors Diamond Drilling Co.,
1936) report shallow (<50m) mineralised intervals of up to 0.5m @ 42.9 g/t
gold. It has not been possible to verify the assays in this historic report,
although it is reported that the drill core remains on the property, and it is
possible that it may be in a condition which allows future verification.
The exploration projects are at an early stage of development and there are no
JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates
available to enable value in use calculations to be prepared. The Directors
therefore undertook an assessment of the following areas and circumstances
that could indicate the existence of impairment:
The Group's right to explore in an area has expired, or will expire in the
near future without renewal;
- No further exploration or evaluation is planned or
budgeted for;
- A decision has been taken by the Board to discontinue
exploration and evaluation in an area due to the absence of a commercial level
of reserves; or
- Sufficient data exists to indicate that the book value
will not be fully recovered from future
development and production.
Following their assessment, the Directors concluded that an impairment charge
of £23,930 was required at 31 December 2022 based on a decision after the
year end to drop a number of cells from both the Tocheri lake and Beavertrap
projects
4. Cash and cash equivalents
31/03/2023 31/03/2022 31/12/2022
£ £ £
Cash at bank and in hand 1,578,162 137,375 96,984
All of the cash at bank is held with institution with an AA-credit rating.
5. Creditors: amounts falling due within one year
31/03/2023 31/03/2022 31/12/2022
£ £ £
Convertible loan notes (see note 6) - 110,031 113,366
Trade creditors 105,169 33,798 139,501
Other creditors 33,335 29,674 150,399
Accruals 48,618 - 356,539
187,122 173,503 759,805
6. 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 is 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, following the IPO onto the AIM in
London, the CLN holders exercised their right to convert the loan notes to
share capital under the loan note agreement.
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
31/03/2023 31/03/2022 31/12/2022
£ £ £
Opening Balance - - 235,933
Convertible loan notes exercised (453,463) - (235,933)
Proceeds of issue of convertible loan notes 453,463 237,509 453,463
Transaction costs - - -
Net proceeds from issue of convertible loan notes - 237,509 453,463
Equity component - 127,479 398,817
Transaction costs relating to equity component - - -
Amount classified as equity - 121,479 398,817
Liability component - 110,031 113,336
Interest charged (using effective interest rate)
Carrying amount of liability component at 31 March 2023 - 110,031 113,366
7. 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
In February 2023, deeds of surrender and cancellation were entered into in by
each of the holders of the Investor Warrants and Vendor Warrants with Fulcrum
Metals Limited and Fulcrum Metals plc pursuant to which each of the 1,169,915
Investor Warrants and the 118,862 Vendor Warrants were cancelled and, in their
place, on 14(th) February 2023 Fulcrum Metals plc issued 1,169,915 New
Investor Warrants and New Vendor Warrants pursuant to a new investor warrant
instrument and a new vendor warrant instrument to subscribe for ordinary
shares in the capital of the Company.
In consideration for the purchase of Big Bear, Fulcrum Metals plc also agreed
to grant to PMCL: (i) a warrant to subscribe for Ordinary Shares in the amount
of £125,000, exercisable at the Placing Price during the period of two years
after Admission; and (ii) a warrant to subscribe for Ordinary Shares in the
amount of £125,000, exercisable at 150 per cent. of the Placing Price during
the period of three years after Admission.
2023
Granted on: 14/02/2023
Life (years) 2/3 years
Share price £ 0.14
Exercise price - investor £ 0.175
Exercise price - vendor £ 0.263
Number of warrants granted 2,480,040
Risk free rate 1.95%
Expected volatility 65%
Expected dividend yield 0%
Total fair value £84,002
The movement of warrants for the period to 31 March 2023 are shown below:
Weighted Average Exercise Price Number of Warrants Weighted average remaining life contracted
Investor warrants £0.175 1,169,915 2 year
Vendor warrants £0.263 119,649 2 year
Panther Vendor warrants £0.263 1,190,476 2/3 year
The total charge to the statement of comprehensive income for the period ended
31 March 2023 was £90,631 (31 March 2022: £12,353, 31 December 2022:
£97,202)
8. Share capital
31/03/2023 31/03/2022 31/12/2022
Authorised
100,000,000 ordinary shares at €0.01 each 100,000,000 100,000,000 100,000,000
Issued, called up and fully paid:
Number of Ordinary Share Capital Share Premium Total
Shares £ £ £
At 1 October 2021 - 85 85
-
Issue of new shares - 117,282 49,555 166,837
At 31 March 2022 117,367 49,555 166,922
-
At 1 January 2022 13,873,982 116,580 49,223 165,803
Issue of new shares 5,225,248 74,412 660,977 735,389
At 31 December 2022 190,993 710,199 901,192
19,099,230
At 1 October 2022 15,590,651 116,580 49,233 165,813
Issue of new shares 34,268,543 382,012 5,373,234 5,755,246
At 31 March 2023 49,859,194 498,592 5,422,467 5,921,059
All shares hold the same voting and dividend rights.
