REG - Fulcrum Metals PLC - Unaudited interim results
28/12/2023 07:00
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RNS Number : 9839X Fulcrum Metals PLC 28 December 2023
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. With the publication of this announcement,
this information is now considered to be in the public domain.
Fulcrum Metals plc / EPIC: FMET / Market: AIM / Sector: Mining
28 December 2023
Fulcrum Metals plc
("Fulcrum" or "the Company")
Unaudited interim results for the six month period ended 30 September 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 month period ended 30 September 2023.
Corporate and Operational Highlights:
· Extensive exploration programmes were conducted during the period
across the Group's Schreiber-Hemlo projects, Big Bear and Jack Fish. Initial
exploration results confirmed the prospectivity of the Big Bear project with
notable high-grade rock sample results of 45g/t Au, 37.4g/t Au and 33.6g/t Au.
· Acquisition of Carib Creek East in April 2023 has extended the
Winston Lake project and the Company's footprint across a highly prospective
mining area.
· Start of field operations at Schreiber-Hemlo designed to further
refine and evaluate previously identified targets.
· Completion of Big Bear phase two exploration finds 3km
mineralised corridor- four drill prospects have been identified with a further
five prospects needing further investigation.
· Acquisition of the Tully Gold project- with an established mine
camp, infrastructure, and historic gold resource of 107,000 ounces of gold,
Tully has become Fulcrum's most advanced project.
· Fundraising of £520,000 through the issue of unsecured
convertible loan notes to fund the acquisition of the Tully Gold project.
Post Period Highlights:
· Fulcrum has increased its Saskatchewan uranium footprint by
approximately 221% from 18,468 hectares (184.5km(2)) to 59,310 hectares
(593.1km(2))- the uranium projects now consist of the Charlot-Neely Lake,
Fontaine Lake, Snowbird and South Pendleton projects.
· The Company announced on 27 November 2023 that it was reviewing
its options with interested parties on its Saskatchewan uranium properties.
These options include, but are not limited to, the potential spin out of the
uranium properties.
· An option was entered into on 30 November 2023 giving Fulcrum the
opportunity to acquire 100% of Teck-Hughes Gold Tailings Project in Ontario,
Canada - the mine itself has historically milled 9,565,302 tons of ore and
produced 3,700,007 ounces of gold.
· Advanced discussions are taking place with Extrakt Process
Solutions, to licence its sustainable gold leaching technology, to be used at
Teck-Hughes gold tailings project. Teck-Hughes has the potential to become
Fulcrum's first cash generative project.
Ryan Mee, Chief Executive Officer of Fulcrum, commented:
"The Company's objective when it listed on AIM was to provide shareholder
value through the development of highly prospective mining projects alongside
complementary acquisitions."
"During the reporting period Fulcrum has moved at speed to discover and scale
our exploration assets across Canada, in particular in Ontario, with extensive
exploration programmes conducted at Big Bear and Jackfish. There have been
some notable results including rock samples of up to 45g/t Au and the
identification of multiple structural targets in the Schreiber-Hemlo area."
"We have also strengthened our portfolio of assets with several acquisitions:
the Tully Gold project, which has a historical resource of 107,000 ounces of
gold, and Carib Creek East. Post period, and on the back of ongoing positive
sentiment for uranium, we announced a 221% increase in our Saskatchewan
footprint, and the option to acquire the Teck-Hughes Gold Tailings Project in
Ontario. The latter is particularly exciting, with over 6 million tonnes of
tailings ready to be processed and with the use of innovative technology, the
Board believes it has the potential to become a cash generative asset in a
relatively short space of time."
Corporate and Operational Review
The Company's strategy is to focus on the discovery of economic deposits and
commercialisation of its projects using its three defined pillars: Explore,
Discover and Scale. During the reporting period Fulcrum has delivered on all
three pillars of its strategy.
Operationally, Fulcrum has continued to increase its understanding of its
highly prospective projects through targeted exploration programmes. In March
a successful exploration programme at the Big Bear property was announced,
yielding high grade results including 45g/t Au, 37.4g/t Au and 33.6g/t Au.
Also, in March it was announced that the Company had identified multiple
structural targets at the Big Bear and Jackfish properties.
Post period, the Company continued to advance its projects across Ontario and
Saskatchewan with airborne surveys at Big Bear and Tocheri lake, where a
further 250 geophysical anomalies were identified at the Big Bear project.
