REG - First Class Metals - Audited Annual Results for Year Ended 31 Dec 2023
14/06/2024 07:00
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RNS Number : 4065S First Class Metals PLC 14 June 2024
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
FIRST CLASS METALS PLC
14 June 2024
Audited Annual Results for Year Ended 31 December 2023
First Class Metals PLC ("First Class Metals" "FCM" or the "Company") the UK
listed metals exploration company seeking economic metal discoveries across
its extensive Canadian, focused in northern Ontario land holdings is pleased
to announce its audited annual results for the year ended 31 December 2023.
The Annual Report and Financial Statements for the year ended 31 December 2023
will shortly be available on the Company's website at
www.firstclassmetalsplc.com (http://www.firstclassmetalsplc.com) . A copy of
the Annual Report and Financial Statements will also be uploaded to the
National Storage Mechanism where it will be available for viewing at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
For further information, please contact:
James Knowles, Executive Chairman JamesK@Firstclassmetalsplc.com (mailto:JamesK@Firstclassmetalsplc.com) 07488 362641
Marc J Sale, CEO MarcS@Firstclassmetalsplc.com (mailto:MarcS@Firstclassmetalsplc.com) 07711 093532
Novum Securities Limited
(Financial Adviser)
David Coffman/ George Duxberry www.novumsecurities.com (0)20 7399 9400
Consolidated Annual Report and Financial Statements
FIRST CLASS METALS Plc
For the Year Ended 31 December 2023
(Company Number: 13158545)
13 June 2024
First Class Metals Plc
Company Information
Directors Marc Sale - CEO
James Knowles - Executive Chairman
Ayub Bodi - Executive Director (resigned on 2 February 2024)
Andrew Williamson NED
(appointed on 15 October 2023)
Marc Bamber - NED
Danesh Varma - NED
(resigned 15 October 2023)
Company Secretary Siddharth Muricken
Registered Office Suite 16
Freckleton Business Centre Freckleton Street
Blackburn
BB2 2AL
Financial Advisors Novum Securities
2(nd) Floor
7-10 Chandos Street
London
W1G 9DQ
Auditor Royce Peeling Green Limited
The Copper Room
Deva City Office Park
Trinity Way
Manchester
M3 7BG
Corporate Lawyers to the Company OBH Partners
17 Pembroke Street Upper
Dublin2
Ireland
D02 AT22
Lawyers to the Company as to Canadian Law Peterson McVicar
18 King Street East
Suite 902
Toronto
Ontario
M5C 1C4
Canada
Registrars Share Registrars Limited
Molex House
Millennium Centre
Farnham
Surrey
GU9 7XX
Company Website www
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firstclassmetalsplc
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HIGHLIGHTS
A summary of the company's highlights for the year 2023 follows:
Corporate
· 26th June 2023 - The Company raised £1,049,170 raised via an
oversubscribed placing, subscription, and warrant conversion through the
issuing of 9,974,000 shares (placing & subscription) and 375,000 shares
warrant conversion all at 10p per share.
· 16th October 2023 - The Company appointed of Andrew Williamson as a
Non-Executive Director.
· 24th November 2023 - The Company raised £603,000 via a placing
through a directors share loan of 11,990,665 shares at 6p per share.
Exploration and Operations
· The Company obtained 6 exploration Permits granted on its North
Hemlo, Sunbeam, Zigzag, Esa McKellar and Enable properties.
· The Company signed agreement with four First Nations being: Whitesand
First Nation, Lac Des Mille Lac First Nation, Lac La Croix First Nation, and
Netmizaaggamig Nishnaabeg First Nation.
· There was confirmation of 19g/t gold assays at the North Hemlo
property.
· The Company completed a successful stripping programme at Sunbeam
with high grade results.
· The results of a soil sampling programme conducted confirms robust
gold anomaly at Esa.
· The Company completed channel sampling and drilling at the Zigzag
property.
Post-Period
· Quinlan
The Company entered into an exclusivity agreement with Broken Rock Resources
('BRR') which was consolidated into an Option agreement on March 20, 2024. The
Quinlan property contains 98 claims with FCM staking 50 claims and 48 claims
being optioned from BRR. The Agreement with BRR required an execution payment
of CAD$10,000 in cash and CAD$15,000 in FCM shares. The property contains a
significant lithium anomaly in a lake sediment sample collected by the Ontario
Geological Survey (OGS). The contractual work requirement for year 1 on the
property is a sum of CAD$50,000.
Full details of the Agreement were in RNS of March 21, 2024.
· Kerrs Gold
The Company entered into an exclusivity agreement with (1544230 Ontario Inc.
and Gravel Ridge Resources) for a sum of CAD$ 5,000, and this was consolidated
into an Option agreement on April 21, 2024. The property contains 36 single
cell mining claims, totalling approximately 665 hectares and lies 90
kilometres east-northeast of Timmins Mining Camp.
The Kerrs Gold Project contains a historical NI43-101 compliant resource
(2011), of 386,467 Oz Au.
Full details of the Agreement were in RNS of April 22, 2024.
· McInnes Lake
In March 2024, the Company entered into an exclusivity agreement with Emerald
Geological Services ('EGS') in order to acquire certain mining claims. The
Company is progressing due diligence on these claims with the intention of
entering into an option agreement which would grant the Company rights to
acquire these claims in a staged manner.
· OJEP
In addition to the CAD$ 200,000 received by the Company in 2023, The Company
received a further CAD$200,000 OJEP Grant from the Canadian Ministry of Mines
for the Zigzag lithium & critical metals property for work completed
during 2023 in April 2024. The receipt of the cash credit for the 2023 Zigzag
OJEP Grant was received in April 2024 but is accounted for within the 2023
financials.
· McKellar and Enable divestment to the 79th GRP Limited
In June 2024, an agreement was reached with the 79th GRP Limited to sell 100%
of the McKellar and Enable projects. The combined sale price is GBP £270,000
· Term Loan with the 79th GRP Limited
In addition to the 'McKellar and Enable' assets sale, FCM has entered into a
£230,000 working capital term loan with eh 79th GRP Limited in May 2024.
CHAIRMAN'S STATEMENT
For the Year Ended 31 December 2023
Dear Shareholders,
I am pleased to present the Chairman's statement for the year 2023, a year
that has seen exciting developments and notable achievements for First Class
Metals (FCM).
Throughout the year, we have made significant progress, starting with the
initial discovery at Dead Otter (North Hemlo). This discovery has opened up
new opportunities for further development of the North Hemlo property. We are
optimistic about the potential that this project holds for FCM's future.
In late 2022, we completed the strategic acquisition of Sunbeam, which has
proven to be a positive move for FCM. During 2023, we have made substantial
strides in advancing the development of Sunbeam, which has shown great
potential for our overall growth trajectory. We are enthusiastic about the
continued progress of this project.
We have also further advanced the Zigzag Lithium/Critical Metals property,
which adds value to our portfolio of prospects. FCM's carefully selected
property assets in northwest Ontario, Canada-known for its favourable mining
conditions-provide us with a strong foundation for exploration. We remain
focused on gold, semi-precious metals, and battery metals critical to the
evolving energy storage and power generation sectors.
At present, FCM maintains exposure to ten exploration projects, each
showcasing potential in a variety of commodities such as gold, lithium,
nickel, copper, zinc, molybdenum, and rare earth elements (REE). This
diversification positions us for growth and establishes FCM as a relevant
player in the exploration industry.
In January 2023, FCM proudly announced the discovery of a noteworthy gold and
molybdenum trend on the North Hemlo (Dead Otter Trend) extending over 3
kilometres. This discovery had several gold assays exceeding 1 g/t, with the
highest recorded at an impressive 19.6 g/t. We believe this discovery to be
one of the highest occurrences of gold on the Northern portion of the Hemlo
area. Subsequent work conducted throughout 2023 further supported and
reinforced the potential of this expanding discovery.
In June, FCM engaged in extensive consultations with our First Nation
partners, which culminated in the submission of exploration permit
applications for North Hemlo and Esa to the Ontario Ministry of Mines. These
applications sought permission for invasive exploration methods such as
drilling, mechanical stripping, and trenching on the properties. We are
pleased to announce that in November, both permits were granted approval,
representing a significant milestone for FCM. This achievement signifies that
both properties have achieved a drill-ready status, with the necessary permits
in place to facilitate further exploration activities.
We successfully raised £1,049,170 @ 10p per share with a broker led placing
alongside a private subscription (Directors Purchase of £37,500 by Marc Sale
CEO) and a warrant conversion in late June 2023. The funds were used to
further develop the company's exploration activities across its portfolio.
In the second half of 2023 exploration commenced on the Zigzag property with
an initial grab sample campaign which produced a successful first pass of
exploration over the property with multiple samples reporting +1% Lithium.
This focussed work started to define a 400m 'core' zone of interest. FCM
returned to complete a channel sampling campaign in early autumn. The results
from the channels were announced in November. Again, a significant number of
the channels returned samples of +1% Lithium with an outstanding highlight of
2.36% lithium (Li(2)O) over 5.5m.
In late December 2023, FCM commenced its inaugural drill program with a 500m
diamond drill program focused on the core zone at Zigzag. Results announced in
February exceeded all expectations. Numerous intercepts over 1% lithium with
some very interesting elevated critical/technology metal grades in Rubidium,
Tantalum & Caesium.
We successfully completed a second broker led fundraising of 2023 in November
raising £603,000, the funds supported the company working capital position
and allowed repayment of the Sanderson Capital Partners outstanding £500,000
convertible loan note (Sanderson CLN).
We have through 2023 developed the business to a point at which the portfolio
may be rapidly commercialised via sale or JV/Earn in:
· Zigzag Lithium and Critical Metals: successfully drilled and
open on strike and depth with a second potential trend identified to the
South. The property is fully permitted and is located in a prime location, sat
between several developing lithium projects on the Seymour/Falcon Lake lithium
belt. A large hydro scheme at Jackfish River 7km south of Zigzag Lake is under
consultation and there are numerous advanced stage studies from other project
developers for construction of key infrastructure including a spodumene
benefaction plant at Seymour Lake (Green Technology Metals Limited ASX:GT1).
· North Hemlo: the Dead Otter Trend was extensively worked in
2023 with further encouraging results. The granting of the exploration permits
further enhances the prospects of the property and we look forward to carrying
out more invasive exploration in 2024.
· Esa: soil sampling results in 2023 gave further credence to
the 'Esa Shear Zone' theory which is a 4.5km trend with anomalous gold and
pathfinder finder elements present. A limited stripping program in November
will be followed up in 2024.
· Sunbeam: early season prospecting helped gain a more in-depth
geological knowledge of the property and the wider 'English Option' ground.
This was followed up by two stripping and channel sampling campaigns around
the historical workings of the Sunbeam Mine, Roy, and Pettigrew shafts.
Results from the channel sampling across all three sites peaked at 18.8 g/5 Au
at Roy with multiple results above 1 g/t across the sample locations.
Pleasingly up to 4.98g/t Au was discovered in the porphyry at Roy.
Significantly the discovery of gold within the sheared and altered porphyry
could add significant upside to what was thought to be predominantly a
high-grade vein system hosted in mafic schist, from which the known historic
production was mined. This will form a focus for future exploration activity
in 2024.
We are continuously evaluating and advancing various strategies to enhance the
value of our portfolio and ensure the sustainable growth of the company.
To this end, we are exploring potential joint ventures, partial divestments,
or even project sales that align with our objective of maximizing value within
the shortest possible timeframe. Our board of directors is fully committed to
exploring innovative ways to unlock the full potential of our assets and
capitalize on strategic opportunities as they arise.
With the recent addition of the Quinlan, and the Kerr Gold properties (also
the potential addition of the McInnes Lake property), we have achieved a
well-balanced portfolio that provides us with multiple options for divestment
and renewed focus on developing the next set of promising prospects. This
strategic balance enables us to navigate the market dynamics effectively and
strategically allocate our resources for sustained growth.
We understand that adaptability and flexibility are key to success in the
ever-evolving metals exploration industry. By actively assessing our options
and making informed decisions, we are positioning FCM to capitalise on
opportunities and drive value creation for our shareholders.
The activities undertaken by First Class Metals (FCM) during the period have
been very positive, and we would like to extend our thanks to our dedicated
exploration teams in Canada led by Emerald Geological Services for their
unwavering drive and determination.
The momentum generated during this period will continue to be a central pillar
of our overall strategy moving forward. As we look ahead, we are excited to
build upon this strategy in the coming year. Our priority is to provide our
shareholders with a clear and well-defined vision for the future development
pathway of our substantially advanced exploration project pipeline. We
recognize the importance of transparent communication and are committed to
keeping our shareholders well-informed about our progress and strategic goals.
Our team remains dedicated to delivering sustainable growth and striving for
excellence in all aspects of our operations. By prioritising disciplined
exploration, responsible exploration practices, and prudent portfolio
management, we are confident in our ability to deliver long-term value to our
shareholders.
James Knowles
Chairman
OPERATIONS REPORT
CEO's Review on the Company Portfolio, Strategy and Operations
BACKGROUND
First Class Metals is a Canadian focused gold and critical metals explorer.
The Company is focussed on exploring the north-west region of Ontario. At the
point of listing in July 2022, FCM, through its wholly owned subsidiary First
Class Metals Canada Inc (FCMC), held seven 100% owned properties.
Geologically, these seven blocks lie within the highly mineralised and
prospective Hemlo-Greenstone Belt and the named extensions to the east and
west.
Four of these discrete claim blocks and a fifth that forms the nucleus of the
North Hemlo block were acquired from Power Metals Inc. ("Power" or "Power
Metals") prior to listing as part of a pre-IPO agreement in which Power vended
the claims into FCM for a one-third stake in the pre-IPO entity.
Subsequent to listing, during the reporting period, FCMC has entered into
three agreements, one covering the historic Sunbeam gold mine, a second on the
Zigzag hard rock lithium prospect and a third area contiguous and to the north
of the North Hemlo block being the 'OnGold' property.
The initial two agreements are with Nuinsco Resources Limited (Nuinsco) and
the third a private company, OnGold Invest Corp (OnGold). All properties are
also located in north-west Ontario, see Figure 01. The details of both these
transactions have been provided in press releases.
Figure 01 showing the nine property blocks (10 properties)
currently under the control of FCMC. Note: North Hemlo and OnGold are
contiguous and is considered one project
FCM, whilst constantly on the 'look-out' for quality Option or Purchase
Agreements, consider the five core properties contain significant potential
and the business model adopted is to add value to the properties and then
monetise the asset by sale or Joint Venture (JV).
The following table and narrative details the portfolio of ten claims from
west to east.
Area Owner Number of Claims Area (km2) Claim Types Minimum Expenditure required (CAD$)
Sunbeam and FCM 1134 49.0 9 Single Cell Mining Claims and 8 Multi-Cell Mining Claims 88,800
Sunbeam extn.
Zigzag FCM 6 1.2 2 Boundary Cell Mining Claims & 4 Single Cell Mining Claims 2,000
Coco East FCM 30 6.3 9 Boundary Cell Mining Claims, 21 Single Cell Mining Claims 10,200
Enable FCM 41 8.7 9 Boundary Cell Mining Claims, 32 Single Cell Mining Claims 16,400
McKellar FCM 66 12.5 9 Boundary Cell Mining Claims, 57 Single Cell Mining Claims 23,600
Magical FCM 14 2.9 Single Cell Mining Claims 5,600
Esa FCM 86 20.6 1 Multi-cell Mining Claim, 38,800
85 Single Cell Mining Claims
North Hemlo FCM 394 82.7 Single Cell Mining Claims 157,600
North Hemlo Pezim II FCM 49% 33 6.9 Single Cell Mining Claims 13,200
OnGold Others 163 34.55 Single Cell Mining Claims
Sugar Cube FCM 205 42.7 Single Cell Mining Claims 82,000
268.05 438,200
Note: The assessment credits for the above properties have been applied and
hence the only properties that need expenditure in 2024 to remain in good
standing are Coco East (CAD$) $8414 & Esa ($CAD) $28,533.
All the claim blocks have underlying Net Smelter Return (NSR) or similar
royalty payments.
These generally fall into the three following categories but are detailed in
the attached table and in the relevant press releases pertaining to the
individual transactions:
The following table is reproduced from the IPO prospectus with the addition of
the Sunbeam and Zigzag acquisitions and is relevant as of Dec 31, 2023.
Overview of Operations
The 2023 field season was a very successful one for First Class Metals as the
first full year of activity and built off the pre-IPO activities and post IPO
exploration in 2022.
Significant advances were achieved on the flagship North Hemlo property. FCM,
through its 100% owned subsidiary First Class Metals Canada Inc., continued to
explore several of the seven properties that formed the portfolio on listing.
Furthermore, significant prospecting and exploration was undertaken on the
post-IPO Sunbeam and Zigzag acquisitions. Other than limited lake sediment
sampling in the winter of 2022/23 there was no groundwork conducted on the
Coco East, Magical or Sugar Cube properties in 2023. However, the Sugar Cube
property was subject to a low-level high definition VTEM geophysical survey.
The business / exploration strategy of FCM is similar in rationale and
execution as that of many junior, newly listed exploration companies: to value
add to an exit event, by JV or sale. This approach can equally apply to the
company itself or individual projects in the Company's portfolio.
The field season's results reported to date for 2023 have advanced this
business strategy significantly. Notwithstanding the two significant
acquisitions which also enhanced the Company's appeal to investors.
FCM intends to continue this business model in 2024: to value add to the
existing portfolio as well as to review other opportunities in Ontario that
will add potential to the company. However, the focus of any exploration
company is the timely undertaking of drilling. FCM successfully moved four of
the key properties towards 'drill ready' status and undertook a maiden drill
programme on the Zigzag hard rock lithium property.
Whilst the Company is monitoring its land position as well as expansion
opportunities, the possibility of joint venturing parts of the portfolio is
always a consideration. The West Pickle Lake project area under JV with
Palladium One (renamed to 'GT Resources') in the north-east of the North Hemlo
property is a clear example of the success of this aspect of the Company's
strategy.
The following is an overview of the Company's field activities resulting from
the 2023 field season. Many of the final assays were not received until 2024,
though the work was completed, and samples submitted for analysis during the
reporting period.
The following sections detail the ten properties in a rough ranking order,
from 'core' to 'non-core' and with respect to the field work undertaken and
further planned. Whilst most activities fall within the reporting period,
events noteworthy after 31 December 2023 are included in order to present an
accurate account of activities.
The claim blocks detailed from core to non-core:
The ten claim blocks, (OnGold is contiguous to North Hemlo), covering almost
230km², are distanced by about 400km from Sunbeam in the west to Sugar Cube
in the east.
Hemlo area
The Hemlo Schreiber greenstone belt has two broad divisions, the south and the
north limbs.
The Barrick Hemlo producing gold mine is located on the south limb and is
associated in a macro sense with shearing and increased molybdenum values. The
Hemlo north limb in which the Esa and flagship North Hemlo properties are
located has three distinct shears identified by previous explorers. The shears
in part transect both properties, see Figure 02.
Figure 02 showing the regional geological and structural setting of the North
Hemlo OnGold and Esa block (Hemlo 'north limb'), relative to the Hemlo gold
mine.
I. North Hemlo
The Flagship North Hemlo property historically comprised of three claim areas:
Pezim I & II, and Wabikoba, that weren't contiguous. However, the addition
of the Hemlo North block, acquired from Power Metals Plc., brought North Hemlo
together as one cohesive block, see Figure 03.