On 4 March 2022, the Company completed a placing of 291,667 new ordinary
shares of €0.01 at a price of €0.12 per ordinary share, raising gross
proceeds of £30,916.70 and increasing share capital by £2,916.
On 28 April 2022, the Company completed a placing of 600,000 new ordinary
shares of €0.01 at a price of €0.01 per ordinary share, raising gross
proceeds of £6,000 and increasing share capital by £6,000.
On 3 May 2022, the Company completed a placing of 791,668 new ordinary shares
of €0.01 at a price of €0.14 per ordinary share, raising gross proceeds of
£101,333.50 and increasing share capital by
£7,917.
On 11 May 2022, the Company completed a placing of 33,334 new ordinary shares
of €0.01 at a price of €0.12 per ordinary share, raising gross proceeds of
£3,533.40 and increasing share capital by £333.
On 6 October 2022, the Company completed a placing of 600,000 new ordinary
shares of £0.01 at a price of £0.128 per ordinary share, raising gross
proceeds of £76,800 and increasing share capital by
£6,000.
On 26 October 2022, the Company completed a placing of 568,750 new ordinary
shares of €0.01 at a price of €0.19 per ordinary share, raising gross
proceeds of £97,825 and increasing share capital by
£5,687.
On 24 November 2022, the Company exercised the convertible loan notes by
completing a placing of 2,339,829 new ordinary shares of €0.01 at a price of
€0.12 per ordinary share, raising gross proceeds of £235,933 and increasing
share capital by £23,398.
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 the Company in return for consideration of
£901,191.83, which was satisfied by the issue and allotment of 19,099,230
Ordinary Shares in the capital of the Company to the Transferors (credited as
fully paid).
In February 2023 following admission to AIM and the IPO listing, the company
completed a placing of 16,571,429 new ordinary shares of £0.01 at a price of
£0.175 per ordinary share, raising a gross proceeds of £2.9 million and
increasing share capital by £165,714.
Upon Aim listing additional shares of 614,285 ordinary shares of £0.01at a
price of £0.175 per ordinary share were also issued to the directors in
settlement of loan £100,000 and vendors £7,500 in lieu of services provided.
In consideration for the purchase of Big Bear, Fulcrum Metals plc also
allotted, on the closing date (immediately prior to Admission), 9,971,839
ordinary shares of £0.01 (20 per cent. of the total issued enlarged share
capital on Admission) at a price of £0.175 per ordinary share to Panther
Metals Canada Limited.
On 14 February 2023, the convertible loan note holders exercised their right
to convert the loan notes to 3,602,411 ordinary shares of £0.01 at a price of
£0.1225 per ordinary share.
9. Events after the end of the reporting period
On 17 April 2023, Fulcrum Metals Canada Limited ("FMCL"), the 100% owned
subsidiary of Fulcrum
Metals
Limited,
expanded the Winston Lake project acquiring the Carib Creek East property
consisting of 42 mining claims covering approximately 8.9 square kilometres.
Ryan Mee, Director of Fulcrum Metals Ltd and Chief Executive Officer of
Fulcrum Metals PLC sold the mining claims to the company. A
sedimentary-volcanic contact Zone has been mapped across the length of the
property exhibiting alteration reportedly similar to that of the high-grade
zinc-copper deposit at Winston Lake. Historic soil sampling at Carib Creek
East has previously returned anomalous copper values over an area of
approximately 2 square kilometres, with values ranging up to 1,100ppm copper.
Copper mineralisation has previously been discovered on the property in
quartz-carbonate veins, returning grab sample assays from 0.97% to 1.35%
copper, with separate veins containing semi-massive iron sulphides, however no
drilling was carried out.
The Directors are not aware of any events or circumstances arising which had
not been dealt with in this Report which may have a significant impact on the
Company.
APPENDIX I
Click here:
http://www.rns-pdf.londonstockexchange.com/rns/4535E_1-2023-6-29.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4535E_1-2023-6-29.pdf) for a
copy of the Audited Annual Accounts for the year ended 31 December 2022 for
FML and FMCL
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