The Company's contacts in country, sector knowledge and ability to move
quickly enables it to capitalise on prospects that aren't always available
widely to others. There have been several opportunities during and post period
that have the potential to accelerate the Company's growth and make it cash
generative, particularly the option to acquire the Teck-Hughes Gold Tailings
Project ("Teck-Hughes") in Ontario, announced in November 2023, where
Extrakt's sustainable leaching technology, which does not use cyanide, can be
used to process historic tailings on site, estimated at approximately
6,531,300 tons of material at 0.66g/ton Au for 138,460 ounces contained Au.
Other acquisitions include the acquisition of Carib Creek East in April 2023,
which encompassed 42 claim cells covering 8.9km². In addition, and on the
back of positive investor sentiment for uranium, the Company has increased its
Saskatchewan uranium footprint by approximately 221% from 18,468 hectares
(184.5km2) to 59,310 hectares (593.1km2). Fulcrum's uranium projects consist
of Charlot-Neely Lake, Fontaine Lake, Snowbird and South Pendleton. The
Company has consistently increased its stake in the Charlot-Neely Lake
project. The first increase was announced in October 2023 with a subsequent
increase announced in November 2023. Fulcrum has expanded its stake in
Charlot-Neely Lake by c.215% from 7,625 hectares to 16,372 hectares.
Despite challenging market conditions, Fulcrum has continued to advance
existing projects whilst creating opportunities, via option agreements and
acquisitions, in highly prospective projects. The Board is excited about the
future of the Company and looks forward to updating the market on our progress
in due course.
Financial
The Company generated no revenue during the period but focussed on exploring
and developing assets that the Board believes will generate revenue for the
Company in the future.
For the six-month period ended 30 September 2023 the Company reported a
pre-tax loss of £434,473 (six months ended 30 September 2022: pre-tax loss of
£187,723).
The Company's net cash balance as at 30 September 2023 was £804,026 (30
September 2022: £239,082).
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 September 2023
Unaudited Unaudited Unaudited
Notes 6 months ended 6 months ended Year
ended
30 Sept '23 30 Sept '22 31 Dec '22
£ £ £
Turnover - - -
Administration expenses (354,065) (111,671) (254,340)
Operating Loss (354,065) (111,671) (254,340)
Exceptional item 2 - - (268,056)
Finance Cost (80,459) (76,052) (97,202)
Finance Income 51 - -
Loss before taxation (434,473) (187,723) (619,598)
Income Tax - - -
Loss for the financial period (434,473) (187,723) (619,598)
Other comprehensive income 17,959 7,395 9,169
Total comprehensive loss for the financial period (416,514) (180,328) (610,429)
Consolidated Statement of Financial Position
as at 30 September 2023
Unaudited Unaudited Unaudited
Notes 30 Sept '23 30 Sept '22 31 Dec '22
Assets £ £ £
Non-Current Assets
Intangible assets 3 3,778,339 437,876 651,489
Tangible assets 1,203 1,591
-
3,779,542 437,876 653,080
Current Assets
Trade and other receivables 60,827 183,995 530,644
Cash and cash equivalents 4 804,026 239,082 96,984
864,853 423,077 627,628
Total Assets 4,644,395 860,953 1,280,708
Equity & Liabilities
Shareholders' Equity
Share capital 8 499,609 132,441 190,993
Share premium 8 5,440,273 174,794 710,200
Currency translation reserve (16,617) (7,653) (9,169)
Share option reserve 7 186,298 269,054 448,356
Merger reserve (161,445) - (161,445)
Retained earnings (1,884,689) (253,560) (658,032)
Total Equity 4,063,429 315,076 520,903
Current Liabilities
Convertible loan notes 6 - 479,468 113,366
Trade and other payables 5 99,052 66,409 646,439
99,052 545,877 759,805
Non Current Liabilities
Convertible loan notes 6 481,914 - -
Total Liabilities 580,966 545,877 759,805
Total Equity and Liabilities 4,644,395 860,953 1,280,708
Consolidated Statement of Cash flows
for the six months ended 30 September 2023
Unaudited Unaudited Unaudited
6 months ended 6 months ended Year ended
Notes 30 Sept '23 30 Sept '22 31 Dec '22
£ £ £
Cash flows from operating activities
Loss for the period (434,473) (187,723) (619,598)
Adjustments for:
Depreciation 259 - 510
Impairment - - 23,007
Finance expense 64,209 76,052 97,202
Finance income - - -
Currency Translation (3,983) 41 (4,820)