Figure 03 showing the composition of the North Hemlo claim blocks.
The entire property now extends across 448 claims covering ~98km², with the
signing Agreement with OnGold the property area was extended by 34.5km² (163
claims) which are contiguous to the north, see Figure 02. Note: 33 claims are
under effectively a Joint Venture agreement with Palladium One and FCMC's
ownership is reduced as per the terms in the Joint Venture agreement.
There were limited historical showings on the property, the most important
being the gold / molybdenum showing at Dead Otter Lake which reported 3.1ppm
Au, 0.59%Mo. Also, the geology / geophysical signature of the Dotted Lake /
Fairservice prospect continues onto the North Hemlo block. Furthermore, the JV
- Earn-in with Palladium One has significantly enhanced the base, battery, and
critical metal potential of the block.
Further potential is derived from the arcuate inferred shears which mimic the
shear hosting the Hemlo gold mine, see Figure 03.
An Exploration permit, required for 'invasive' exploration such as trenching,
stripping, and drilling, was granted for both the North Hemlo and Esa blocks
in October 2023.
An Exploration Permit was granted by the Provincial authorities over North
Hemlo in October 2023, this was closely followed by the execution of an
Exploration Agreement with Netmizaaggamig Nishnaabeg First Nation (NNFN) in
November 2023 (the agreement also covers the Esa claim block).
Exploration:
Whilst exploration to date by FCM has focussed in the southern sector around
the Dead Otter Lake showing (3.7 g/t gold 'Au' and 0.59% molybdenum 'Mo')
exploration property wide has been enhanced with the low-level high-resolution
helicopter borne magnetic survey, see Figure 04.
The survey was a high-resolution heliborne magnetic survey covering the North
Hemlo property (the survey did not cover OnGold nor Pezim II) was flown in
2022.
Figure 04 showing the hi res. mag. survey conducted over the North Hemlo
block, the OnGold and Pezim II claims were not included in the survey.
The magnetic survey has shown that there are additional linear anomalies which
require further exploration throughout the property, especially where
intersected by north-south and northwest structures. The survey highlighted
the structure hosting the Dead Otter Lake trend, 'DOT', as well as other
potentially interesting features such as the extension of the Dotted Lake
mineralised zone. The intersections of the N-S and NW-SE structures in the
central north sector are veritable exploration targets as are the structures
paralleling the DOT in the south. The magnetic interpretation undertaken by
Paterson, Grant & Watson ('PGW') confirms the belief that two arcuate
structures, refer to Figure 02 pass through the claim block, the southern
structure coinciding with the DOT and the northern structure with the
extension of the Fairservice showings at Dotted Lake.
The Dead Otter Lake area is situated about 20km north of the iconic Barrick
Hemlo 23Moz Au producing mine.
During the season extensive work: prospecting, sampling, and mapping have been
undertaken along the Dead Otter Trend, the focus has been around the
historical showing and the area reporting 19.6ppm Au over three kilometres to
the southeast. Whilst sampling to date has not replicated the historic value
there is limited outcrop exposed owing to water ingress. The presence of
visible gold and gold being 'panned' from crushed rock may indicate that there
is potentially an issue with 'coarse gold' in the area of the historic
showing.
Furthermore, the trend is reporting very high values of pathfinder elements
including molybdenum as well as telluride which is strongly associated with
gold deposits especially in the Hemlo area. Additionally, over 750m SE along
trend from the historic showing an isolated outcrop returned 2.29ppm Au. This
confirms the trend is auriferous. Furthermore, in the area of the 19.6ppm
sample other samples have reported 13.6ppm and 4.6ppm Au, see Figure 05.
Future work will include detailed prospecting along the trend to prove the
continuity of the structure along strike from the known gold occurrences,
leading to stripping and drilling. As previously mentioned, the property is
permitted for drilling.
The identification of a +3km long gold anomalous trend extending from the
historic Dead Otter Lake occurrence to a grab sample recording 19.6g/t Au
along the same geological trend is considered a significant 'new discovery'.
Whilst the trend is discontinuous in a geochemical sense owing to the lack of
exposure, further very encouraging gold and pathfinder elements have been
reported.
Figure 05 showing the Dead Otter Trend with the historic showing in the
north-west extending for >3km to the 19.6g/t Au sample in the south-east.
The mineralised structure closely mimics the granite contact. The high-grade
gold sample, (see Photo 01), in the extreme southeast of the trend could be
where one of potentially two subparallel arcuate trends intersects the
principal trend, see Figure 05.
Figure 06 the location of the '19 grammer' on the Dead Otter Trend.
OnGold
The property is located contiguous to the North Hemlo claims as well as those
of GT Resources and consists of 163 single cell mining claims, comprising
34.5km², refer to Figures 2 and 4.
The property is located roughly 21kms southeast from the town of Manitouwadge,
Ontario and all mining claims are in good standing through the 2023 field
season.
Previous prospecting has identified eleven high priority targets on the
property, predominantly base metals anomalies.
This Option agreement which has a zero cash component, see table below,
significantly increases FCM's footprint in a district that holds numerous high
grade nickel copper sulphide discoveries.
Limited previous exploration has been focussed to investigate several discreet
magnetic anomalies thought to be associated with Ni-Cu-PGE mineralised
mafic-ultramafic intrusions. Similar rock types comprise the Tyko, RJ, Smoke
Lake and the more recently discovered West Pickle massive sulphide discovery.
FCM, as part of the due diligence process, conducted a lake sediment sampling
campaign in the winter of 2022/23 as access is far easier in the winter
months. The initial results from this campaign have reported gold grades of up
to 103ppb, see Figure 07.
Figure 07 showing the OnGold claims relative to North Hemlo as well as the
location of the lake sediment samples.
The program was led under the supervision of Bruce MacLachlan, the principal
of Emerald Geological Services (EGS). Bruce has been quoted as saying "To the
best of our knowledge the 103ppb Au Lake sediment value is the highest lake
sediment value collected in the Hemlo Belt outside of the deposit area".
Whilst at a very early stage, these initial results are extremely encouraging
and add to the potential for the prospectivity of the property as the 103ppb
Au Lake sediment sample result also now shows the gold potential of the area.
Terms of the deal:
The deal is structured so that FCM has an option to earn-in up to an 80%
interest over the property. The payments for the exercise of this option are
1,000,000 of FCM Shares to be issued by the 31st of October 2023 and a work
commitment of CAD$300,000 over a three-year term. At the end of the
'earn-in' it is expected a JV will be created.
Ordinary FCM Shares Annual Work Commitment (CAD$)
By 31(st) October 2023 1,000,000 0.00
By 10(th) July 2024 $50,000
By 10(th) July 2026 $300,000 (aggregate)
The JV possess a dilution mechanism on the basis of non-contribution. Should
Ongold not wish to contribute, or their ownership falls below 10%, the
remainder of their holding is automatically converted in to a 2% NSR. FCM has
the right to acquire 67% of the stated NSR for C$ 750,000 and a first right
of refusal over the remaining NSR.
West Pickle Lake
Palladium One commenced drilling in July 2022 and continued throughout the
field season into December. Results reported to date confirm the presence of a
previously undiscovered nickel copper sulphide zone extending west from the
Palladium One's RJ Showing into the JV area on West Pickle Lake, see Figure 2,
this figure also highlights some of the better drill results received into
2023. For a more comprehensive list of significant drill results, see the
table below. The assay results include the high grade reported from hole
TK-22-073 at 10.3% Nickel (Ni), 2.9% Copper (Cu) over 1.8 meters, see Figure
9.
Two holes TK22-072 and TK22-073, have reported significant nickel/copper
sulphides, see table below of drill hole intersections for full details of the
programme for 2023.
Figure 08. Massive pentlandite-pyrrhotite-chalcopyrite sulphide intersection
in hole TK-22-073 from 137.5 to 139.3 meters down hole (core is dry), wall
rock is tonalite breccia.
Figure 09. Area map showing the location of the West Pickle Lake Discovery
Hole From (m) To (m) Width (m) Ni % Cu % Co % TPM g/t (Pd+Pt+Au) Pd g/t Pt g/t Au g/t
TK22-058 214.1 214.6 0.5 0.04 0.02 0.00 0.00 0.00 0.00 0.00
TK22-059 184.0 187.7 3.7 2.33 1.85 0.06 0.45 0.21 0.21 0.03
185.3 187.7 2.4 3.49 2.73 0.09 0.64 0.30 0.30 0.04
185.3 187.0 1.8 4.79 3.67 0.12 0.87 0.41 0.41 0.05
185.3 185.9 0.6 8.21 1.60 0.24 1.62 0.80 0.79 0.03
TK22-060 183.7 196.3 12.6 0.72 0.34 0.02 0.14 0.06 0.06 0.02
184.3 189.0 4.7 1.77 0.63 0.03 0.27 0.12 0.12 0.03
186.6 189.0 2.4 3.18 0.99 0.06 0.39 0.18 0.19 0.02
188.0 188.5 0.5 7.60 1.25 0.12 0.41 0.18 0.20 0.03
TK22-061 188.7 190.8 2.1 0.75 0.43 0.01 0.28 0.14 0.11 0.03
190.2 190.8 0.6 1.62 0.67 0.03 0.47 0.25 0.20 0.02
TK22-062 202.0 213.5 11.5 0.06 0.08 0.00 0.04 0.01 0.01 0.01
203.6 204.4 0.8 0.16 0.35 0.01 0.14 0.05 0.07 0.02
TK22-063 149.0 152.0 3.0 0.07 0.24 0.00 0.13 0.04 0.05 0.05
149.5 150.5 1.0 0.15 0.54 0.00 0.32 0.09 0.12 0.11
TK22-064 219.8 245.5 25.8 0.04 0.02 0.00 0.01 0.00 0.00 0.00
219.8 220.3 0.5 0.65 0.27 0.03 0.21 0.10 0.11 0.01
TK22-065 224.3 246.0 21.7 0.04 0.02 0.00 0.01 0.00 0.00 0.00
240.8 246.0 5.2 0.10 0.05 0.00 0.02 0.01 0.01 0.00
240.8 241.2 0.4 0.40 0.18 0.01 0.06 0.04 0.02 0.00
TK22-066 150.3 178.5 28.2 0.06 0.02 0.00 0.01 0.00 0.00 0.00
158.9 162.9 4.0 0.19 0.07 0.01 0.02 0.01 0.01 0.00
161.2 162.9 1.7 0.35 0.12 0.01 0.04 0.02 0.01 0.00
TK22-067 200.2 200.7 0.5 0.06 0.01 0.00 0.00 0.00 0.00 0.00
TK22-068 134.3 139.5 5.3 0.11 0.08 0.01 0.03 0.01 0.01 0.00
135.3 135.8 0.5 0.25 0.25 0.01 0.08 0.04 0.03 0.01
TK22-069 No Significant Assays
TK22-070 164.6 174.7 10.1 2.47 0.99 0.04 0.27 0.14 0.10 0.02
164.6 168.4 3.8 6.42 2.40 0.09 0.64 0.35 0.25 0.04
165.4 167.6 2.3 10.41 3.40 0.14 0.92 0.53 0.34 0.04
165.4 167.1 1.7 12.58 2.49 0.17 0.94 0.60 0.30 0.04
165.4 166.3 0.9 12.90 2.70 0.16 1.05 0.67 0.34 0.04
TK22-071 151.7 156.9 5.2 0.72 1.07 0.01 0.28 0.10 0.10 0.08
155.7 156.9 1.2 2.00 2.51 0.04 0.21 0.06 0.13 0.02
155.7 156.2 0.6 4.10 3.81 0.06 0.27 0.09 0.16 0.03
TK22-072 149.0 153.1 4.1 2.05 0.89 0.04 0.36 0.11 0.22 0.03
150.4 153.1 2.7 3.08 1.18 0.07 0.45 0.14 0.29 0.02
151.7 153.1 1.5 5.33 1.48 0.12 0.67 0.17 0.48 0.02
151.7 152.3 0.7 7.39 2.22 0.16 0.95 0.24 0.69 0.03
TK22-073 137.5 140.1 2.6 7.19 2.01 0.10 0.56 0.32 0.20 0.05
137.5 139.3 1.8 10.32 2.88 0.15 0.80 0.46 0.27 0.07
138.5 139.3 0.8 11.90 0.98 0.16 0.64 0.33 0.26 0.05
Table showing Assay Results and drill results from the West Pickle Zone.
Note:
(1) Reported widths are "drilled widths" not true widths.
(2) Italicised grey shaded values are previously reported, see previous
news releases.
Drilling at West Pickle Lake by GT Resources has demonstrated that the
high-grade nickel-copper sulphide occurrence hold potential to be extended
both east towards their RJ showing as well as west onto or close to the 100%
owned FCM North Hemlo property. This area will also be a focus for
reconnaissance in a future field season as well as follow up of the lake
sediment samples and grab samples.
Furthermore, interpretation of the VTEM data by GT Resources infers there is
potential for further discoveries, specifically to the west of WPL, in the
area of TK22-076 which was drilled just off the 100% owned FCM North Hemlo
Property boundary which intercepted 46.3m of 'anomalous nickel mineralisation'
in an east west trending structure, see Figure 10
Figure 10: Plan and long section looking north perpendicular to the
interpreted chonolith structure linking the West Pickle and RJ zones, showing
potential for massive sulphide mineralization beyond the depth detectable by
the 2021 VTEM airborne survey.
GT Resources (Palladium One) whilst continuing the exploration / drilling of
the West Pickle Lake project areas produced a NI43-101, as required under the
JV terms.
Zigzag
The project is less than 100km from Armstrong in northwest Ontario in
the Seymour Lake area, a district already proven to be prospective for hard
rock, pegmatite hosted lithium. Existing infrastructure currently in place in
the local area is expected to be further bolstered in the future by the
planned Jackfish Hydro project and a Spodumene Process Plant at the Green
Technology Metals, Seymour site which is just over 10km away.
Figure 11 showing the regional setting of the Zigzag claim block.
The six-unit claim group spans approximately 1.2km² and includes a mapped
structure of 800m which (Tebishogeshik occurrence) is wholly contained within
the claim block, the lithium-tantalum mineralization is pegmatite-hosted with
significant rubidium and caesium mineralisation also reported. All of which
are 'critical minerals' as identified by the Canadian and United Kingdom
Governments.
Previous workers of the Tebishogeshik occurrence have identified Li2O and
Ta2O5 mineralization along the entire length of the showing from sampling at
surface, grading up to 1.68% Li2O over 7.9m and 0.168% Ta2O5 over 2.54m in
separate channels samples. Several shallow historic drill holes along the
occurrence have returned significant intersections, including, (in separate
drill holes) an intersection grading 1.08% Li2O over 6.1m and a separate
intersection of 399.8ppm Ta2O5 over 2.92m. Both intersections were less than
20m down hole. The structure is open along strike and to depth and remains to
be fully evaluated.
The claims were optioned from Nuinsco in March 2023. Nuinsco, whilst not the
registered owners, hold an Option to Purchase agreement with the claim owner.
FCM has entered into a four-year work programme as well as staged payments to
Nuinsco, which can be accelerated. At the fulfilment of these obligations, FCM
will own the claim option on an 80:20 arrangement with Nuinsco. At this point
a JV would be entered into between FCM and Nuinsco for the further development
of the mining claims. Should either party not wish to contribute to the JV
they would be diluted as per an agreed dilution formula. If either Nuinsco or
FCM is diluted to 10% ownership their entire remaining ownership would be
automatically converted into an NSR.
Terms of the deal:
The deal is structured so that FCM has an option to earn-in up to an 80%
interest over the exclusive option held by Nuinsco Resources over the Zigzag
mining claims. The payments for the exercise of this option include a cash
component of CAD$500,000 and a share component of CAD$250,000 in FCM Ordinary
Shares spread across approximately 3.5 years. Additionally, FCM has committed
to undertake exploration related expenses on the property over the same period
to a value of CAD$550,000.
Table Zigzag Option Schedule
Cash (CAD$) Ordinary FCM Shares (CAD$) Annual Work Commitment (CAD$)
On Signing 50,000 25,000 0.00
June 01, 2023 75,000 30,000 50,000
June 01, 2024 100,000 50,000 100,000
June 01, 2025 125,000 60,000 150,000
June 01, 2026 150,000 85,000 250,000
Total 500,000 250,000 550,000
These payments and work commitments may be accelerated at FCM's option. Upon
completion, the Zigzag mining claims will be owned by FCM and Nuinsco on an
80:20 basis and the parties will be deemed to enter a joint venture for the
development of these mining claims. Should either party not wish to contribute
to this joint venture a standard industry dilution clause shall apply. If
either party dilutes to a 10% ownership interest or lower, their entire
interest will automatically convert into a NSR royalty payment, and the other
party shall be the 100% owner of the Zigzag mining claims. Additionally, half
of such NSR royalty payment may be purchased by the other party by paying a
sum of CAD$ 750,000.
Prospecting of the Zigzag property commenced early in the 2023 field season in
association with reconnaissance for access to the claim area. Initial
prospecting returned very encouraging results which validated and enhanced the
historic reported assays, see table below.
Sample
Number Lithium (Li) % Tantalum (Ta) ppm Niobium (Nb) ppm Rubidium (Rb) ppm
A1104880 1.39 184 104 884
A1104881 0.51 85 48 2770
A1104882 1.0 139 81 855
A1104883 0.012 198 88 3750
Sample-1 0.07 346 72 1140
Sample-2 0.41 219 79 1130
Sample-3 0.196 79 54 361
F006543 1.7 75 41 820
F006544 1.63 235 90 1200
F006545 1.65 115 60 1190
Table of the sample results from first pass prospecting. Note these are
'non-systematic samples collected during access appraisal. (Values rounded for
clarity).
As follow up to this initial systematic sampling programme the team undertook
furthermore systematic sampling in parallel with preparing for and undertaking
a sawn channels sampling programme across the prospective outcrop. Note as an
Early Exploration Agreement was not then in place no stripping to enlarge
outcrop exposure was permitted.
The sawn channel sampling programme was along a ~150m strike at intervals
across the exposed pegmatite outcrop.
Final results of the significant assays from the initial thirty-nine
samples are detailed in the table below
Sample No. Caesium Gallium (Ga) ppm Lithium (Li)_ppm Rubidium Tantalum
(Cs) ppm (Rb) ppm (Ta) ppm
F006543 92.6 107 17000 820 75.2
F006544 109 105 16300 1200 235
F006545 128 101 16500 1190 115
F006547 48.3 92.2 11500 695 162
F006548 100 87 12300 1110 50.3
F006549 77 118 21200 302 80.6
F006550 128 69.9 13200 795 90.9
F006572 146 81.6 12600 1630 84.3
F006573 85 112 17800 536 179
F006574 102 152 29700 404 57.3
F006575 256 133 469 3810 136
F006576 81.7 124 22300 514 467
F006579 96.8 95.9 236 1390 104
F006580 70 113 18500 650 145
F006581 82.3 99 10900 2000 51.3
F006582 19.4 87.1 16200 277 79.6
F006583 36.5 108 20100 255 235
F006584 89.6 100 8250 1510 5220
F006585 54.3 84 13200 938 67.4
F006586 44.5 117 18300 846 724
F006592 66.9 153 27500 587 54.3
F006593 65 77.4 7240 736 246
F006594 46.4 60.8 5820 748 69.3
F006596 34.5 78 10200 458 126
Table of the higher Li2O, results reported. All samples are of pegmatite with
varying amounts of visible spodumene.
The grab samples identified a strike of over 350m with >1% Li2O and
remains open in both directions.
Furthermore, there were, (some in coincident samples) 6 samples >250ppm
tantalum (Ta). Nine samples reported >1000ppm rubidium (Rb) with the
highest reported valuer being 3800ppm Rb. Several samples were also anomalous
in caesium (Cs). See table of the more significant values. Note some samples
were of iron formations not pegmatite and are not included.
Nine sawn channels were cut with lengths of under 5m to over 10m, channel
lengths were usually controlled by overburden and not by diminished outcrop. A
total of 80 samples were submitted to the laboratory for analysis, these
included, where exposed not only the pegmatite but one, one metre sample in
the host rock, which is in general mafic volcanics to the north and granitic
rocks to the south.
The samples can therefore be easily segregated into four broad categories:
mafic, pegmatitic, granitic pegmatites and granite.
Figure 12 showing the location of the channels relative to the 'core 400m'
zone.
The results from the channels are very encouraging. It must be stressed that
only hand stripping of vegetation was undertaken and often, exemplified by
channels 5 and 7, the outcrop persisted but the vegetation cover was too
onerous to be removed by hand. Accordingly, it is felt that with mechanical
stripping many of these channels could be extended. Additionally, it is also
likely that 'gaps' in the outcrop continuity might also be exposed as being
pegmatite when exposed with mechanical stripping. The current permit allows
both stripping and drilling.
The results have not only vindicated the grab samples in respect to the
lithium oxide content but also highlighted again the presence of other
important, critical minerals such as tantalum, gallium, and rubidium, see
table below for highlights of the reported assays.
Channel Length (metres) Lithium (Li20%) Tantalum (Ta205) ppm Gallium (Ga) ppm Rubidium (Rb20) ppm
3 2.4 0.81 170 80 2000
Includes 1.00 1.31 170 90 2920
3 3.1 1.52 60 90 1820
Includes 0.9 2.54 100 110 2550
and 0.5 2.05 40 100 950
4 1.8 1.85 220 90 1740
5 2.2 0.96 130 90 1280
Includes 0.8 1.39 100 100 940
6 2.00 1.96 160 110 1170
7 5.5 2.35 150 120 1740
Includes 2.5 3.43 170 140 1270
8 1.8 1.03 110 80 2070
Includes 0.5 1.43 90 90 1050
9 1.9 1.15 290 80 1400
Includes 0.6 2.19 500 80 1010
9 3.7 1.14 150 100 1290
Includes 1.9 1.41 160 100 1710
Table showing the significant assays from the sawn channel samples from the
Zigzag property
Figure 13 showing the extent of outcrop exposed by hand stripping. Also note
the change in rock type from mafic volcanics (closest) to granitic pegmatite.
Prior to the drill programme in December 2023 a further prospecting campaign
was undertaken. This was dominated by soil sampling, the sample lines focussed
on the open eastern and western extent of the 'core area' as well as a
postulated subparallel structure or splay to the south of the main structure.
Figure 14 showing the main zone at Zigzag with locations of channels and drill
holes, as well as the MMI soil sampling lines.
The results of the MMI soil sampling assays gives support that the main
structure continues along strike from the known (sampled) outcrop.
A significant silver anomaly was identified over the two eastern most MMI
lines off the main zone. This also requires further investigation.
Furthermore, there is strong geochemical support for a sub parallel trend
about 200m to the south of the main zone. Additional work is needed to expand
and confirm the anomalism identified. As well follow up sampling is required
to confirm the presence of a possible third trend currently identified in
anomalous rare element results in grab samples.
Drilling
The drilling targeted the 400m central section of the property which had been
subject to a non-mechanised stripping and channel sampling programme reporting
up to 2.36% lithium (Li2O) over 5.5m, see figure 15.
Figure 15 Drilling covered the area of channel sampling and 'grabs' on roughly
50 m centres (note historic grid lines are on 200ft (60m) centres).
Historic drill holes also reported an intersection grading 1.08% Li2O over
6.1m from 12.45m and a separate intersection of 399.8ppm Ta2O 5 over 2.92m
from 15.50m. The results from the maiden drill programme by FCM were most
encouraging and the significant intersections appear in the table below
Drill Hole Metal Depth From Width Grade
ZIG-23-01 Li₂O 12.7m 4.3m 1.65%
incl. 1.0m 2.93%
Rb₂O 11.7m 5.3m 0.21%
ZIG-23-02 Li₂O 15.0m 5.0m 1.5%
incl. 0.2m 5.19%
Rb₂O 14.25m 5.75m 0.21%
incl. 0.3m 0.54%
Cs 14.25m 3.25m 132 ppm
incl. 0.25m 430 ppm
Ta 14.0m 6.8m 90 ppm
incl. 0.2m 235 ppm
Ga 15.5m 0.2m 144 ppm
ZIG-23-03 Li₂O 14.7m 0.75m 2.1%
Rb₂O 12.6m 2.1m 0.16%
Cs 12.0m 5.0m 151 ppm
incl. 0.45m 480 ppm
Ta 12.6m 3.9m 164 ppm
incl. 0.45m 624 ppm
Ga 21.9m 0.25m 127 ppm
and
ZIG-23-03 Li₂O 28.4m 1.6m 0.46%
Rb₂O 27.8m 2.2m 0.17%
ZIG-23-04 Li₂O 20.0m 1.6m 0.79%
Rb₂O 20.0m 1.6m 0.21%
Ta 15.3m 7.8m 165 ppm
incl. 1.0m 347 ppm
ZIG-23-05 Li₂O 7.6m 6.0m 1.13%
incl. 1.0m 2.17%
Rb₂O 5.7m 3.8m 0.16%
Ta 4.8m 9.9m 167 ppm
incl. 0.4m 401 ppm
ZIG-23-06 Li₂O 28.8m 2.2m 1.09%
incl. 0.3m 2.26%
Rb₂O 28.8m 2.2m 0.19%
ZIG-23-07 Li₂O 9.9m 6.5m 1.09%
incl. 0.5m 2.76%
Rb₂O 10.4m 6.6m 0.21%
incl. 1.0m 0.41%
Cs 13.0m 4.0m 126 ppm
Ta 9.0m 7.4m 131 ppm
incl. 0.6m 177 ppm
ZIG-23-08 Li₂O 65.5m 3.0m 1.28%
Rb₂O 65.5m 3.4m 0.11%
Ga 65.5m 3.0m 98 ppm
incl 1.0m 114 ppm
ZIG-23-09 Li₂O 47.25m 4.75m 0.52%
incl. 0.8m 1.06%
Rb₂O 47.25m 4.75m 0.14%
Table assays from the (nine) hole drill programme at Zigzag, every hole had
reportable intersections of Li₂O with significant 'credits' from the
accessory critical elements / metals, specifically rubidium oxide, Rb₂O.
The presence of abundant spodumene in the core, see figure 16 below, is
reflected in the assays.
Figure 16-Shallow intersection of pegmatite hosting spodumene (pale green
'blades' in hole ZIG-23-01).
Two (shallow) step-back holes were conducted as well as a scissor hole to
confirm the dip of the structure. Further drilling is warranted both along the
(open) strike to the west and east as well as down dip.
However, drilling will be preceded by a mechanical stripping programme to
identify further outcrops inferred by the anomalous MMI results as well as to
improve outcrop continuity in the main zone.
Sunbeam
The Sunbeam Gold Property includes the historic Sunbeam Mine. This was a
high-grade underground gold mine which operated from 1898 to 1905. The
property now comprises three claim blocks, all in the name of FCMC. The core
of the Property consists of 104 unpatented mining claims covering 20.2km²
with the 'English option claims encircling and the newly staked claims
contiguous to the northeast, totalling over 70km².
In 2023, FCMC staked a further 119 claims, covering 25km² and contiguous to
the northeast of the English option area. see Figure 17. The newly staked
claims remain in good standing for two years before requiring assessment
credits derived from field work. Additionally, as they are contiguous to the
'English option' assessment credits can be spread across the new claims.
The Option to purchase was signed with Nuinsco in October 2022. Nuinsco held
the claims through an underlying agreement with several prospectors who
originally held the claims. In February 2023, FCM made a second payment to
Nuinsco, and the 'core' claim ownership was transferred to FCMC. The Sunbeam
extended (English Option extending over 24.8km²) was part of an Option
agreement with Nuinsco and the claim owner, which FCMC has now paid out in
full.
Figure 17 showing the Sunbeam Property including the Sunbeam extended 'English
option' and the new claims.
Both the Option areas are covered by an Exploration Permit, granted in June.
Furthermore, the area is also under two distinct, though similar, MoU's with
the two prominent First Nations in the area who have traditional land claims
which include the Sunbeam Property.
Following on from the detailed historical review of all available data, from
the time historical production commenced in the early 1900's, through to the
last drilling campaign as well as geophysical data, FCM initiated a focussed
exploration across the property.
In parallel to the exploration and in line with our key ESG objectives and
respect for the local First Nation Peoples who have an interest in the area a
Stage 1, Archaeological Heritage Review (AHR) was conducted and submitted to
the provincial authorities in 2023. The review was undertaken by White Spruce
Archaeology Inc., who were nominated by the FN group requesting the Survey.
The AHR focussed on identifying any historical areas of First Nation interest,
but other than water courses and lakes none were identified.
The Sunbeam property is dominated by three mineralised structures each
identified over 10km traversing the property; these are inferred to continue
to the northeast into the new area where prospective structural features are
inferred all three-host significant gold anomalism as well as historic
development, including the Sunbeam high grade gold mine which operated until
1905 and reportedly produced multi ounce material, see figure 18
Figure 18 showing the three district, sub parallel structure transecting the
enlarged Sunbeam Property, note the significant number of anomalous gold
'showings' as well as historic development on each structure.
During 2023 an initial stripping and channel sampling programme at the
historic production sites of Pettigrew and Roy has been completed. The results
from Roy indicate a semi continuous zone across strike of multi-gramme
material. However, further stripping and sampling was considered necessary,
and a second stripping programme was completed in late 2023 in order to better
define the potential drill targets.
The two stripping campaigns were successful in not only identifying gold
bearing structures but also enhancing the understanding of the geology of the
mineralisation. At Roy, most of the samples were 1m or less, with a minimum of
0.1m and a maximum of 1.4 m. The results have defined a broad zone of
shearing, alteration, and mineralization, peaking at 18.8 g/t (ppm) Au in one
0.3m channel sample (within interval of 6.2 ppm Au / 1.05 m). There are a
significant number of other results exceeding 1ppm Au that define the
anomalous structure over a strike of 100m between the existing shafts and open
along strike.
The high-grade gold mineralisation is hosted in quartz veining in sheared
'mafics' within a sheared, folded felsic to intermediate porphyry which often
exhibits quartz veining, silicification and ankerite alteration, and which
also frequently contains anomalous gold, see Figure 19.
Figure 19 showing one of the 'quartz blowouts' at Roy in the new area
stripped.
A similar situation exists at Pettigrew, where historical drilling was
encouraging, with two holes returning significant gold assays including: Hole
57751: 19.4 g/t Au over 0.63m at 5.33m
Highlights from the assays from the second round of stripping include:
At Roy results have confirmed high grade gold assays up to 18.8 g/t gold (Au)
/ 0.3m channel sample
Other highlights include:
6.27 g/t Au channel / 0.35m in mafic schist with quartz veinlets;
4.98 g/t Au channel / 0.5m in sheared porphyry; and
5.58g/t Au channel / 0.5m within a quartz vein.
At Pettigrew channel and grab samples returned significant gold grades,
including:
13.0 g/t Au grab sample from quartz rubble dug up beside the stripped outcrop.
3.5 g/t Au channel / 0.2m in a quartz vein with galena and chalcopyrite;
1.82 g/t Au channel / 0.75m in sheared porphyry; and
0.32 g/t Au channels / 3.95 m within sheared porphyry.
Figure 20, showing a close up with 'VG' (visible gold), in one of the channels
at Roy.
.
Significantly the host porphyry reported up to 5ppm. As a result, it is
recommend that the historic core is reviewed in order to quantify the amount
of porphyry and if deemed necessary sampled.
Since the announcement of the Sunbeam acquisition in early October 2022, we
have been working to advance the project to drill ready status.
Granting of an updated Exploration Permit was achieved in June 2023 and one
aspect was the increased areas available for stripping, particularly in the
vicinities of the three historical development areas.
The stripping undertaken in 2023 has not only increased the potential of the
Property but advanced the Roy and Pettigrew zones to a point whereby drill
holes could be located.
Esa
The Esa property contains 86 claims, covers 20.6km², and is located
approximately 11km northeast from the Barrick Hemlo gold mine, immediately
south of FCM's North Hemlo property. Esa was one of the 'seed' properties that
formed the pre-IPO package.
Geologically, the property sits between the Cedar Lake Pluton and the Musher
Lake Pluton, such intrusions are considered important components for driving
mineral-rich fluids and economic mineralisation is often associated with the
contacts or structures associated with the intrusive event.
A prominent geophysical / geological feature transects the claim block. This
structure adds significant merit to the block's potential, as its continuation
outside the Esa boundary is associated with gold occurrences, see Figure 21.
Figure 21 the Esa block with geophysics overlay and district geology as well
as anomalous Au sample results.
This structure is considered one of three subparallel, arcuate trends
contained in the Hemlo 'north limb', which mirror the Hemlo trend to the
south, (see Figure 02). There are also a number of N-S and NW-SE structures,
these too are often associated with mineralisation. Re-interpretation of
geophysical data further verified the structure's presence enhancing the
property's prospectivity. Extensive exploration was conducted along this
feature in 2022 with over 500 soil samples being collected predominantly along
eleven lines on average 400m apart, orthogonal to the inferred 4km shear.
Prospecting also identified sheared metasedimentary / mafic volcanic boulders
anomalous in trace elements in the area interpreted to contain the Hemlo style
shear zone. Ground reconnaissance identified 'Hemlo-look-alike rock' in the
form of an angular boulder which returned anomalous gold value of 0.7ppm Au,
see Figure 21
Figure 22 the Esa block showing the inferred shear with the 2022 / 2023 soil
lines as well as the location of the 0.7ppm Au boulder sample.
The results of the initial soil sampling defined a geochemically anomalous
zone mimicking the inferred position of the shear. Assay results were
sufficiently encouraging for further sampling in the 2023 field season when
'infill' sampling lines were conducted in two programmes again totalling over
500 samples. The assay results for the last programme further validate the
presence of a geochemically anomalous structure displaying elevated gold and
pathfinder element such as arsenic molybdenum and antimony, see Figure 22.
Future work is intended follow up on the shear zone and other structures
identified, as well as to include trenching / stripping in the 'boulder'
location.
The property is covered by a valid Exploration Permit, (granted in October
2023) and is required for 'invasive' exploration such as trenching, stripping,
and drilling.
McKellar
The McKellar property, comprised 66 claims, covers 12.5km². In February 2023
FCMC staked a further eight (8) claims, each of 400ha contiguous in the south
of the McKellar block. McKellar was the second largest of the claim blocks
that formed the Power Metals claim acquisition.
McKellar is situated in prime geological terrain within the Coldwell complex.
Located to the west of Generation Mining's Palladium Project and is roughly 25
kilometres by Highway 17 from the town of Marathon, the main service centre
for Barrick's Hemlo mine. McKellar has a number of historic 'showings' with
significant values in precious and base metals as well as Rare Earth Elements
('REE'), see Figure 23.
Figure 23 Shows the McKellar claim block (pre-2023) in a district scale
geological setting with historic showings, including the McKellar trend which
contains contemporary and historically significant zinc grades as well as high
grade silver.
Historic showings include:
· Alvey occurrence: 4 historic drill holes in the vicinity but no
assays available, however separate grab samples returned 0.28 g/t Au, 37.98
g/t Ag & 146 g/t Cu. See figure 1.
· Goldbar Lake prospect: Drill Hole P-2: 19.20-19.66m: 1.09% Copper
(Cu) & 6.54% Zn and 20.88-21.98m: 0.56 g/t Gold (Au), 60.1 g/t Silver
(Ag), 4.73% Cu & 0.98% Zn.
· The Little Pic (silver) 'mine' (McKellar trend): discovered in
1875, almost 100 years later Noranda reported a channel sample of 618.0 g/t
Ag and a trench sample of 1.1m @ 32.3% Zn & 7.1% Pb, with VMS style
mineralisation reportedly traced over a 600m strike 'McKellar Trend'.
· Several diatremes, anomalous in REE have been discovered in the area,
included is the McKellar diatreme the historic samples reported were highly
anomalous.
During the 2022 field season, over 100 grab (rock chip) samples were collected
as well as six lake sediment samples. Mapping and sampling work predominantly
took place on the McKellar trend and nearby Alvey occurrences, see Figure 24,
as well as initial work on the REE diatreme in the southern sector.
Figure 24 showing the McKellar trend which contains contemporary and
historically significant zinc grades as well as high grade silver and FCM
samples reporting over 4% Zn and over 2oz / tonne Ag as well as anomalous Pb.
The reported results from the 2022 season's campaign are encouraging (sample
B416205 see figure 25) and confirm that more work is required to further
extend and detail the potential of this trend. For example, 400 meters along
strike to west-northwest, similar rock returned 1.36% Zn, 635 ppm Pb, 11.6 ppm
Ag, and 550 meters along strike to west-northwest of the shaft, mafic
volcanics returned 590 ppm Zn. Furthermore, the 'Alvey trend', which is in
close proximity reported anomalous: 382 ppm & 417 ppm Zn.
Figure 25 sample B416205 which reported 4.82% Zn, 0.22% Pb, 80ppm Ag.
The geological work at McKellar, to date and supported by the historical
review, indicates that zinc mineralization occurs close to a
volcanic-sedimentary (sheared) contact.
The work by FCM has shown that the potential of the McKellar trend is valid.
Furthermore, it is not 'closed off' and therefore the possibility exists to
extend the known mineralisation to the northwest.
A future field campaign will not only seek to extend the McKellar base metal
trend but also explore the other showings including Goldbar Lake.
Results from limited initial samples collected by FCM from the diatreme in
2022 were anomalous, being five times crustal levels in a number of the REE
samples assayed. The potential for higher values is considered realistic, in
line with historical values as the available sample sites were not optimal and
the original sample sites could not be identified.
Field work in 2023 was confined to further channel sampling of the McKellar
diatreme which occupies a topographic low and occurs within a north trending
linear structure. The breccia may have been emplaced within a shear or fault
zone, however, geologic data supporting this possibility are lacking.
In total 18 sawn channel samples of approximately 1m were collected across the
exposed diatreme, in addition 5 grab samples were also collect for assay.
In 2023 further prospecting, (5 bedrock grab samples) geological mapping as
well as 18 sawn channel samples (see figure 25) of approximately 1m were
collected across the exposed diatreme, results of which and other historical
assays are included in the following table, showing the highest two samples
from FCM's recent sampling.
Element Historical assay results for selected elements (including REE's), McKellar FCM recent sampling showing two highest values, all ppm
Creek Diatreme:
Gold Au 25 ppb N/A
Platinum Pt 17 ppb N/A
Neodymium Nd 300 ppm 259, 205
Lanthanum La 400 ppm 362, 253
Beryllium Be 2.8 ppm 5 all others BLD
Cerium Ce 513 ppm 653, 503
Yttrium Y 214 ppm 287, 193
Strontium Sr 1280 ppm 1410, 1360
Thorium Th 180 ppm 145, 140
U308 38 ppm U: 32.8 23.4
Table showing the results of the reported historical and recent sampling by
FCM.