Decrease / (Increase) in trade and other receivables 155,973 (176,931) (527,017)
Increase in trade and other payables (78,347) 2,937 507,415
Net cash used in operating activities (296,362) (285,624) (523,301)
Cash flows from investing activities
Acquisition of property, plant and equipment - - (2,122)
Acquisition of intangible exploration assets (997,773) (173,664) (424,679)
Net cash used in investing activities (997,773) (173,664) (426,801)
Cash flows from financing activities
Proceeds on the issue of share capital - 109,541 338,010
Proceeds on the issue of convertible loan notes 520,000 420,549 453,463
Director's loan - - 100,000
Proceeds Held on Account (CLN) - 30,905 -
Net cash from financing activities 520,000 560,995 891,473
Net (decrease)/increase in cash and cash equivalents (774,135) 101,707 (58,629)
Cash and cash equivalents at start of period 1,578,161 137,375 155,613
Cash and cash equivalents at end of period 804,026 239,082 96,984
Consolidated Statement of Changes in Equity
for the six months ended 30 Sept 2023
Share Capital Share Premium Share Option Reserves Other Reserves Retained Earnings Total Equity
Unaudited £ £ £ £ £ £
Balance at 1 April 2022 117,367 49,555 134,320 (258) (65,836) 235,148
Loss for the financial period - - - (7,395) (187,724) (195,119)
Total comprehensive loss for the period - - - (7,395) (187,724) (195,119)
Issue of new shares 15,073 125,239 - - 140,312
Fair value movement 134,734 134,734
15,073 125,239 134,734 - - 275,046
Balance at 30 Sept 2022 (unaudited) 132,441 174,794 269,054 (7,653) (253,560) 315,076
Unaudited
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 74,413 660,977 - - - 735,390
Recognition of equity component of - - 398,817 - - 398,817
convertible loan notes
Exercise of convertible loan notes - - (248,198) - - (248,198)
Fair value movement on warrants - - 97,202 - - 164,317
Fair value movement on CLNs 67,115
Merger Reserve - - - (161,445) - (161,445)
74,413 660,997 314,936 (161,445) - 888,879
Balance at 31 December 2022 190,993 710,200 448,356 (170,614) (658,032) 520,903
Unaudited
Balance at 1 April 2023 498,592 5,422,467 84,002 (160,103) (1,450,216) 4,394,742
Loss for the period - - - (17,959) (434,473) (452,432)
Total comprehensive loss for the period - - - (17,959) (434,473) (452,432)
Issue of new shares 1,017 17,806 - - - 18,823
Recognition of equity component of convertible loan notes - - 53,546 - - 53,546
Equity
Fair value movement - - 48,750 - - 48,750
1,017 17,806 102,296 - - 121,119
Balance at 30 Sept 2023 (unaudited) 499,609 5,440,273 186,298 (178,062) (1,884,689) 4,063,429
Notes to the interim financial information
for the six months ended 30 September 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 second consolidated interim financial statements of the Group
following the reorganisation of the Group to facilitate the listing on the AIM
market of the London Stock Exchange plc. The result of the application of the
capital reorganisation 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
reorganisation 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 reorganisation 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 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 30 September 2023, and its comparative
information for both the 6 months ended 30 September 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 30 September
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;
(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) 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 incurred a total comprehensive loss for the financial period 30
September 2023 of £416,514 and held net assets of £4,063,429 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.
In August 2023 the Company raised £520,000 by the issue of convertible loan
notes and at 30 September 2023 has a cash balance of £804,026.
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. The board anticipates that additional funding will
be required during 2024 to further its exploration projects and increase
shareholder value. Accordingly, they continue to adopt the going concern basis
in preparing the interim 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 30 September 2023 of
£3,778,339 (30 September 2022: £437,876) (31 December 2022: £651,489):
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 (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
at 30 September 2023.