Figure 26 showing channel sample sawn into the diatreme outcrop and in the
process of being sampled.
Further work on the diatreme will include additional channel sampling and once
an exploration permit is granted, possible stripping if ground access allows.
Whilst only limited field work was conducted in 2023, this and the 2022 work
generated assessment credits that cover the property into 2024.
An exploration permit, required for 'invasive' exploration such as trenching,
stripping, and drilling was submitted (with support of the relevant First
Nations), to the provincial mining department in 2023 and granted for a
three-year period until November 2026.
Enable
This property comprising 41 claims covers around 8.7km² it is located to the
north of the town of Terrace Bay, which is on Interstate 17.
Significantly the property includes an important geological feature of
interest: the contact between the Terrace Bay batholith (to the southeast) and
the mafic volcanics and iron formation. These have been intruded by
quartz-feldspar porphyry dykes, an important mechanism for mineralisation. The
contact transects the Enable property from the northeast to southwest corners
of the claim block and its inferred strike extent is underexplored within the
property, see Figure 27.
Figure 27 showing the Enable claim block with Ontario Mineral Inventory
('OMI') showings along the geological contact.
There are numerous showings located in the surrounding claims, with 30+ gold
occurrences in the district being associated with this contact.
Less than 2 kilometres off property along this contact are the historic
samples of the Acker G Vein (believed to be located at the Hays Lake showing
with 9.64g/t Au and 20g/t Ag) in a 3-metre-wide shear zone which trends
northeast and may extend onto the Enable property. Also, to the southwest is
the 'Joa Walton' occurrence with 192.7g/t Au and 401g/t Ag. Again, this
important trend when extrapolated across the property contains the historic
Perch Lake West showing with a reported 1.85g/t rock chip sample.
These known gold occurrences, as well as the presence of historical gold on
the property, are substantive evidence to support the inferred continuation of
the mineralised geological structure/ contact through the Enable claim block.
This provides very positive encouragement for the potential for further
significant gold assays in the future.
The mineralised contact between the mafic rocks and the Terrace Bay batholith
is the main vector of interest and this contact dissects the property.
Over two field visits to the property in 2022, reconnaissance identified
several quartz veins and over 80 rock samples were collected. The assays
received have not only confirmed and enhanced the West Perch Lake showing
but identified a new area of quartz veining containing gold values in excess
of 7ppm, see Figure 28 and the Table which follows.
Figure 28 quartz vein from Sample 697925, assaying 7.02ppm Au, with minor
pyrite and galena in sheared, silicified granodiorite containing 1-2%
disseminated pyrite.
Of the samples collected, almost half contain anomalous (>0.1ppm) gold
values, with over 10 samples containing >0.3ppm Au. Several samples
returned anomalous to significant silver values. The higher silver values are
associated with the elevated gold assays. For example, Sample 697926 contained
83ppm Ag, and in a separate sample 5.2ppm Au also reported 57ppm Ag.
Sample no Au Ag PPM As PPM Co PPM Cu PPM Li PPM Mo PPM Pb PPM Zn PPM
PPB
E5830178 5250 56.9 1.5 7 27 8 2 1970 1120
E5830177 2040 16.2 26 47 294 39 0.5 22 133
E5830176 2040 15 6 23 13 7 24 12 38
697930 370 2.9 3 3 5 2 3 1.5 16
697927 463 3.1 4 9 35 13 0.5 39 72
697926 859 4.6 1.5 14 214 23 0.5 27 90
697925 7040 83.4 1.5 4 36 6 2 2840 1350
697924 1260 9.4 1.5 10 87 13 0.5 211 48
697923 672 3.6 1.5 2 4 2 1 140 9
697922 1700 16.4 1.5 2 9 3 1 360 139
697913 161 4.4 1.5 4 16 5 77 22 25
697912 158 6 1.5 7 16 5 3 41 29
697911 202 10.9 1.5 8 50 4 14 140 24
697901 122 0.4 1.5 28 128 12 0.5 1.5 151
697873 486 1.2 1.5 13 62 17 0.5 5 35
697856 473 9.5 1.5 10 41 6 12 132 30
697855 336 2.8 1.5 4 13 4 30 102 25
The table shows a selection of the higher gold reporting samples with other
associated elements, note Au is reported in ppb and the higher silver values
are associated with high gold values.
FCM undertook a Winter 2022/23 exploration campaign with 6 lake sediment
samples collected, results were not significant.
Several soil lines and were completed for 88 samples a well as limited
prospecting, with 20 grab rock samples in the areas of the historic and new
discoveries.
Results did not identify any new 'showings' and whilst the soil samples were
anomalous no clear trend was identified. Future work will involve further,
detailed prospecting in the vicinity of the 7ppm Au sample, along the inferred
contact as well as possibly extending the soil lines east and west.
Figure 29 showing the project scale detail of the historic (Perch Lake West is
where the FCM 2.04ppm samples are located) and new sample points including the
7.02ppm Au / 83ppm Ag as well as the locations of lake sediment samples and
the soil lines completed.
Assessment credits from 2022 field work extended into 2023 and with the work
undertaken in 2023 the property is in good standing into 2024.
An exploration permit, required for "invasive" exploration such as trenching,
stripping, and drilling was submitted in 2023 to the Provincial authorities,
with the support of the two relevant First Nation groups and was granted in
November 2023, valid for three years.
Coco East
The Coco East block of 30 claims covering ~6.3km² is located on the eastern
sector of the Big Duck Lake Porphyry, this claim block was part of the Power
Metals acquisition pre-IPO. Big Duck Lake Porphyry contains several historic
showings as well as the Coco Estelle deposit. This porphyry, as well as other
similar intrusions, are strongly spatially associated with Archean lode gold
deposits.
There is only one showing located within the Coco East property boundary, the
Big Birch Occurrence. Two pits are reported with a 5m spacing, striking
east-west. The main pit exposes a 10cm-wide quartz and calcite vein and
contains pyrite and possible chalcopyrite mineralisation, and historic assay
results have returned values of 0.56 g/t Au and 2.83 g/t Ag.
Figure 30 showing the regional setting of the Coco East claim block with OMI
showings.
No field work was conducted during the season in 2023 but over the winter of
2022/23 six lake sediment samples were collected, see Figure 30.
The assessment credits accrued from 2022 field work extend into 2024.
Background
During the 2022 field season, FCM collected 47 rock samples predominantly in
the area of the Big Birch Occurrence and historical drilling. Assays returned
gold and silver grades that were generally in order of the historic samples,
see Figure 31.
Figure 31 showing the prospective areas of Coco East and the areas of work
undertaken by FCM, note the geophysical anomaly in the northwest of the block.
Future work will focus on an exploration programme to cover other areas of the
block, particularly the geophysical anomaly to the north of the property,
which is interpreted as a potential continuation of the structure hosting Coco
Estelle.
Magical
Located only 9km northwest of the Barrick Hemlo gold mine, these 14 claims
which are 2.9km² and are also situated on a compelling geological contact
which potentially represents a district scale geological contact, which could
be an extension of one of the inferred North Limb shears, (see Figure 02).The
enigmatic 'Valley Float' less than 1km off the property boundary to the
northeast has reported >16g/t Au, whilst the Gowan Lake showing to the
southwest, also on the inferred contact, reports ~1.5g/t Au and the Kusins
showing also associated with the contact reports 70.1 g/t Ag, 10.7% Zn and
8.9% Pb, see Figure 32.
While only a small land package, Magical's geological location gives weight to
its potential. Exploration in 2022 generated sufficient credits to keep the
property in good standing for several years, accordingly no work was conducted
in 2023 whilst FCM focussed exploration on other properties.
Figure 32 showing the Magical claim block in a geological district scale with
pertinent 'showings'.
Background
Geologically, the area contains a northeast trending sequence of clastic
sediments, plus subordinate amphibolite. These are bounded by the Gowan Lake
Pluton in the northwest and the Cedar Lake Pluton in the southeast. The
contact between the Gowan Lake Pluton and metavolcanics is found in the east
and southern areas of the property. On the basis of nearology / vector, this
is considered a potential host for gold mineralisation.
During the 2022 field season 11 rock chip samples and 56 soil samples were
collected out of a helicopter supported 'fly' camp. The latter was analysed by
the mobile metal ion ("MMI") methodology, see Figure 33.
Figure 33 MMI sampling on the Magical property
The anomalous molybdenum ("Mo") and arsenic ("As") close to the northwest end
of the MMI survey at the contact of the Gowan Lake Pluton is of interest and,
given the gold occurrence to the northeast and southwest, on trend (but off
property). This is a significant encouragement for the property's potential.
For planned future work it is proposed that the soils lines are extended as
well as further lines in the southwest to validate the anomalism associated
with the contact / shear as well as prove strike continuity.
Sugar Cube
The Sugar Cube claim block of 205 claims, covering ~43km², is contiguous to
the north-west of Silver Lake's 1.6Moz+ Sugar Zone gold mine. Sugar Cube was
one of the 'seed' properties that formed the pre-IPO package. Previous workers
interpreted from the limited geological information that the property could
potentially contain the remnants of a (subparallel, arcuate) greenstone belt.
Whilst virtually no ground-based exploration was conducted in 2022, or 2023,
the air magnetic/ VTEM geophysics survey undertaken in early 2023 provided
sufficient credits to maintain this entire block through 2023 and into 2024.
Figure 34 the Sugar Cube property with the government regional magnetics as
background as well as district historical showings.
During historic (2021) ground reconnaissance by FCM, sulphide-rich
metasediments that were previously unmapped were located (off property).
Subsequently, greenstone boulders were located on the claim block by FCM.
However, generally, the property is covered by overburden masking outcrop. The
lack of exposure determined that the best next step for exploration was a
geophysical survey.
Accordingly, in Q1 2023, a 578-line km geophysics survey comprising a
helicopter-borne low-level 100m line spacing magnetic as well as
electromagnetic ("EM") survey was completed.
Geophysical data were acquired along N-S (N00-N180) oriented transverse lines
spaced 100 m apart and control lines-oriented E-W (N090-N270) and spaced 1000
m apart. The helicopter maintained a mean altitude of 86 m above ground level
with an average survey speed of 32.0 m/s (115 km/hr). The TDEM transmitter
(Tx) loop was suspended approximately 49 m below the helicopter (37 m nominal
terrain clearance) and receiver (Rx) coil and magnetic sensors suspended
approximately 25 m above the Tx loop (61 m nominal terrain clearance).
The interpretation by PGW determined the future field work to 'ground-truth'
the identified anomalies, See Figure 35.
Figure 35: Interpretation provided by PGW on the EM survey conducted on the
Sugar Cube property.
The survey was successful in so much no obvious remnants of green stone were
evident. However, the central sector of the block merits further work and will
be a focus for a future exploration programme. Other sectors will not be
apportioned assessment credits and it is likely that those mining claims will
lapse. With this is mind, the Company is impairing the property to zero value.
Summary, strategy, and conclusions
First Class Metals, through its Canadian subsidiary, controls nine claim
blocks totalling ~230km² in northwest Ontario, Canada. Seven of the nine
blocks are 100% owned. Two claim blocks (North Hemlo and Sunbeam) account for
well over half of the total area.
All of the seven IPO properties as well as the properties acquired, have
sufficient assessment credits generated by field work in 2023, to keep them in
good standing through to proposed field work in 2024. The Sugar Cube block is
now impaired as a result of the magnetic survey results. Regardless FCM holds
funds required to keep all the claims in good standing.
FCM initiated a systematic diligent exploration programme covering the 'Big
four' (North Hemlo, Esa, Sunbeam and Zigzag), properties in 2023. The results
were sufficiently encouraging to warrant further follow-up exploration in the
upcoming field season. Particularly successful was the drilling at Zigzag and
the stripping at Sunbeam, notwithstanding the 'new discovery' on the Dead
Otter trend. However, it must be noted that most properties explored still
have areas requiring prospecting and whilst the cornerstone of the exploration
is gold, FCM contains in its portfolio precious, base (battery) and critical
(lithium) mineral targets.
Six of the properties achieved active Exploration Permits in 2023, this is a
veritable accomplishment in only the second year of listing. Furthermore, one
property, Zigzag, was acquired and brought to drilling status with a notable a
drill programme being conducted within the year.
Whilst the annual commitment to maintain the claims is circa CAD$450,000, this
is not a required spend given that credits from 2022 carry over to the 2023
season and in some instances into 2024. FCM intends to build off the positive
exploration results and progress the exploration of the properties by drilling
where permitting, funding and logistics allow, to a monetising event.
FCM has a business model / strategy to assess, value add and develop the
properties towards either a sale, joint venture, or relinquishment event. It
is currently not the Company's stated aim to become a producer. Priorities
will be geared toward the completion of first-pass exploration (realistically
drilling) of the principal properties in order to fully evaluate the
portfolio, both on the merits of the properties and a ranking process.
The 2023 field season's activities focused on bringing four properties to
drill ready status, these being Sunbeam, Zigzag, Esa and North Hemlo. In the
meantime, GT Resources (Palladium One) continued the exploration / drilling of
the West Pickle Lake project areas and produced a National Instrument 43-101,
as required under the JV terms.
The Company's strategy remains on track: to identify potential, value add,
then monetise by JV or by sale.
STRATEGIC REPORT
Key Performance Indicators
a) Financial
As a listed company, the primary key performance indicator of the Group is its
share price on the London Stock Exchange (LSE) and is provided below:
31-Dec-2022 1 (#_ftn1) 31-Dec-2023 Change
£ £ %
Market Capitalisation £11.64m £5.00m
Share Price 16.75p 6.1p -63.5
Since the Company's listing the Company's share price on the LSE has been
constantly monitored by the management.
b) Non-financial
Due to the nature of the business of the Group typical non-financial KPI's
(such as customer retention rate, conversion rate, production efficiency
measures etc.) are not applicable to us. Further, while the Group has an
effective ESG policy in place, due to unavailability of data such KPI's could
not be measured and assessed for the relevant time period. For further details
regarding the Group's ESG policy, please see the ESG section of this report.
The principal risks and uncertainties
The principal risks and uncertainties of the Group 2 (#_ftn2) are outlined
below.
A majority of the Group's operating costs will be incurred in US and Canadian
dollars, whilst the Group has raised capital in £ Sterling
The Group will incur exploration costs in US and Canadian Dollars, but it has
raised capital in £ Sterling. Fluctuations in exchange rates of the US Dollar
and Canadian Dollar against £ Sterling may materially affect the Group's
translated results of operations. In addition, given the relatively small size
of the Group, it may not be able to effectively hedge against risks associated
with currency exchange rates at commercially realistic rates. Accordingly, any
significant adverse fluctuations in currency rates could have a material
adverse effect on the Group's business, financial condition and prospects to a
much greater extent than might be expected for a larger enterprise.
Exploration, Development and Operating Risk
Resource exploration and development is a speculative business, characterised
by a number of significant risks including, among other things, unprofitable
efforts resulting not only from the failure to discover mineral deposits but
also from finding mineral deposits that, though present, are insufficient in
quantity and quality to return a profit from production. Exploration and
development work is the Group's sole business activity.
This risk is accentuated where exploration activity is not carried on as an
ancillary activity to a developed business producing operating cash flows from
commercial quantities of saleable material from operational activity which can
be used to mitigate this risk. The marketability of minerals acquired or
discovered by the Group may be affected by numerous factors that are beyond
the control of the Group and that cannot be accurately predicted, such as
market fluctuations, the proximity and capacity of milling facilities, mineral
markets and processing equipment, and such other factors as government
regulations, including regulations relating to royalties, allowable
production, importing and exporting minerals and environmental protection, the
combination of which factors may result in the Group not receiving an adequate
return of investment capital.
The business of exploration for minerals and mining involves a high degree of
risk. Few properties that are explored, even those demonstrating initial
potential, are ultimately developed into producing mines. There is no
assurance that the Group's mineral exploration and development activities will
result in any discoveries of commercial mineral bodies.
The long-term profitability of the Group's operations will in part be directly
related to the costs and success of its exploration and development programs,
which may be affected by a number of factors. In recent years, both metal
prices and publicly traded securities prices have fluctuated widely.
The Group is not currently generating revenue and will not do so in the near
term
The Group is an exploration company and will remain involved in the process of
exploring and assessing its asset base for some time. The Group is unlikely to
generate revenues until such time as it has made a commercially viable
discovery. Given the early stage of the Group's exploration business and even
if a potentially commercially recoverable reserve were to be discovered, there
is a risk that the grade of mineralisation ultimately mined may differ from
that indicated by drilling results and such differences could be material.
Accordingly given the very preliminary stages of the Group's exploration
activity it is not possible to give any assurance that the Group will ever be
capable of generating revenue at the current time.
The Group will need additional financial resources if it moves into commercial
exploitation of any mineral resource that it discovers
Whilst the Group has sufficient financial resources to conduct its planned
exploration activities, meet its committed licence obligations and cover its
general operating costs and overheads for at least 12 months, the Group will
need additional financial resources if it wishes to commercially advance any
mineral resource discovered because of its exploration activity.
The Group has budgets for all near and short-term activities and plans,
however in the longer term the potential for further exploration, development
and production plans and additional initiatives may arise, which have not
currently been identified and which may require additional financing which may
not be available to the Group when needed, on acceptable terms, or at all. If
the Group is unable to raise additional capital when needed or on suitable
terms, the Group could be forced to delay, reduce, or eliminate its
exploration, development, and production efforts.
The Group is unaware of any further risks that the business of the Group may
be subject to under prevailing market conditions.
Going Concern
As a junior exploration company, the Directors are aware that the Group must
seek funds from the market in the next 12 months to meet its investment and
exploration plans.
The Group's reliance on a successful fundraising presents a material
uncertainty that may cast doubt on the Group's ability to continue to operate
as planned and to pay its liabilities as they fall due for a period not less
than twelve months from the date of this report.
The Group successfully raised £1,918,623 in the year ended 31 December 2023
through a combination of issuing new shares and warrant conversions. As at the
year-end date the Group had total cash reserves of £140,802 (2022: £712,715)
The Directors are aware of the Group's reliance on fundraising within the next
12 months and the material uncertainty this presents but having reviewed the
Group's working capital forecasts they believe the Group is well placed to
manage its business risks successfully providing the fundraising is
successful.
Section 172 (1) Statement
The First Class Metals Plc Board is cognisant of its legal duty to act in good
faith and to promote the success of the Group for the benefit of its
shareholders and with regard to the interests of stakeholders and other
factors. These include the likely consequence of any decisions we make in the
long term, the need to foster relationships we have with all of our
stakeholders; the impact our operations have on the environment and local
First Nation communities, and the desire to maintain a reputation for high
standards of business conduct.
The Board takes a long-term approach to creating and realising value for the
shareholders and is aware of the capital and time required in order to develop
a resource projects. All of the Group's key assets are early-stage
exploration.
The Directors, both individually and collectively, believe, in good faith,
that throughout the year and at every meeting of the Board and management when
making every key decision, they have acted to promote the success of the Group
for the benefit of its members as a whole, as required by Section 172 of the
Companies Act 2006, having regard to the stakeholders and matters set out in
section 172(1) of the Companies Act 2006. The Directors' Section 172 Statement
follows.
Section 172 of the Companies Act is contained in the part of the Act which
defines the duties of a director and concerns the "duty to promote the success
of the Company".
Section 172 adopts an 'enlightened shareholder value' approach to the
statutory duties of a company director, so that a director, in fulfilling his
duty to promote the success of the company must act in the way he considers,
in good faith, would be most likely to promote the success of the Company for
the benefit of its members as a whole, and in doing so have regard to other
specified factors insofar as they promote the Company's interests.
The Board of FCM recognises its legal duty to act in good faith and to promote
the success of the Group and the Company for the benefit of its shareholders
and with regard to the interests of stakeholders as a whole and having regard
to other matters set out in Section 172. These include the likely consequences
in the long term of any decisions made; the interest of any employees; the
need to foster relationships with all stakeholders; the impact future
operations may have on the environment and local communities; the desire to
maintain a reputation for high standards of business conduct and the need to
act fairly between members of the Company.
The Board recognises the importance of open and transparent communication with
shareholders and with all stakeholders, including landowners, First Nation
communities, and regional and national authorities. We seek to maximise the
industry's benefits to local communities, while minimising negative impacts to
effectively manage issues of concern to society. Shareholders have the
opportunity to discuss issues and provide feedback at any time.
The application of the Section 172 requirements can be demonstrated in
relation to the Group operations and activities during the past year as
follows.
Having regard to the likely consequences of any decision in the long term
The Group's purpose and vision are set out in the Chairman's Statement and in
this Strategic Report. The Board oversees the Company's strategy and is
committed to the long-term goal of the development of the Ontario exploration
projects. The activities towards that goal are described and discussed in the
Strategic Report. The Board remains mindful that its strategic decisions have
long-term implications for the progression of all these properties, and these
implications are carefully assessed.
Having regard to the need to foster the Group's business relationships with
others
The Group operates as a mineral exploration business, without any regular
income and is entirely dependent upon new investment from the financial
markets for its continued operation. The Board values the benefits of
maintaining strong relationships with key partners, contractors, and
consultants. This is discussed in more detail elsewhere in this Strategic
Report.
Having regard to the interests of the Group employees
The Group currently has no full-time employees and is managed by its directors
and a small number of associates and subcontract staff. The Board takes steps
to ensure that the suggestions, views, and interests of the Group's personnel
are considered in decision-making.
Having regard to the desirability of the Company maintaining a reputation for
high standards of business conduct
The Board is committed to high standards of corporate governance, integrity,
and social responsibility and to managing the Company in an honest and ethical
manner, as further discussed in the Corporate Governance Report. The Directors
strive to apply ethical business practices and conduct themselves in a
responsible and transparent manner with the goal of ensuring that FCM
maintains a reputation for high standards of business conduct and good
governance.
Having regard to the impact of the Company's operations on the community and
the environment
The Board takes a broad range of stakeholder considerations into account when
making decisions and gives careful consideration to any potential impacts on
the local community and the environment. The Board strives to maintain good
relations with the local community, especially with the First Nations peoples
of Ontario.
We recognise the safety and well-being of our employees, local communities,
and other stakeholders as a non-negotiable priority. Our commitment to high
environmental, social and governance (ESG) standards is central to maintaining
our license to operate, to create value for all stakeholders and to ensure
commercial success. Our operations are guided by an acute awareness of the
role we play as a company in meeting the UN's Sustainable Development Goals
(SDGs), including the critical role of strategic minerals in supporting global
climate action and complementing resource development in Canada.
As a result, ESG is at the centre of everything the Group undertakes. The
Group is dedicated to exploring for precious and battery/base metals in a
socially and environmentally responsible way in an industry that will play an
essential role in the transition to a lower-carbon economy through
underpinning the supply chain for sustainable battery and electric vehicle
manufacturing as well as other industrial growth in Canada.
In this way, the Group aims to play an important role in helping Canada meet
its emissions reduction targets. FCM aims to comply with all relevant UK and
Canadian standards, as well as accepted international guidelines, including
strict adherence to the health, safety and environmental standards and
regulations, as well as the applicable elements of the Equator Principles. The
Group will also endeavour to provide stakeholders with clear insights into our
operations to increase assurance regarding the ESG and health and safety
aspects of our business.
Our policy consists of five pillars:
1) responsible stewardship,
2) strong partner for local communities (First Nations),
3) an enabler of energy transition,
4) ensuring safe workplaces and operations, and
5) strong governance and an inclusive culture.
Our broad commitments are outlined below. Throughout all operations and our
activities, we aim to:
· Play a positive and critical role in the green energy transition.
· Operate in an environmentally responsible manner.
· Promote diversity Inclusion and equality.
Our full ESG report is available on our website.
Greenhouse Gas (GHG) Emissions
The Company is aware that it needs to measure its operational carbon footprint
in order to limit and control its environmental impact. The extent to which
these activities together with the Group's administrative and management
functions result in greenhouse gas emissions is impracticable to estimate and,
in any event, less than the amount reportable under the Energy and Carbon
Regulations 2018. Additionally, the Company will only measure the impact of
its direct activities, as the full impact of the entire supply chain of its
suppliers cannot be measured practically.
Board, Shares and Related Parties
Having regard to the need to act fairly as between members of the Group, the
Group has only one class of share in issue and all shareholders benefit from
the same rights, as set out in the Articles of Association, and as required by
the Companies Act 2006. Since the IPO a Shareholder Agreement has been in
place with Power Metal Resources PLC, the largest shareholder, which provides
that FCM will maintain an independent Board and any transactions between Power
Metal Resources and FCM will be at an arm's length basis. The Board recognises
its legal and regulatory duties and does not take any decisions or actions,
such as selectively disclosing confidential or inside information, that would
provide any shareholder with any unfair advantage or position compared to the
shareholders as a whole,
TCFD Compliance Statement
CLIMATE RELATED FINANCIAL DISCLOSURES
Introduction
The Board recognises that transparency regarding climate-related risks and
opportunities is critical to maintaining the trust of our stakeholders and
allows our investors to understand the implications of the Group's activities
on climate change. The Board's consideration of key environmental risks is
included under the principal risks and uncertainties section of the Director's
Report. The Board also presents the following synthesis of its adoption of the
recommendations of the Task Force on Climate-related Financial Disclosures
(TCFD), structured into four sections: Governance, Risk Management, Strategy
and Metrics and Targets.
Governance
The Board recognise that operating responsibly, which includes minimizing the
environmental impact of our operations, is fundamental to the long-term
success of the Group. We believe building a better future involves embedding
climate awareness throughout our organisation, starting at the top.
The Board oversees the management of specific risks and opportunities,
including climate-related risks and opportunities. The senior management team
provides regular updates to our Board on their activities, and, in addition,
the Board reviews the risks associated with the Group's operations throughout
the year.
Risk Management
The Board recognises that climate change risk is a global issue that may
impact how we run our business, both today and in the future. As such, we
continue to look for ways to improve our understanding of climate-related
risks. However, although the impact of climate change is extremely low at this
stage in the Group's development, we are conscious that "doing nothing" isn't
an acceptable response to the impact climate change may have on the business
in the future. We are therefore working to integrate climate risk variables
into our overall risk management process and establish formal
multi-disciplinary processes.
Strategy
The Group operates from a corporate head office in the UK but holds metal
exploration assets in Ontario, Canada. The nature of these assets includes
early-stage exploration with limited invasive impact. The Board is conscious
of the inherent environmental risks associated with metals exploration.
However, the Board actively encourages its contractors to operate within
international environmental guidelines and to perform its activities using the
most up-to-date equipment.
Metrics & Targets
The Board is committed to reducing its impact on the environment in all
aspects of its business activities in which it operates. The Board engages
with all its key stakeholders and partners and encourages the reduction of CO2
emissions throughout the value chain to promote an environment that actively
strives towards achieving 'net zero' by 2035. However, at this stage in the
Group's development there are no formal metrics or targets to measure the
Group's emissions against, but the Board continues to review the need to
implement metrics & targets.
This report is approved by the Board on June 132024 and signed on its behalf by:
Marc J. Sale
CEO
CORPORATE GOVERNANCE REPORT
Introduction
The Company is considered as a 'small cap' company listed on the main market
of the London Stock Exchange. It has a board of directors consisting of 4
directors. Of these directors, 2 are considered as Executive directors and 2
are considered Independent Non-Executive Directors. James Knowles, the
Executive Chairman, is the only full-time employee of the Company. In order to
meet its work-related requirements, the company hires contractors on a
periodic basis as and when the need arises.
Considering the small size of the Company, the Board believes that it can
perform a majority of the functions required by it or through its direct
supervision. The Company has two committees: the Audit Committee and the
Remuneration Committee which are constituted mainly by the two Independent
Non-Executive Directors.
Further information on the Boards administrative and management along with
information about each of the two Board committees and its composition,
function as well as their respective activities for the year 2023 can be found
below in this Corporate Governance Report.
Chairman's Statement
First Class Metals seeks to operate with a high degree of good corporate
governance practices at its core. Corporate governance refers to the set of
processes, policies, and procedures that are in place to ensure that a company
operates in a responsible and ethical manner. This includes everything from
financial oversight to the way that we interact with our employees, and other
stakeholders.
Effective corporate governance is crucial to the long-term success of our
Company. By maintaining high standards of transparency, accountability, and
ethical behaviour, we can build trust with our stakeholders and create a
strong foundation for sustainable growth.
To that end, we have established a comprehensive framework for corporate
governance that covers all aspects of our operations. This includes a clear
code of conduct for all employees (currently just the directors), regular
audits and assessments of our financial and operational performance, and
robust systems for risk management and compliance.
We believe that our commitment to corporate governance is a key differentiator
for our Company, and we will continue to invest in this area to ensure that we
maintain the highest standards of integrity and ethical behaviour in all that
we do.
The Chairman takes the lead in ensuring that the various facets of the Company
are functioning in an ethical way compliant with best practices in the
industry. Under the leadership of the Chairman the Company has policies in
place in order to ensure effective corporate governance. These policies are
reviewed annually. They include:
The Board aims to lead by example and do what is in the best interest of the
Company. We operate in remote and developing areas and ensure our employees
and contractors understand their obligations towards the environment and in
respect of anti-bribery and corruption. Regular calls with senior employees
serve to refresh and re-iterate the Company's ethical standards as they apply
to the operational issues that are discussed on that call. All employees are
informed of responsibilities with regard to anti-bribery and anti-corruption
when they join the Company. Contracts with suppliers also reflect these
requirements. Employees are required to treat each other with respect and to
not tolerate any form of discrimination.
Anti-Bribery Policy
The anti-bribery policy of the Company aims to ensure that the Company and its
employees, agents, and business partners comply with all relevant anti-bribery
laws and regulations. The policy prohibits any form of bribery, including
giving, offering, promising, or receiving bribes, and outlines the procedures
for reporting and investigating any suspected violations of the policy. The
policy also emphasizes the importance of due diligence in the selection and
monitoring of business partners, and provides guidance on gifts, hospitality,
and donations. The Company's commitment to anti-bribery measures is often
reinforced by training, regular risk assessments, and reviews of the policy's
effectiveness.
Whistle Blower Policy
The whistle-blower policy of the Company is designed to encourage employees
and others to report any suspected wrongdoing, including illegal or unethical
activities, without fear of retaliation. The policy outlines the procedures
for reporting such concerns, including options for confidential reporting, and
ensures that all reports will be investigated in a fair and objective manner.
The policy also emphasizes the Company's commitment to protecting the
confidentiality of whistle-blowers and to taking appropriate action against
any retaliation. The Company typically provides training and guidance to its
employees and other stakeholders to promote awareness of the policy and its
importance.
Environmental, Social, and Governance (ESG) Policy
The ESG policy of the Company outlines its commitment to environmental,
social, and governance principles and its approach to managing ESG risks and
opportunities. The policy covers a range of issues, including climate change,
energy use, human rights, labour standards, and board diversity. The Company
sets targets and measures its performance against relevant ESG standards and
integrates ESG considerations into its decision-making processes. The Company
also engages with stakeholders, including investors, suppliers, and
communities, to promote transparency and accountability, and to identify and
address emerging ESG issues. The Company's ESG policy demonstrates its
commitment to responsible and sustainable business practices, which can
contribute to long-term value creation and resilience.
Equality and Diversity Policy
The Board is committed to our equality, diversity and inclusion policies. The
Company actively promotes equality, diversity and inclusion, and proactively
removes and addresses any activities or behaviours that may jeopardise this
policy.
The Company aims to create an environment where all stakeholders can work
harmoniously, feel valued, appreciated, and included, irrespective of race
ethnicity, culture, gender, skin colour, sexual orientation, marital status,
religion, disability, ability, educational background, family background,
political background, health or representative of any community.
The Company is an equal opportunity employer, which allows equal opportunity
for employment and progression in the organisation on the basis of ability,
qualifications, and aptitude for the work. Every employee shall be treated
equally and have the right to a harmonious work environment where an
individual is treated fairly and with dignity and respect.
The Board are committed to equality, diversity, and inclusion. While is no
formal diversity policy in place due to the current size of the Group, the
Directors remain committed to diversity among our staff and leadership team,
and this is revisited each year. The Company actively promotes equality,
diversity, and inclusion, and proactively removes and address any activities
or behaviours that may jeopardise this commitment. The Company aims to create
an environment where all stakeholders can work harmoniously, feel valued,
appreciated, and included, irrespective of race, ethnicity, culture, gender,
skin colour, sexual orientation, marital status, religion, disability,
ability, education background, family background, political background, health
or representative of any community.
Compliance with the Quoted Company Alliance Code
In addition to the above, although the Company is not required to comply with
the UK Code of Corporate Governance because the Company does not have a
Premium listing, compliance with the Quoted Company Alliance Code is being
undertaken on a voluntary basis to the extent it is considered appropriate
considering the size of the Group. In specific, the Group has adopted and
complies with the following principles:
Principle One: Establish a strategy and business model which promote long-term
value for shareholders.
The Board implements a well-defined strategy that aims at securing long-term
growth for the shareholders. The details of the same can be found in the
Strategic Report.
Principle Two: Seek to understand and meet shareholder needs and expectations.
The Board is committed to maintaining good communications with its
shareholders and with investors with a view to understanding their needs and
expectations. The Board and, in particular, the Chairman, maintain close
contact with many of the shareholders.
All shareholders are encouraged to attend the Company's Annual General
Meetings where they can meet and directly communicate with the Board.
The Company publishes an Annual Report, Financial Statements, and Interim
Results. All of which are available at the Company's website. The Company also
provides regular regulatory announcements and business updates through the
Regulatory News Service (RNS) and copies of such announcements are posted to
the Company's website.
Shareholders and investors also have access to information on the Group
through the Company's website, www.firstclassmetalsplc.com
(http://www.firstclassmetalsplc.com/) which is updated on a regular basis, and
which also includes the latest corporate presentation of the Company.
Principle Three: Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
The Company will engage positively and seek to develop close relationships
with local communities, regulatory authorities and stakeholders which are in
close proximity to or connected with its overseas operations and where
appropriate the Board will take steps to safeguard the interests of such
stakeholders.
The Board has adopted detailed ESG, Equality and Diversity, Anti-Bribery and
Whistle-blower policies. The Board plans, in due course, to adopt further
appropriate policies to ensure that the Group's activities are compliant with
best industry practices.
Principle Four: Embed effective risk management, considering both
opportunities and threats, throughout the organisation.
The Board regularly reviews its business strategy and, in particular,
identifies and evaluates the risks and uncertainties which the Group is or
may be exposed to. As a result of such reviews, the Board will take steps to
manage risks or seek to remove or reduce the Group's exposure to them as much
as possible.
The risks and uncertainties to which the Group is exposed at present and in
the foreseeable future are detailed in Principal Risks and Uncertainties in
the Strategic Report.
The Company has a system of financial controls and reporting procedures in
place which are considered to be appropriate given the size and structure of
the Group.
Principle Five: Maintain the Board as a well-functioning, balanced team led by
the Chairman.
James Knowles, the Executive Chairman, leads the Board and is responsible for
the effective performance of the Board through control of the Board's agendas
and the running of its meetings. James Knowles, in his capacity as Executive
Chairman, also has overall responsibility for the corporate governance of the
Company. James Knowles takes an active part in the day-to-day corporate
aspects of the Company. The day-to-day operational running of the Group is
delegated to Marc Sale, the Chief Executive Officer.
The Board holds Board meetings periodically, and at least four times a year,
as issues arise which require the attention of the Board. Prior to such
meetings, the Board's members receive an appropriate agenda and relevant
information and reports for consideration on all significant strategic,
operational and financial matters and other business and investment matters
which may be discussed and considered.
The Board is supported by the Remuneration and Audit Committees, details of
which are set out on below.
Principle Six: Ensure that between them the directors have the necessary up to
date experience, skills and capabilities.
The Directors' qualifications and experience are set out on in the Directors'
Report. The Board believes that the current balance of sector, technical,
financial, operational and public markets skills and experience which its
members have is appropriate for the current size and stage of development of
the Company. The Company Secretary provides advice and guidance, as required,
to the Board on regulatory matters, assisted by the Company's lawyers. The
Directors seek to keep their skills up to date through continuing professional
development and attending relevant courses. Directors from a technical
discipline are encouraged to maintain professional accreditation.
Principle Seven: Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement.
The Board's performance is reviewed and considered in the light of the
progress and achievements against the Group's long-term strategy and its
strategic objectives. However, given the size and nature of the Group, the
Board does not consider it appropriate to have a formal performance evaluation
procedure in place. The Board will closely monitor the situation as required.
Principle Eight: Promote a corporate culture that is based on ethical values
and behaviours.
The Company has established corporate governance arrangements which the Board
believes are appropriate for the current size and stage of development of the
Company.
The Company has adopted a number of policies applicable to directors,
officers and employees and, in some cases, to suppliers and contractors as
well, which, in addition to the Company's corporate governance arrangements
set out above, are designed to provide the Company with a positive corporate
culture. Details of the Board's Policies can be found within this Corporate
Governance Report.
Principle Nine: Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
Whilst the Board has overall responsibility for all aspects of the business,
James Knowles, the Executive Chairman, is responsible for overseeing the
running of the Board and ensuring that Board focuses on and agrees with the
Group's long-term direction and its business strategy and reviews and monitors
the general performance of the Group in implementing its strategic objectives.
The Board has established the Remuneration Committee and the Audit Committee
with formally delegated duties and responsibilities. Further, the Board will
have a Nomination Committee in place in the coming months.
This Corporate Governance Statement will be reviewed at least annually to
ensure that the Company's corporate governance framework evolves in line with
the Company's strategy and business plan.
Principle Ten: Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders.
The Company's approach to communication with shareholders and others is set
out under Principles 2 and 3 above.
Leadership of the Board
The Board comprised of 2 Executive Directors and 2 Non-Executive Directors.
The Board is charged with the leadership of the Company and to ensure its long
terms success. The key responsibilities of the Board include:
Strategy and Planning
The Board is responsible for setting the Company's long-term strategy and
goals.
Risk Management
The Board identifies and assesses the risks associated with the Company's
operations, including financial, legal, and reputational risks.
Financial Oversight
The Board oversees the Company's financial operations, including budgeting,
financial reporting, and auditing.
Corporate Governance
The Board ensures that the Company follows good corporate governance
practices, including transparency, accountability, and ethical behaviour.
Stakeholder Management
The Board considers the interests of all stakeholders, including shareholders,
employees, suppliers, and the community and ensures that the Company's
operations are sustainable and socially responsible.
Monitoring Performance
The Board monitors the Company's performance against its goals and strategy.