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 legal and professional costs incurred relating to the Company's 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 April 2022 264,212
Additions 173,664
At 30 Sept 2022 437,876
At 1 January 2022 250,739
Additions 424,680
Impairment (23,930)
At 31 December 2022 651,489
At 1 April 2023 2,785,710
Fx movement on opening balance (4,890)
Additions 997,773
Impairment -
At 30 September 2023 3,778,339
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 for CA $2,100. 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.
On 6 August 2023, Fulcrum Metals PLC, entered into a mineral claim purchase
agreement made between the Company, its wholly owned subsidiary Fulcrum Metals
Canada Limited ("FMCL"), and TSX-listed 1911 Gold Corp ("1911") to acquire a
100% interest in Tully Gold Project located in Timmins, Ontario. Under the
terms of the Agreement, FMCL purchased all legal and beneficial interest from
Tully for a purchase price of CAD800,000 cash (the "Cash Purchase Price"),
plus a 1.5% net smelter return royalty (the "NSR Royalty") in 1911's favour.
The consent from the Ministry of Mines for the transfer of the mining leases
was obtained on 22 September 2023 and the escrowed amount of CAD100,000 was
then paid across to 1911. Fulcrum Metals PLC raised £325,000 by the issue
of unsecured convertible loan notes (the "Loan Notes") to new and existing
shareholders (the "Subscribers"), and, in addition, certain directors of the
Company subscribed for £195,000 of Loan Notes (the "Fundraising").
Following the subscriptions for Loan Notes by such directors of the Company,
the gross proceeds of the Fundraising was £520,000. The net proceeds from
the Fundraising were used by the Company to satisfy the consideration due
under the Purchase Agreement, costs and for working capital needs.
During September 2023 as part of the pre-drilling activities at the Tully
Gold project the Company undertook site visits to the Tully project area and
to the sites that host historic paper records, reject samples, pulp samples
and drill core. The objective was to confirm the condition of key access
points to the Tully project site and to establish location and accessibility
of historic drill core/samples for further test work ahead of the proposed
drilling programme this winter.
Following the site visits, the pre-drilling activities have now commenced
which includes comprehensive data reviews, 3D targeting, further site visits,
establishment of potential new collar locations, reviewing historic drill
holes and re-sampling of drill core/reject material before finalising the
drilling programme.
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 no impairment charge
was required at 30 September 2023.
4. Cash and cash equivalents
30/09/2023 30/09/2022 31/12/2022
£ £ £
Cash at bank and in hand 804,026 239,082 96,984
All of the cash at bank is held with an institution with a AA-credit rating.
5. Creditors: amounts falling due within one year
30/09/2023 30/09/2022 31/12/2022
£ £ £
Trade creditors 34,251 27,186 139,501
Other creditors 7,239 32,159 150,399
Accruals 57,562 7,064 356,539
99,052 66,409 646,439
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 that was 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 re-issued 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.
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 FM 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 (Volume Weighted Average
Price) exceeding 24p for five consecutive Dealing 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
30/09/2023 30/09/2022 31/12/2022
£ £ £
Opening Balance - 237,509 235,933
Convertible loan notes exercised (235,933)
Proceeds of issue of convertible loan notes 520,000 420,549 453,463
Net proceeds from issue of convertible loan notes 520,000 658,058 453,463
Equity component 53,546 241,756 398,817
Amount classified as equity 53,546 241,756 398,817
Liability component due within one year - 479,468 113,366
Liability component due over one year 481,914 - -
Carrying amount of liability component at 30 September 2023 481,914 479,468 113,366
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 119,649 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 granted 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. A total of 1,190,476 warrants were
granted to PMCL.
2023 2023 2023
Granted on: 14/02/2023 14/02/2023 14/02/2023
Life (years) 2 years 3 years 2 years
Share price £ 0.14 £ 0.14 £ 0.14
Exercise price - investor - - £ 0.175
Exercise price - vendor £ 0.175 £ 0.2625 £ 0.263
Total number of warrants granted 714,286 476,190 1,289,564
Risk free rate 1.95% 1.95% 1.95%
Expected volatility 65% 65% 65%
Expected dividend yield 0% 0% 0%
Total fair value £20,630 £13,753 £49,619
On 6 August 2023, Fulcrum Metals plc agreed to grant to Clear Capital a total
of 263,513 warrants over new ordinary shares in the Company (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.