It regularly reviews the Company's financial and non-financial performance and
makes necessary adjustments to ensure the Company is meeting its objectives.
Division of Responsibilities
The Board has defined the responsibilities of the Chairman, and the CEO as
follows:
James Knowles, Chairman: The Chairman is primarily responsible for leading the
Board and providing direction for the organisation. The Chairman is
responsible for leading meetings, facilitating effective communication between
members of the Company, setting goals and strategies for the organisation, and
ensuring accountability. He is also directly involved in assisting the CEO on
day-to-day matters
Marc Sale, CEO: The CEO is responsible for the day to day running of the
Company and reports to the Board in which role he is supported by the
Chairman.
Independent Non-Executive Directors
Independent non-executive directors (INEDs) play a crucial role in corporate
governance by bringing an objective and independent perspective to the
boardroom. Their primary responsibility is to act in the best interest of the
Company and its stakeholders by providing oversight, guidance, and strategic
input to the board.
The role of the independent Non-Executive Directors is as follows:
• Provide independent oversight: INEDs are responsible for
providing an objective and independent perspective on the Company's activities
and performance. They scrutinize the Board's decisions and ensure that the
Company is complying with legal and regulatory requirements.
• Monitor and advise on risk management: INEDs monitor the
Company's risk management policies and procedures and advise the Board on
potential risks and their mitigation strategies.
• Review and challenge management decisions: INEDs review and
challenge management decisions to ensure that they are aligned with the
Company's strategic goals and do not pose any risks to the Company's
reputation or financial stability.
• Provide strategic guidance: INEDs bring their expertise and
experience to the Board and provide strategic guidance on matters such as
mergers and acquisitions, capital allocation, and corporate social
responsibility.
• Represent the interests of stakeholders: INEDs represent the
interests of all stakeholders, including shareholders, employees, customers,
and suppliers, and ensure that their views are taken into account when making
decisions.
Andrew Williamson and Marc Bamber are considered to be INEDs of the Company.
Board Support, Meeting, and Attendance
The Board and its Committees meet regularly on scheduled dates. In leading and
controlling the Company, the Directors are expected to attend all meetings and
their attendance for the financial year 2023 is shown in the Directors' Report
section of this Annual report.
The Company Secretary plays a vital role in ensuring good governance,
assisting the Chairman. Procedures are in place for distributing meeting
agendas and reports so that they are received in good time, with the
appropriate information. Ahead of each Board meeting, the Directors each
receive reports which include updates on strategy, finance, including
management accounts, operations, commercial activities, business development,
risk management, legal and regulatory, people and infrastructure and on
investor relations. The Directors may have access to independent professional
advice, where needed, at the Company's expense.
Board Induction, Training and Development
New Directors are provided with a full and tailored induction in order to
introduce them to the business and management of the Company. Throughout their
tenure, Directors are given access to the Company's operations and personnel,
and receive updates on relevant issues as appropriate, taking into account
their individual qualifications and experience. This allows the Directors to
function effectively with appropriate knowledge of the Company.
The Board is satisfied that each Director has sufficient time to devote to
discharging his responsibilities as a Director of the Company.
Re-Election of Directors
All Directors are put forward for re-election on a three-year basis as is
required by the Company's Articles of Association. The composition of the
Board is provided above.
Board Committees
The Board has delegated and empowered two Committees: an Audit Committee and a
Remuneration Committee.
The Company has thus far not formed a Nomination Committee due to the size of
its Board. However, various discussions are progressing, and the Company aims
to have a Nomination Committee in place with Terms of Reference for its
operation in the forthcoming months.
Each Committee has written terms of reference set by the Board, which are
reviewed annually. The Chair of each committee reports to the Board on the
activities of and determinations of such committee. A summary of each
Committee's responsibilities and the work done during the year follows.
Audit Committee Report
Composition of the Audit Committee
The Audit Committee comprises of Marc Bamber (Chair of the committee), James
Knowles and Andrew Williamson. The Board considers all members of this
committee to have the appropriate skills and expertise. See Director
biographies in the Directors' report.
The appointments to the Audit Committee are made by the Board. Only members of
the committee have the right to attend these meetings, however the Executive
Directors or senior financial members of the Company may be invited by the
Committee in order to provide their opinion as required. The external auditor
may also attend the meetings and discuss as required the planning and
conclusions of their work. The committee also calls upon information from
management and consults with the external auditor if required.
The committee meets at least twice a year directly linked to the Company's
half year and full year results. It further meets as required.
Operation of the Committee
The Audit Committee periodically reviews and updates the Terms of Reference in
order to conform to best practices. These are subject to Board approval.
The Committee works to a planned programme of activities, which are focused on
key events in the annual financial reporting cycle and other matters that are
considered in accordance with its Terms of Reference.
The Committee operates within terms of reference approved by the Board,
including:
• Considering the appointment of external auditors.
• Reviewing relationship with external auditors.
• Reviewing financial reporting and internal control
procedures.
• Reviewing the consistency of accounting policies.
An important part of the role of the Audit Committee is its responsibility for
reviewing the effectiveness of the Company's financial reporting, internal
control policies, and procedures for the identification, assessment and
reporting of risk.
The Directors are responsible for internal control in the Company and for
reviewing effectiveness. Due to the size of the Company, all key decisions are
made by the Board. The Directors have reviewed the effectiveness of the
Company's systems during the period under review and consider that there have
been no material losses, contingencies, or uncertainties due to weaknesses in
the controls. A key governance requirement of the Company's financial
statements is for the report and accounts to be fair, balanced, and
understandable. The coordination and review of the Company wide input into the
Annual Report is a sizeable exercise performed within an exacting time frame.
It runs alongside the formal audit process undertaken by external auditors and
is designed to arrive at a position where initially the Committee, and then
the Board, is satisfied with the overall fairness, balance, and clarity of the
document.
An essential part of the integrity of the financial statements are the key
assumptions and estimates or judgements that have to be made. The Committee
reviews key judgements prior to publication of the financial statements at the
full and half year, as well as considering significant issues throughout the
year. In particular, this includes reviewing any materially subjective
assumptions within the Group's activities. The Committee reviewed and was
satisfied that the judgements exercised by management on material items
contained within the Annual Report were reasonable and that there were no
significant issues that needed to be addressed in relation to the financial
statements.
One meeting of the Audit Committee was held on March 2024 in order to
ascertain the auditor's performance and recommend to the Board that RPG be
re-appointed as auditors to the Company for a further period of one year.
Internal financial control
Financial controls have been established to maintain proper accounting records
and to provide reliable financial information for internal use. Key financial
controls include:
• The maintenance of proper records;
• A schedule of matters reserved for the approval of the
Board;
• Evaluation, approval procedures and risk assessment for
acquisitions; and
• Close involvement of the Executive Directors in the
day-to-day operational matters of the Group.
The Directors are responsible for the Group's methods of internal control. The
Group's risk management protocols and internal control methods are designed to
reduce risk associated with the business of the Group and achieve its
strategic objectives. The Group has established procedures of internal control
that are considered adequate for a business of the size of the group.
The Directors are responsible for internal control in the Group and for
reviewing effectiveness. Due to the size of the Company, all key decisions are
made by the Board. The Directors have reviewed the effectiveness of the
Company's systems during the period under review and consider that there have
been no material losses, contingencies, or uncertainties due to weaknesses in
the controls.
Audit, Risk and Internal Control
The Audit Committee did not face any significant issues in relation to the
preparation of the financial statements. The financial accounts were prepared
by the Company with the assistance of Aventus Partners and was audited by RPG.
Reappointment of Royce Peeling Green Limited ("RPG") as auditors
On 6th February 2023 KNAV Limited, the previous auditor to First Class Metals
Plc, gave written notice to the Company of their resignation as the auditor of
the Company. KNAV confirmed that there were no circumstances connected with
their resignation which they consider should be brought to the attention of
the Company's members or creditors and stated that they resigned because they
had decided not to register as an auditor eligible to undertake audits of
Public Interest Entities.
Following At a meeting of the audit committee held on March 26, 2024, the
audit committee assessed the performance of RPG for the previous year and
recommended to the Board that they be re-appointed as auditors to the Company
for an additional term of one year.
RPG is a long-established firm of Chartered Accountants and a PIE registered
auditor based in Manchester, England. RPG is a UK member of DFK International,
the sixth largest accounting association in the world according to the
International Accounting Bulletin's annual World Survey Report in 2022, with
worldwide revenues in excess of $1.5 billion across 94 countries. In the UK,
RPG operates from two offices with around 80 staff, including 9 directors.
RPG do not provide any non-audit services therefore their objectivity and
independence are safe-guarded.
It is also to be noted that there are no contractual obligations restricting
the Board's choice of external auditor.
Marc Bamber
Audit Committee Chairman
June 13, 2024
Remuneration Report
Composition of the Remuneration Committee
The Remuneration Committee comprises of Andrew Williamson (Chair of the
Committee), Marc Sale (CEO), and Marc Bamber.
Role of the Remuneration Committee
The Remuneration Committee's function includes ascertaining the policy and
amount of the remuneration of the Executive Directors and other executives
including bonuses, incentive payments and share options.
Remuneration Policy
The Remuneration Committee is committed to ensuring that the Company's key
executive team is incentivised to drive sustainable earnings growth and
returns to shareholders, thereby creating a genuinely strong alignment of
interests between management and investors. The Company's remuneration policy
aims to provide its members with a competitive market aligned remuneration
package to reward their performance and deliver value for shareholders.
Remuneration packages are aligned against to that of similar organisations in
the sector.
Remuneration policy is designed to ensure that it attracts, retains, and
motivates the executive members of the Company for the long term. The basic
structure of a remuneration package consists of a basic salary, an annual
bonus plan and a pension plan.
The remuneration policy is based on the following principles:
1. Fairness and equity: The remuneration should be fair and equitable,
ensuring that employees receive compensation that is commensurate with their
skills, experience, and performance.
2. Transparency: The remuneration policy should be transparent, ensuring
that employees understand how their compensation is determined, including the
criteria used for performance evaluation and promotion. As a public Company,
an effective measure used to evaluate performance is the prevailing market
price of the Company's stock and its performance over various time periods.
3. Competitive compensation: The policy aims to offer compensation that is
competitive with industry standards, allowing the Company to attract and
retain top talent.
4. Incentives for performance: The policy includes incentives for high
performance, such as bonuses or other forms of variable pay, to motivate
employees to achieve their goals and objectives.
5. Flexibility: The policy is flexible, allowing for adjustments to
compensation based on changes in market conditions, industry trends, and
individual employee performance.
6. Regular review: The policy is regularly reviewed and updated to ensure
it remains effective and relevant to changing organisational needs and market
conditions.
Remuneration of Directors
The remuneration policy and packages of the Directors were duly covered in
detail in the Annual Report 2022 and approved at the Annual General meeting of
the Company held on June 29, 2023. Further, details of the same will be
submitted to the general body of the shareholders at the forthcoming Annual
General Meeting of the Company.
a. Remuneration of Executive Directors
During the year, the Executive Directors received a basic salary and benefits
as set out in the table below.
b. Remuneration of Non-Executive Directors
The remuneration of the Non-Executive Directors is set by the Board. They
attend meeting of the Board of the Company as well as perform their functions
in the various Board committees.
Directors Remuneration Report
Notes:
1. Ayub Bodi's Employment Contract was terminated on the 15th December
2023.
2. Danesh Varma resigned on the 15th October 2023.
3. Andrew Williamson's directorship commenced on the 15th October 2023
4. Marc Sale's company Specialist Exploration Services Scotland Limited
("SES") was paid a total of £181,814 during the year. These payments include
travel/accommodation & out of pocket expenses incurred through the period
by SES on behalf of First Class Metals PLC amounting to £8,981.90.
5. During the period SES subscribed for 375,000 10p shares for £37,500.
Company Pension Scheme
As of 31 December 2023, the Company has a pension plan in place which the
Directors may opt in to whereupon the Company will pay contributions in
relation to their remuneration. Thus far, only Marc Sale has opted in and
contributed a sum of £1,500 into a private pension scheme. The Company has
not paid out any further excess retirement benefits to any other Directors.
Service Contracts
The Company has entered into service contracts with each of its Directors.
These contracts are on an ongoing basis with the Executive Directors and
includes a one month notice period in case of termination. The contracts with
the INED's are on a three-year basis with an option to renew upon mutual
agreement.
The Company entered into a consultancy agreement with Specialist Exploration
Services (Scotland) Limited (SES) on 1 March 2022 (SES Consultancy Agreement),
pursuant to which SES agreed to provide certain consultancy services to the
Company.
SES is a company owned by Marc Sale. The engagement commenced with effect from
1 March 2022 and shall continue unless terminated as provided for in the SES
Consultancy Agreement or on the giving of not less than four weeks' prior
written notice by either party. The engagement is for a minimum commitment of
at least 10 days per month with such additional time, if any, as may be
necessary for their proper performance of the services. During the year, the
Company paid a bonus to Marc Sale by paying a sum of £50,000 to SES which was
used by SES to buy 375,000 shares of the company at 10p per share.
The Company has entered into an agreement for services with Vrynwy Limited on
October 12, 2023. Vrynwy Limited has appointed Andrew Williamson as an INED of
the Company. The agreement has a term of three years. The agreement may be
terminated by either party by giving one month's notice to the other. The
agreement is subject to the Company's articles of association as may be
amended from time to time. Copies of the letters of appointments and service
contracts awarded to Directors are kept at the registered office of the
Company for inspection.
Directors' interest in shares
% of total capital issued
Number of Shares
Holder
James Knowles 4,153,925 5.06%
Marc Sale 375,000 0.46%
Marc Bamber 377,965 0.46%
Andrew Williamson - -
One meeting of the committee was held in January 2023 in order to evaluate and
recommend suitable bonuses and pay increases to reward the efforts made by
various members of the Company.
Consideration of shareholder views
The Remuneration Committee considers shareholder feedback received and
guidance from shareholder bodies. This feedback, plus any additional feedback
received from time to time, is considered as part of the Company's periodic
reviews of its policy on remuneration.
UK 10-year performance graph
The directors have considered the requirement for a UK 10-year performance
graph comparing the Group's Total Shareholder Return with that of a comparable
indicator. The directors do not currently consider that including the graph
will be meaningful because the Company has only been listed since July 2022,
is not paying dividends and is currently incurring losses as it gains scale.
The directors therefore do not consider the inclusion of this graph to be
useful to shareholders at the current time. The directors will review the
inclusion of this table for future reports.
UK 10-year CEO table and UK percentage change table
The directors have considered the requirement for a UK 10-year CEO table and
UK percentage change table. The directors do not currently consider that
including these tables would be meaningful because, as described under the
Directors' Service Contracts section above directors have been engaged in the
Company only since July 2022. The directors will review the inclusion of this
table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the
relative importance of spend on pay compared to shareholder dividends paid.
Given that the Company does not currently pay dividends the directors have not
considered it necessary to include such information.
Policy for new appointments
Base salary levels will take into account market data for the relevant role,
internal relativities, the individual's experience, and their current base
salary. Where an individual is recruited at below market norms, they may be
re-aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the
Company will meet certain relocation and/or incidental expenses as
appropriate.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee,
taking into account contractual obligations.
Andrew Williamson
Remuneration Committee Chairman
June 13 2024
DIRECTOR'S REPORT
The Directors present their report together with the audited financial
statements for the year ended 31 December 2023.
A review of the business and principal risks and uncertainties has been
included in the Strategic Report.
Principal Activity
The principal activities of the Company during the period were the acquisition
and the exploration and development of its assets. Successful acquisitions
have been completed in 2023 and more details can be found in the Chairman's
Statement.
Dividends
No dividend has been paid during the year nor do the Directors recommend the
payment of a final dividend (2022: £nil).
Directors
The Directors who served during the year and up to the date hereof were as
follows:
Date of appointment Date of resignation
Marc Sale June 16, 2022 -
James Knowles January 26, 2021 -
Andrew Williamson October 15, 2023 -
Marc Bamber July 22, 2022 -
Ayub Bodi January 26, 2021 February 02, 2024
Danesh Varma July 29, 2022 October 15, 2023
Directors' Indemnity Provisions
The Company has implemented Directors and Officers Liability Indemnity
insurance.
Donations
The Company made no political donations during the year (2022: £nil).
Share Capital
First Class Metals Plc is incorporated as a public limited company and is
registered in England and Wales with the registered number 13158545. The
Company has one class of Ordinary Share, and all shares have equal voting
rights and rank pari passu for the distribution of dividends and repayment of
capital.
Substantial Shareholdings
Details of changes in share capital during the year are detailed in note 17 to
the financial statements. On 31 December 2023 shareholders may be analysed as
follows:
James Knowles and Ayub Bodi have loaned the company 5,995,332 & 5,995,332
shares respectively to be returned on the publication of prospectus or when
headroom allows.
Board of Directors
The Board currently consists of two executive Directors & two independent
non-executive Directors. It met regularly throughout 2023 to discuss key
issues and to monitor the Company's overall performance. All matters and
committees, such as Remuneration and Audit are considered by this Board.
James Knowles
Executive Chairman
A corporate professional who has enjoyed a twenty-five-year career in the
financial sector, James is primarily focused on debt funding for Real Estate
projects, most recently for Barclays Bank PLC. James is a seasoned resource
company investor and has consulted to several London and Canadian junior
listed resource companies on investor relations, public relations, and social
media marketing activities.
Marc Sale
Chief Executive Officer
A corporate professional who has specialised in natural resources,
specifically precious and base metals, with a focus on gold, for over 25
years. Marc has worked on project assessment, exploration, and development in
Africa, the Americas, Europe, and Australasia. He has held Technical
Directorships for several listed and private companies, including Brancote
PLC, Landore Resources PLC, Gold Mines of Sardinia, and Patagonia Gold. As a
'Competent Person' he is accomplished in the preparation of Company reports
and overseeing JORC/NI43-101 reporting as well as delivery of presentations to
investors, institutions, and shareholders.
Andrew Williamson
Non-Executive Director
Andrew qualified as a lawyer in 1990 and has worked in the corporate field
throughout his career. As a corporate partner, he advised on corporate and
capital market transactions, both debt and equity. He has substantial
experience of listings on the major stock markets around the world. He also
has extensive experience of public and private corporate transactions and the
creation of domestic and international investment funds. A former
institutional corporate stockbroker, nomad, and sponsor to the Full List, he
is known to use his extensive commercial experience to assist his clients with
their legal issues. He has been recognized as a recommended lawyer by legal
500 in the private acquisition and merger (sub £100m) category and in the
debt capital market category.
Marc Bamber
Non-Executive Director
A Global Corporate Financier, with over 20 years of experience in the hedge
fund sector, capital markets, private and institutional Investments, investor
comms, and marketing. Marc was a core member of the multiple award-winning RAB
Special Situations Fund that delivered net returns of 50x to investors with
circa. US$2.8Bn in Assets Under Management (AUM) in just under five years.
Marc is very active in the international markets and works with a number of
Toronto and London-listed companies in senior management roles.
Ayub Bodi
Executive Director
With management experience in the oil and gas industry and minerals
exploration, Ayub is an experienced resource executive with extensive public
company exposure in the UK, Canada, and Australia.
Ayub Bodi was resigned as a Director of the Company on February 02, 2024.