The movement of warrants for the period ended 30 September 2023 is shown
below:
Weighted Average Exercise Price Number of Warrants Weighted average remaining life contracted
Clear Capital Vendor warrants £0.263 263,513 3 years
The total charge to the statement of changes in equity for the period ended 30
September 2023 was £48,750 (30 September 2022: £134,734, 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 April 2022 - 166,922
117,367 49,555
Issue of new shares - 15,074 125,239 140,312
At 30 September 2022 132,441 174,974 307,234
-
At 1 January 2022 13,873,982 116,580 49,223 165,803
Issue of new shares 5,225,248 74,413 660,977 735,390
At 31 December 2022 190,993 710,200 901,193
19,099,230
At 1 April 2023 49,859,194 498,592 5,921,059
5,422,467
Issue of new shares 101,749 1,017 17,806 18,823
At 30 September 2023 49,960,943 499,609 5,440,273 5,939,882
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 gross proceeds of £2.9 million and
increasing share capital by £165,714.
Upon the AIM listing additional shares of 614,285 ordinary shares of £0.01 at
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.
On 15 August 2023, Fulcrum Metals PLC issued 101,749 Ordinary Shares of £0.01
at a price of £0.185 per ordinary share in part settlement of the finder's
fee owed to the introducer of the Tully Project.
9. Events after the end of the reporting period
In October 2023, Fulcrum Metals Canada Limited ("FMCL"), extended the
Charlot-Neely Lake Uranium project by the staking of three new claim blocks
totalling 4,856 hectares (48.56km(2)) (the "Claim Cells") contiguous to and
extending the Company's Charlot - Neely Lake uranium-gold project
("Charlot-Neely" or the "Project") in northern Saskatchewan to 12,481
hectares (124.81km(2)) - a 63% increase.
In November 2023, Fulcrum Metals Canada Limited ("FMCL"), entered into an
option agreement to acquire 11,480 hectares across three Uranium properties at
Snowbird, South Pendleton and Charlot West from independent local
prospectors, in addition to staking of a new mining claim totalling 2,703
hectares extending the Charlot-Neely Uranium project.
Fulcrum paid the vendors CA$5,000 in cash as consideration for the option to
acquire 100% of the properties, and, should the option be exercised, will pay
a further CA$60,000 either in cash or in equity in Fulcrum Metals or a new
uranium vehicle to be listed on another recognised exchange. In the event that
the CA$60,000 is settled through the issue of new ordinary shares in Fulcrum
Metals 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. The option
agreements have a close date of 30 June 2024.
Should the option be exercised and Fulcrum acquire a 100% interest in the
properties under option, the vendors shall retain a royalty of 2% of the net
smelter returns on three of the mining claims (MC00017090, MC00017453 and
MC00017455) subject to the option agreement. Fulcrum have the right to buy
back half of the net smelter royalty for CA$1,000,000 at any time.
Fulcrum is reviewing its options with interested parties with regards to its
uranium properties in Saskatchewan. These options include, but are not
limited to, a potential spin out of the Saskatchewan assets as a separate
business listed on a recognised exchange and other partnerships. Discussions
remain at an early stage and further details will be announced at the
appropriate time.
In November 2023, Fulcrum Metals Canada Limited ("FMCL"), entered into an
option agreement to acquire the Teck Hughes Gold Tailings project, Kirkland
Lake, Ontario. In consideration for the grant of the option Fulcrum shall make
payments of CA$15,000 within 10 business days of signing the Mining Option
Agreement, CA$25,000 within 10 business days upon receipt by Fulcrum of a
mineral recovery permit from the Ministry of Mines in Ontario, CA$250,000 on
or before the first agreement anniversary date of the Mining Option Agreement
and CA$250,000 on or before the anniversary date of the Mining Option
Agreement.
Should the option be exercised, and Fulcrum acquire a 100% interest in the
properties under option, Fulcrum will grant the vendors a 3% net smelter
royalty. Fulcrum has an option to purchase 1.5% of the net smelter royalty
(thereby reducing the net smelter royalty payable to the Options from 3% to
1.5%) for CA$1,500,000 with an additional option to purchase a further 0,5% of
the original NSR Royalty (thereby reducing the net smelter royalty payable to
Optioners from 1.5% to 1.0%) for a further CA$1,000,000 at any time or from
time to time, after the net smelter royalty has been granted.
In parallel with the Mining Option Agreement, Fulcrum 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.
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.
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