Danesh Varma
Non-Executive Director
A Chartered Accountant with over 35 years of experience in the mining finance
industry, Danesh has been a director of American Resource Company, Northgate
Exploration Ltd, Minco Resources. and Westfield Minerals Ltd. He holds
directorships with Labrador Iron Mines Holdings Limited, Buchans Resources,
Canadian Manganese Company, Brookfield Infrastructure Partners L.P., and
Anglesey Mining PLC.
Danesh Varma resigned as a Director of the Company on October 15, 2023.
Directors' powers
As set out in the Company's Articles of Association, the business of the
Company is managed by the Board which may exercise all powers of the Company.
Directors' Remuneration
A total of £461,361 was paid as remuneration to Directors for the year ended
December 31, 2023. The remuneration of the Directors will further be put to
the approval of the shareholders at the forthcoming Annual General Meeting of
the Company
Board Activities
The Board has determined that the Company will have a minimum of four Board
Meetings, two Audit Committee Meetings and two Remuneration Committee Meetings
each year. Due to necessary circumstances, the Board held a total of 9
meetings during the year 2023. The meeting of the Audit Committee was held on
25 January 2023, and the first meeting of the Remuneration Committee was held
on 19 January 2023.
The table below provides an overview of the attendance of the various
directors.
Board Meeting Attendance
Name of Director Meetings Attended
James Knowles 9
Ayub Bodi 5
Marc Sale 9
Danesh Varma 5
Marc Bamber 8
Andrew Williamson 3
Note: Danesh Varma resigned from the Board on the 15 October 2023, Andrew
Williamson was appointed to the Board on the 15 October 2023 and Ayub Bodi
resigned from the Board on the 2 February 2024.
Explanation of Board Performance and Effectiveness
During the financial year ended 31 December 2023 a Board evaluation was
carried out and it has been determined that the Board has been effective
during the period. Additionally, the Board believes that it has developed a
suitable composition in order to continue to perform as a cohesive Board for
the foreseeable future.
Auditor
First Class Metals Plc had appointed Royce Peeling Green Limited (RPG) on 9
February 2023.
RPG has expressed its willingness to continue in office. At a meeting of the
audit committee held on March 26, 2024, the audit committee assessed the
performance of RPG for the previous year and recommended to the Board that
they be re-appointed as auditors to the Company for an additional term of one
year.
A resolution to reappoint RPG will be proposed at the forthcoming Annual
General Meeting.
Shareholder Communications
The Company uses its corporate website https://www.firstclassmetalsplc.com/
(http://www.firstclassmetalsplc.com/) to ensure that the latest announcements,
press releases and published financial information are available to all
shareholders and other interested parties. The AGM will be used to communicate
with both institutional shareholders and private investors and all
shareholders are encouraged to participate. The Company counts all proxy votes
and will indicate the level of proxies lodged on each resolution after it has
been dealt with by a show of hands.
Disclosure of Information to the Auditor
Each of the persons who is a director at the date of approval of this Annual
Report confirms that:
• so far as the director is aware, there is no relevant audit
information of which the Company's auditors are unaware; and
• the director has taken all the steps that he ought to have taken as
a director in order to make himself aware of any relevant audit information
and to establish that the Company's auditors are aware of that information.
Statement of Directors' Responsibilities in respect of the Annual Report and the financial statements
The Directors are responsible for preparing this report and the financial
statements in accordance with applicable United Kingdom law and regulations
and UK adopted International Financial Reporting Standards ("IFRS")
Company law requires the Directors to prepare financial statements for each
financial period which present fairly the financial position of the Company
and the financial performance and cash flows of the Company for that period.
In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable, and understandable information;
• state whether applicable IFRSs have been followed, subject to any
material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue in business; and
• provide additional disclosures when compliance with the specific
requirements in IFRS is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the entity's
financial position and financial performance.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the Company financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report and Corporate Governance Statement that comply with that law and those
regulations, and for ensuring that the Annual Report includes information
required by the Listing Rules of the Financial Conduct Authority.
The financial statements are published on the Company's website
https://www.firstclassmetalsplc.com/. (http://www.firstclassmetalsplc.com/)
The work carried out by the Auditor does not involve consideration of the
maintenance and integrity of this website and accordingly, the Auditor accepts
no responsibility for any changes that have occurred to the financial
statements since they were initially presented on the website. Visitors to the
website need to be aware that legislation in the United Kingdom covering the
preparation and dissemination of the financial statements may differ from
legislation in their jurisdiction.
The Directors confirm that to the best of their knowledge:
• the Company financial statements give a true and fair view of the assets,
liabilities, financial position, and profit of the Company;
• this Annual Report includes the fair review of the development and
performance of the business and the position of the Company together with a
description of the principal risks and uncertainties that it faces; and
• the Annual Report and Financial Statements, taken as a whole, are fair,
balanced, and understandable and provide information necessary for
shareholders to assess the Company's performance, business, and strategy.
Forward Looking Statements
This document contains certain forward-looking statements. The forward-looking
statements reflect the knowledge and information available to the Directors of
the Company and Group during preparation and up to the publication of this
document. By their very nature, these statements depend upon circumstances and
relate to events that may occur in the future and thereby involving a degree
of uncertainty. The statements, estimates and projections herein are based
upon various assumptions by the Company that may not prove to be correct. Such
assumptions are inherently subject to significant economic and competitive
uncertainties and contingencies, many of which are beyond the control of the
Company, and upon assumptions with respect to the future performance of the
Company that may be subject to change because of circumstances beyond the
control of the directors and/or the Company. The Company believes that such
estimates and other assumptions are reasonable under the circumstances, but no
representation, warranty or other assurance is given that such statements,
estimates and projections will be realized. There may be variances between
such projections and actual events and results.
Post balance sheet events
The Company received a further CAD$200,000 OJEP Grant from the Canadian
Ministry of Mines for the Zigzag lithium & critical metals property for
work completed during 2023 in April 2024
In June 2024, an agreement was reached with the 79th GRP Limited to sell 100%
of the McKellar and Enable projects. The combined sale price is GBP £270,000
In addition to the 'McKellar and Enable' assets sale, FCM has entered into a
£230,000 working capital term loan with eh 79th GRP Limited in May 2024.
No other adjusting or significant non-adjusting events have occurred between
the 31 December reporting date and the date of authorisation.
This report is approved by the Board on June 13 2024 and signed on its behalf
by:
James Knowles Executive Chairman
June 13, 2024
First Class Metals Plc
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023
Note 31 December 31 December
2023
2022
£
£
Revenue - -
Administrative expenses (1,461,347) (693,583)
Operating loss 5 (1,461,347) (693,583)
Finance income 5,742 461
Finance costs (123,324) (7,918)
Net finance cost 6 (117,582) (7,457)
Loss before tax (1,578,929) (701,040)
Taxation 10 - -
Loss for the year (1,578,929) (701,040)
Items that may be reclassified subsequently to profit or loss
Foreign currency translation gains 14 98
Total comprehensive loss for the year (1,578,915) (700,942)
Total comprehensive loss attributable to:
Owners of the company (1,578,915) (700,942)
The above results were derived from continuing operations.
Loss per share
Basic and diluted loss per share (pence) 11 (2.13)p (1.31)p
First Class Metals Plc
(Registration number: 13158545)
Consolidated Statement of Financial Position as of 31 December 2023
Note 31 December 31 December
2023
2022
£
£
Assets
Non-current assets
Property, plant, and equipment 13 903 812
Mineral property exploration and evaluation 12 3,351,389 2,256,720
3,352,292 2,257,532
Current assets
Trade and other receivables 15 290,012 226,217
Cash and cash equivalents 16 140,802 712,715
430,814 938,932
Total assets 3,783,106 3,196,464
Equity and liabilities
Equity
Share capital 17 (82,046) (69,049)
Share premium (4,719,622) (3,395,168)
Equity reserve (719,440) (10,258)
Foreign currency translation reserve (112) (98)
Retained earnings 2,424,644 869,379
Equity attributable to owners of the company (3,096,576) (2,605,194)
Current liabilities
Trade and other payables 21 (526,530) (372,678)
Loans and borrowings 19 (160,000) (218,592)
(686,530) (591,270)
Total equity and liabilities (3,783,106) (3,196,464)
The financial statements were approved and authorised for issue by the Board
on (X) June 2024 and signed on its behalf by:
James Peter Knowles - Executive Chairman
Director
First Class Metals Plc
(Registration number: 13158545)
Company Statement of Financial Position as of 31 December 2023
Note 31 December 31 December
2023
2022
£
£
Assets
Non-current assets
Property, plant, and equipment 13 903 812
Investments in subsidiary 14 581 581
1,484 1,393
Current assets
Trade and other receivables 15 3,528,626 2,247,451
Cash and cash equivalents 16 140,302 711,613
3,668,928 2,959,064
Total assets 3,670,412 2,960,457
Equity and liabilities
Equity
Share capital 17 (82,046) (69,049)
Share premium (4,719,622) (3,395,168)
Equity reserve (719,440) (10,258)
Retained earnings 2,109,931 844,250
Total equity (3,411,177) (2,630,225)
Current liabilities
Trade and other payables 21 (99,235) (111,640)
Loans and borrowings 19 (160,000) (218,592)
(259,235) (330,232)
Total equity and liabilities (3,670,412) (2,960,457)
The Company's loss for the year was £1,289,345 (2022: - £680,190).
The financial statements were approved and authorised for issued by the Board
on June 13, 2024 and signed on its behalf by:
James Peter Knowles - Executive Chairman
Director
First Class Metals Plc
Consolidated Statement of Changes in Equity for the Year Ended 31 December
2023
Share capital Share premium Equity reserve Foreign currency translation Retained earnings Total equity
£
£
£
£
£
£
At 1 January 2022 943 1,536,947 - - (168,339) 1,369,551
Loss for the year - - - - (701,040) (701,040)
Other comprehensive income - - - 98 - 98
Total comprehensive income - - - 98 (701,040) (700,942)
New share capital subscribed 68,106 1,858,221 - - - 1,926,327
Other equity reserve movements - - 10,258 - - 10,258
At 31 December 2022 69,049 3,395,168 10,258 98 (869,379) 2,605,194
Share capital Share premium Equity reserve Foreign currency translation Retained earnings Total equity
£
£
£
£
£
£
At 1 January 2023 69,049 3,395,168 10,258 98 (869,379) 2,605,194
Loss for the year - - - - (1,578,929) (1,578,929)
Other comprehensive income - - - 14 - 14
Total comprehensive income - - - 14 (1,578,929) (1,578,915)
New share capital subscribed 12,997 1,324,454 - - - 1,337,451
Shares to be issued - - 719,440 - - 719,440
Other equity reserve movements - - 13,406 - - 13,406
Transfer - - (23,664) - 23,664 -
At 31 December 2023 82,046 4,719,622 719,440 112 (2,424,644) 3,096,576
James Knowles and Ayub Bodi have loaned the company 5,995,332 and 5,995,331
shares respectively to be returned on the publication of prospectus or when
headroom allows. This has been reflected in the equity reserve.
First Class Metals Plc
Company Statement of Changes in Equity for the Year Ended 31 December 2023
Share capital Share premium Equity reserve Retained earnings Total
£
£
£
£
£
At 1 January 2022 943 1,536,947 - (164,060) 1,373,830
Loss for the year - - - (680,190) (680,190)
Total comprehensive income - - - (680,190) (680,190)
New share capital subscribed 68,106 1,858,221 - - 1,926,327
Other equity reserve movements - - 10,258 - 10,258
At 31 December 2022 69,049 3,395,168 10,258 (844,250) 2,630,225
Share capital Share premium Equity reserve Retained earnings Total
£
£
£
£
£
At 1 January 2023 69,049 3,395,168 10,258 (844,250) 2,630,225
Loss for the year - - - (1,289,345) (1,289,345)
Total comprehensive income - - - (1,289,345) (1,289,345)
New share capital subscribed 12,997 1,324,454 - - 1,337,451
Shares to be issued - - 719,440 - 719,440
Other equity reserve movements - - 13,406 - 13,406
Transfer - - (23,664) 23,664 -
At 31 December 2023 82,046 4,719,622 719,440 (2,109,931) 3,411,177
James Knowles and Ayub Bodi have loaned the company 5,995,332 and 5,995,331
shares respectively to be returned on the publication of prospectus or when
headroom allows. This has been reflected in the equity reserve.
First Class Metals Plc
Consolidated Statement of Cash Flows for the Year Ended 31 December 2023
Note 31 December 31 December
2023
2022
£
£
Cash flows from operating activities
Loss for the year (1,578,929) (701,040)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 5 532 162
Impairment losses 5 88,568 -
Foreign exchange loss/(gain) 5 77,447 (29,831)
Finance income 6 (5,742) (461)
Finance costs 6 123,324 7,918
(1,294,800) (723,252)
Working capital adjustments
Increase in trade and other receivables 15 (107,521) (176,917)
Increase in trade and other payables 21 283,876 266,096
Net cash flow from operating activities (1,118,445) (634,073)
Cash flows from investing activities
Interest received 6 5,742 461
Acquisitions of property plant and equipment (624) (974)
Acquisition of mineral property exploration and evaluation 12 (1,253,726) (1,013,050)
Net cash flows from investing activities (1,248,608) (1,013,563)
Cash flows from financing activities
Interest paid 6 (18) -
Proceeds from issue of ordinary shares, net of issue costs 1,337,451 1,593,549
Proceeds from other borrowing draw downs 450,000 587,180
Repayment of other borrowing (517,143) (23,747)
Financing of shares loaned by directors 725,602 -
Finance cost of financial instruments (123,305) -
Foreign exchange gains or losses (77,447) -
Net cash flows from financing activities 1,795,140 2,156,982
Net (decrease)/increase in cash and cash equivalents (571,913) 509,346
Cash and cash equivalents at 1 January 712,715 267,244
Effect of exchange rate fluctuations on cash held - (63,875)
Cash and cash equivalents at 31 December 140,802 712,715
First Class Metals Plc
Company Statement of Cash Flows for the Year Ended 31 December 2023
Note 31 December 31 December
2023
2022
£
£
Cash flows from operating activities
Loss for the year (1,289,345) (680,190)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 5 532 162
Foreign exchange loss 5 389 -
Finance income 6 (5,004) (461)
Finance costs 6 110,765 7,918
(1,182,663) (672,571)
Working capital adjustments
Increase in trade and other receivables 15 (1,280,546) (1,047,919)
Increase in trade and other payables 21 2,760 8,390
Net cash flow from operating activities (2,460,449) (1,712,100)
Cash flows from investing activities
Interest received 6 5,004 461
Acquisitions of property plant and equipment (624) (974)
Net cash flows from investing activities 4,380 (513)
Cash flows from financing activities
Interest paid (18) -
Proceeds from issue of ordinary shares, net of issue costs 1,337,451 1,593,549
Proceeds from other borrowing draw downs 450,000 587,180
Repayment of other borrowing (517,143) (23,747)
Financing of shares loaned by directors 725,602 -
Finance cost of financial instruments (110,746) -
Foreign exchange gains or losses (388) -
Net cash flows from financing activities 1,884,758 2,156,982
Net (decrease)/increase in cash and cash equivalents (571,311) 444,369
Cash and cash equivalents at 1 January 711,613 267,244
Cash and cash equivalents at 31 December (140,302) 711,613
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
1 General information
The Company is a public company limited by share capital, incorporated and
domiciled in England and Wales. The principal activity of the Company was that
of a holding company.
The principal activity of the Group was that of the exploration of gold and
other semi-precious metals as well as battery metals critical to energy
storage and power generation solutions.
The Company's ordinary shares are traded on the London Stock Exchange (LSE)
under the ticker symbol FCM.
The address of its registered office is:
Suite 16 Freckleton Business Centre
Freckleton Street
Blackburn
Lancashire
BB2 2AL
United Kingdom
These consolidated financial statements comprise the Company and its
subsidiary, First Class Metals Canada Inc. (together referred to as 'the
Group').
These financial statements were authorised for issue by the board on June 13
2024
2 Accounting policies
Statement of compliance
The statutory financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the UK and in
accordance with UK companies' legislation, as applicable to companies
reporting under IFRS.
Basis of preparation
The financial information has been prepared on the historical cost basis.
The financial statements are presented in sterling (£), which is the
Company's functional currency. Each group entity determines its own functional
currency and items included in the financial statements of each entity are
measured using that functional currency.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
2 Accounting policies (continued)
Basis of consolidation
The consolidated financial statements comprise the financial information of
the Company and its subsidiary made up to the end of the reporting period.
Control is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.
The consolidated financial statements present the results of the Company and
its subsidiary as if they formed a single entity. Inter-company transactions
and balances between group companies are therefore eliminated in full. The
financial information of subsidiaries is included in the Group's financial
statements from the date that control commences until the date that control
ceases.
The Company has taken advantage of the exemption available under section 408
of the Companies Act 2006 and elected not to present its own Statement of
comprehensive income in these financial statements.
Profit or loss and each component of other comprehensive income (OCI) are
attributed to the equity holders of the parent of the Group. When necessary,
adjustments are made to the financial information of subsidiaries to bring
their accounting policies into line with the Group's accounting policies.
Adoption of New and Revised Standards
The following standards and amendments became effective in the year:
• IFRS 17 Insurance Contracts
• IAS 8 Amendments regarding the definition of accounting estimates;
• IAS 12 Amendments regarding deferred tax on leases and decommissioning
obligations;
• Amendment to IAS 1 Amendments regarding the classification of liabilities
and amendments regarding the disclosure of accounting policies;
There has been no material impact from the adoption of new standards,
amendments to standards or interpretations which are relevant to the Group.
New standards and interpretations not yet adopted
Certain new standards, amendments and interpretations to existing standards
have been published that are mandatory for accounting periods beginning on or
after 1 January 2024 and which the Group has chosen not to adopt early. These
include the following standards which are relevant to the Group:
• IFRS 16 Amendments to clarify how a seller-lessee subsequently measures
sale and leaseback transactions.
• Amendment to IAS 7 and IFRS 7 - Supplier finance
• Amendment to IAS 1 - Non-current liabilities with covenants
• IFRS S1, 'General requirements for disclosure of sustainability-related
financial information
• Amendments to IAS 21 - Lack of Exchangeability
• IFRS S2, 'Climate-related disclosures'
The Group does not expect that the standards and amendments issued but not yet
effective will have a material impact on results or net assets.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
2 Accounting policies (continued)
Going concern
As a junior exploration company, the Directors are aware that the Company must
seek funds from the market in the next 12 months to meet its investment and
exploration plans and to maintain its listing status.
The Group's reliance on a successful fund raising presents a material
uncertainty that may cast doubt on the Group's ability to continue to operate
as planned and to pay its liabilities as they fall due for a period not less
than twelve months from the date of this report.
The Company successfully raised £1,789,478.20 in the year ended 31 December
2023 through a combination of issuing new shares and warrant conversions. As
at the year-end date the Group had total cash reserves of £140,802 (2022:
£712,715).
The Directors are aware of the reliance on fund raising within the next 12
months and the material uncertainty this presents but having reviewed the
Group's working capital forecasts they believe the Group is well placed to
manage its business risks successfully providing the fund raising is
successful.
Government grants
Government grants received on capital nature are generally deducted in
arriving at the carrying amount of the asset purchased. Grants that are
receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Group with no future
related costs are recognised in profit or loss in the period in which they
become receivable. Where retention of a government grant is dependent on the
Group satisfying certain criteria, it is initially recognised as deferred
income. When the criteria for retention have been satisfied, the deferred
income balance is released to the consolidated statement of comprehensive
income or netted against the asset purchased.
Foreign currency transactions and balances
Transactions in currencies other than the Group's functional currency are
recognised at the rates of exchange prevailing at the dates of the
transaction. At the end of each reporting period, monetary items denominated
in foreign currencies are translated at the rates prevailing at that date.
Non-monetary items that are measured in terms of historical costs are not
re-translated.
Exchange gains or losses arising from translations of foreign currency
monetary assets, liabilities and transactions are recorded in foreign exchange
gain (loss) in the statement of net income (loss).
Segmental reporting
Operating segments are presented using the 'management approach', where the
information presented is on the same basis as the internal reports provided to
the Executive Chairman. The Executive Chairman is responsible for the
allocation of resources to operating segments and assessing their performance.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
2 Accounting policies (continued)
Tax
Income tax expense represents the sum of the tax currently payable and
deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from profit as reported comprehensive income statement because
it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are not taxable or tax deductible.
The Group's liability for current tax is calculated using tax rates (and tax
laws) that have been enacted or substantively enacted in countries where the
Group and its subsidiaries operate by the end of the financial period.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events have occurred at that date that will result in an obligation to pay
more, or a right to pay less or to receive more tax, with the following
exceptions:
Deferred tax assets are recognised only to the extent that the Directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences
can be deducted. Deferred tax is measured on an undiscounted basis at the tax
rates that are expected to apply in the periods in which timing differences
reverse, based on tax rates and laws enacted or substantively enacted at the
balance sheet date.
Property, plant, and equipment
Property, plant, and equipment is stated in the statement of financial
position at cost, less any subsequent accumulated depreciation and subsequent
accumulated impairment losses.
The cost of property, plant and equipment includes directly attributable
incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets over their
estimated useful lives, as follows:
Asset class Depreciation method and rate
Computer equipment 3 years - straight line basis
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
2 Accounting policies (continued)
Mineral property exploration and evaluation
Exploration and evaluation assets under IFRS 6 include acquired mineral use
rights for mineral properties held by the Group. Mineral exploration and
evaluation expenditures are capitalised. The amount of consideration paid (in
cash or share value) for mineral use rights is capitalised on a
project-by-project basis pending determination of the technical feasibility
and the commercial viability of the project. Capitalised costs include costs
directly related to exploration and evaluation activities in the area of
interest. General and administrative costs are only allocated to the asset to
the extent that those costs can be directly related to operational activities.
Mineral property exploration and evaluation assets will be amortised and
impaired to profit and loss once commercial production has been achieved or
written off if the exploration assets are abandoned or sold. Depletion of
costs capitalised on projects when put into commercial production will be
recorded using the unit-of-production method based upon estimated proven and
probable reserves. The ultimate recoverability of the amounts capitalised for
the exploration and evaluation assets and expenditures is dependent upon the
delineation of economically recoverable ore reserves, obtaining and retaining
the necessary permits to operate a mine, and realising profitable production
or proceeds from the disposition thereof.
The commercial viability of extracting a mineral resource is considered to be
determinable when resources are determined to exist. The property rights are
current, and it is considered probable that the costs will be recouped through
successful development and exploitation of the project, or alternatively by
the sale of the property. Upon determination of resources, exploration, and
evaluation assets attributable to those resources are first tested for
impairment and then reclassified from exploration and evaluation assets
mineral property interests. Expenditures deemed unsuccessful are recognised in
operations in the income statement.
Impairment of mineral property exploration and evaluation
The carrying values of capitalised exploration and evaluation assets are
assessed for impairment if fact and circumstances indicate that the carrying
amount exceeds the recoverable amount and sufficient data exists to evaluate
technical feasibility and commercial viability. If any indication of
impairment exists, an estimate of the asset's recoverable amount is
calculated. The recoverable amount is determined as the higher of the fair
value less costs of disposition and the asset's value in use. If the carrying
amount of the asset exceeds its estimated recoverable amount, the asset is
impaired, and an impairment loss is charged to the income statement so as to
reduce the carrying amount to its estimated recoverable amount.
If individual claims/ cells are abandoned for one reason or another, then the
property as a whole will be considered for impairment. An impairment
presumption also exists if no work has been done on a claim/ cell in three
years. Cash resources are taken into consideration to justify claim
preservation/ renewal in the forthcoming twelve months.
Investments in subsidiaries
Investments in subsidiary companies are classified as non-current assets and
included in the Statement of financial position of the Company at cost, less
provision for impairment at the date of acquisition.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
2 Accounting policies (continued)
Trade payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less (or in the normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities.
Trade payables are recognised initially at the transaction price and
subsequently measured at amortised cost using the effective interest method.
Borrowings
All borrowings are initially recorded at the amount of proceeds received, net
of transaction costs. Borrowings are subsequently carried at amortised cost,
with the difference between the proceeds, net of transaction costs, and the
amount due on redemption being recognised as a charge to the income statement
over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method
and is included in finance costs.
Borrowings are classified as current liabilities unless the group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting date.
Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events
and whose existence will only be confirmed by the occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of the
Group. It can also be a present obligation arising from past events that is
not recognised because it is not probable that outflow of economic resources
will be required, or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the
accounts. When a change in the probability of an outflow occurs so that the
outflow is probable, it will then be recognised as a provision. A contingent
asset is a possible asset that arises from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of one or more
uncertain events not wholly within the control of the Group. Contingent assets
are not recognised but are disclosed in the notes to the accounts when an
inflow of economic benefits is probable. When inflow is virtually certain, an
asset is recognised.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at
the fair value of the cash or other resources received or receivable, net of
the direct costs of issuing the equity instruments.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions
are paid into a separate entity and has no legal or constructive obligations
to pay further contributions if the fund does not hold sufficient assets to
pay all employees the benefits relating to employee service in the current and
prior periods.
For defined contribution plans contributions are paid publicly or privately
administered pension insurance plans on a mandatory or contractual basis. The
contributions are recognised as employee benefit expense when they are due. If
contribution payments exceed the contribution due for service, the excess is
recognised as an asset.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
2 Accounting policies (continued)
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets and liabilities are recognised in the Group's Statement of
Financial Position when the Group becomes party to the contractual provision
of the instrument. The following policies for financial instruments have been
applied in the preparation of consolidated financial statements:
The Group and Company's financial assets which comprise loans and receivables
and other debtors are measured at amortised cost.
The classification depends on the business model for managing the financial
assets and the contractual terms of the cash flows. Financial assets are
classified as at amortised cost only if both of the following criteria are
met:
• the asset is held within a business model whose objective is to collect
contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of
principal and interest.
Financial liabilities (other than convertible debt) are classified as other
financial liabilities measured at amortised cost. Financial liabilities are
initially recognised at fair value, net of directly attributable transaction
costs, and are subsequently measured at amortised cost. A financial liability
is de‑recognised when the obligation under the liability is discharged,
cancelled or expires.
Compound financial instruments
Compound financial instruments issued by the Company comprise convertible loan
notes that can be converted to share capital at the option of the holder, and
the number of shares to be issued does not vary with changes in their fair
value.
The liability component of a compound financial instrument is initially
recognised at the fair value of a similar liability that does not have an
equity conversion option. The equity component is initially recognised at the
difference between the fair value of the compound financial instrument as a
whole and the fair value of the liability and equity components in proportion
to the initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound
financial instrument is measured at amortised cost using the effective
interest method. The equity component of a compound financial instrument is
not re-measured subsequent to initial recognition except on conversion or
expiry.
3 Critical accounting judgements and key sources of estimation uncertainty
Certain amounts included in the financial statements involve the use of
judgement and/or estimation. These judgements and estimates are based on the
management's best knowledge of the relevant facts and circumstances, having
regard to prior experience, but actual results may differ from the amounts
included in the financial statements. Information about such judgements and
estimates is contained in the accounting policies and/or the notes to the
financial statements.
Significant areas of estimation uncertainty and critical judgements made by
management in preparing the consolidated financial statements include:
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
3 Critical accounting judgements and key sources of estimation uncertainty
(continued)
Recognition of evaluation and exploration assets
Judgement is required in determining when the future economic benefit of a
project can be reasonably be regarded as assured, at which pointy evaluation
and exploration expenses are capitalised. This includes the assessment of
whether there is sufficient evidence of the probability of the existence of
economically recoverable minerals to justify the commencement of
capitalisation of costs.
The carrying value at the year-end was £3,351,389 (2022: £2,256,720)).
In connection with possible impairment of exploration and evaluation assets
the Directors assess each potentially cash generating unit annually to
determine whether any indication of impairment exists. The judgements made
when making these assessments are similar to those set out above and are
subject to the same uncertainties.
4 Segmental information
Identification of reportable operating segments
The Group is organised into one corporate function in the UK and the operating
segment, being mining and exploration operations. This operating segment is
the subsidiary in Canada, for which the Executive Chairman assesses its
performance and determines the allocation of resources.
The information reported to the Executive Chairman is on a monthly basis.
Geographical information
Income statement analysis
2023 2022
UK Canada Total UK Canada Total
£ £ £ £ £ £
Administrative expenses 1,183,584 277,763 1,461,347 672,733 20,850 693,583
Non-current assets
2023 2022
UK Canada Total UK Canada Total
£ £ £ £ £ £
Mineral property exploration and evaluation asset - 3,351,389 3,351,389 - 2,256,720 2,256,720
5 Operating loss
Arrived at after charging
31 December 31 December
2023
2022
£
£
Depreciation expense (532) (162)
Impairment losses (88,568) -
Foreign exchange (losses)/gains (77,447) 25,669
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
6 Finance income and costs
31 December 31 December
2023
2022
£
£
Finance income
Interest income on bank deposits 5,742 461
Finance costs
Interest on bank overdrafts and borrowings (2) -
Interest expense on other financing liabilities (123,322) (7,918)
Total finance costs (123,324) (7,918)
Net finance costs (117,582) (7,457)
7 Staff costs
The aggregate payroll costs (including directors' remuneration) were as
follows:
31 December 31 December
2023
2022
£
£
Wages and salaries 266,725 174,500
Social security costs 26,585 13,079
Other short-term employee benefits 4,200 -
Pension costs, defined contribution scheme 1,500 -
299,010 187,579
The average monthly number of persons employed by the group (including
directors) during the year, analysed by category was as follows:
31 December 31 December
2023
2022
No.
No.
Administration and support 4 3
8 Directors' remuneration
The directors' remuneration for the year was as follows:
31 December 31 December
2023
2022
£
£
Remuneration 270,894 168,500
Contributions paid to money purchase schemes 1,500 -
272,394 168,500
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
8 Directors' remuneration
Summary
SALARY FEES PENSION TOTAL
£ £ £ £
MBamber 30,000 30,000
ABodi 62,368 62,368
JKnowles 93,333 93,333
MSale 49,500 181,814 1,500 232,814
DVarma 31,523 31,523
AWilliamson 4,170 4,170
Carlos Espinosa 7,152 7,152
266,724 193,136 1,500 461,360
9 Auditors' remuneration
31 December 31 December
2023
2022
£
£
Audit of these financial statements 29,000 25,500
Audit of the subsidiary's financial statements by component auditor - 2,822
29,000 28,322
9
Auditors' remuneration
31 December
2023
£
31 December
2022
£
Audit of these financial statements
29,000
25,500
Audit of the subsidiary's financial statements by component auditor
-
2,822
29,000
28,322
10 Income tax
The tax on profit before tax for the year is the same as the standard rate of
corporation tax in the UK (2022: the same as the standard rate of corporation
tax in the UK) of 23.5% (2022: 19%).
The actual charge for the year can be reconciled to the expected charge for
the year based on the profit or loss and the standard rate of tax as follows:
31 December 31 December
2023
2022
£
£
Loss before tax (1,578,929) (701,040)
Corporation tax at standard rate (371,048) (133,198)
Increase from effect of unrelieved tax losses carried forward 371,048 133,198
Total tax charge/(credit) - -
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
There is an unrecognised deferred tax asset at 31 December 2023 of £612,073
(2022: £217,345) which, in view of the trading results, is not considered by
the directors to be recoverable in the short term. The applicable tax rate is
25% which was enacted under UK legislation and would be the rate applicable
when the asset reverses.
11 Loss per share
The basic loss per share for the period of (2.13)p (2022: (1.31)p) is
calculated by dividing the loss for the period by the weighted average number
of Ordinary Shares in issue of 74,217,536 (2022: 53,456,619 Ordinary Shares).
Note 17 provides details of the share issues during the year ended 31 December
2023.
There are potentially issuable shares all of which relate to share warrants
issued as part of placings in 2023. The weighted average number of additional
potential Ordinary Shares in issue is 22,615,228 (2022: 23,982,815). However,
due to the losses for the year the impact of the potential additional shares
is anti-dilutive and has therefore not been recognised in the calculation of
the fully diluted loss per share of (2.13)p per share (2022: (1.31)p).There
have been no further shares issued post year-end.
12 Mineral property exploration and evaluation
Group
Mineral property exploration and evaluation
£
Cost or valuation
At 1 January 2023 2,256,720
Additions 1,253,726
Foreign exchange movements (70,489)
At 31 December 2023 3,439,957
Amortisation
At 1 January 2023 -
Impairment charge 88,568
At 31 December 2023 88,568
Carrying amount
At 31 December 2023 3,351,389
At 31 December 2022 2,256,720
During the previous year the Group successfully applied for a grant of CAD
$200,000 for the purpose of mitigating the costs of carrying out exploration
and evaluation activities on the North Hemlo project. Post year-end the Group
retrospectively applied for a grant of CAD $200,000 for additional exploration
work carried out on North Hemlo, this was received in April 2024 and
recognised as accrued income in 2023 which was offset against the cost of
additions shown above.
Impairment of the Sugar Cube property
The magnetic geophysics survey carried out in 2023 over the Sugar Cube
property was successful in so much no obvious remnants of green stone were
evident. However, the central sector of the block merits further works and
will be a focus for a future exploration programme. Other sectors will not be
apportioned assessment credits and it is likely that those mining claims will
lapse. With this in mind, the Company is impairing the property to zero value.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
13 Property, plant and equipment
Group and Company
Furniture, fittings and equipment
£
Cost or valuation
At 1 January 2023 974
Additions 624
At 31 December 2023 1,598
Depreciation
At 1 January 2023 162
Charge for the year 533
At 31 December 2023 695
Carrying amount
At 31 December 2023 903
At 31 December 2022 812
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
14 Investments
Company
Details of the Company's subsidiary as at 31 December 2023 are as follows:
Name of subsidiary Principal activity Registered office Proportion of ownership interest and voting rights held 2022
2023
First Class Metals Canada Inc. Mining of other non-ferrous metal ores 55 York Street 100% ordinary shares 100% ordinary shares
Suite 401
Toronto
ON M5J 1R7
Canada
Summary of the company investments
31 December 31 December
2023
2022
£
£
Investment in subsidiary 581 581
15 Trade and other receivables
Group Company
31 December 31 December 31 December 31 December
2023
2022
2023
2022
£
£
£
£
Receivables from Group company - - 3,485,392 2,148,884
Accrued income (see note 12) 118,991 85,979 - -
Prepayments 32,452 67,919 28,650 67,919
Other receivables 138,569 72,319 14,584 30,648
290,012 226,217 3,528,626 2,247,451
Group Company
31 December 31 December 31 December 31 December
2023
2022
2023
2022
£
£
£
£
At amortised cost
Trade and other receivables - 125,998 - 2,232,881
- 125,998 - 2,232,881
15 Trade and other receivables
The receivables from related party represents amount owed by the Company's
subsidiary. This balance was interest free throughout the period and has no
fixed repayment date. No provision has been made against this amount.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
16 Cash and cash equivalents
Group Company
31 December 31 December 31 December 31 December
2023
2022
2023
2022
£
£
£
£
Cash at bank 140,802 712,715 140,302 711,613
At 31 December 2023 all cash at bank and in hand was denominated in £
sterling other than £500 in Canadian Dollars (2022: £1,102).
17 Share capital
Allotted, called up and fully paid shares
31 December 31 December
2023
2022
No. £ No. £
Ordinary shares of £0.001 each 82,046,029 82,046.03 69,048,707 69,048.71
New shares allotted
During the year 12,997,322 Ordinary shares having an aggregate nominal value
of £12,997 were allotted for an aggregate consideration of £1,337,451.
The table below presents the number of new Ordinary Shares after each equity
transactions that occurred in the year ended 31 December 2023 and the
comparative period to 31 December 2022.
Number of new Ordinary shares Share
Capital
No £
Allotted, issued and fully paid:
As at 31 December 2021 943,484 943
Bonus issue of shares 50,000,000 50,000
Shares issued upon exercising Subscription warrants 1,004,985 1,005
Placing on 28 July 2022 10,280,000 10,280
Issue of shares on conversion of loan 3,428,571 3,429
Private placings 3,091,667 3,092
Issue of shares to geological consultant 300,000 300
As at 31 December 2022 69,048,707 69,049
Shares issued upon exercising Subscription warrants 1,693,587 16,936
Placing on 26 June 2023 9,974,000 99,740
Issue of shares for options and services 1,329,735 13,297
As at 31 December 2023 82,046,029 82,046
The Board has provisionally agreed to issue share options to Directors and Key
Management Personnel, but no options had been granted at the year end. No
share-based payment expense has been recorded in the year.
The Group issued the following warrants during the year which are considered
equity instruments:
Warrant, Issue & Expiry date Amount Issued Exercise Price Amount Exercised Number Outstanding at the year end
10p Warrants 7,652,563 10p 1,597,572 6,054,991
28 July 2022 Exp 28 July 2024
12.5p Warrants 7,321,785 12.5p 775,000 6,546,785
28 July 2022 Exp 28 July 2024
20p Warrants 7,321,785 20p - 7,321,785
28 July 2022 Exp 28 July 2025
15p Broker Warrants 150,000 15p - 150,000
28 July 2022 Exp 28 July 2025
20p Sunbeam Subscription Warrants 666,667 20p - 666,667
3 October 2022 Exp 3 October 2025
20p James Goozee Warrants 1,875,000 20p - 1,875,000
4 December 2022 Exp 4 December 2025
James Knowles and Ayub Bodi have loaned the company 5,995,332 and 5,995,331
ordinary shares respectively to be returned on the publication of prospectus
or when headroom allows. This has been reflected in the equity reserve.
18 Reserves
Group and Company
Share capital - This represents the nominal value of equity shares in issue.
Share premium - This represents the premium paid above the nominal value of
shares in issue less issue costs.
Equity reserve - This represents the equity element of the convertible loan
which was settled in the year. This also represents the shares loaned by the
directors to the company for which shares will be issued at a later date.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
18 Reserves (continued)
Retained losses
This represents the accumulated net gains and losses since inception,
recognised in the statement of comprehensive income.
The changes to each component of equity resulting from items of other
comprehensive income for the prior year were as follows:
Foreign currency translation Total
£
£
Foreign currency translations gains 112 98
19 Loans and borrowings
Group Company
31 December 31 December 31 December 31 December
2023
2022
2023
2022
£
£
£
£
Current loans and borrowings
Other borrowings - 13,432 - 13,432
Other loans 160,000 205,160 160,000 205,160
160,000 218,592 160,000 218,592
The group's exposure to market and liquidity risks, including maturity
analysis, relating to loans and borrowings is disclosed in note 23 "Financial
risk review".
20 Other borrowings
Group and Company
Other liabilities maturity analysis
A maturity analysis of other borrowings based on undiscounted gross cash flow
is reported in the table below:
31 December 31 December
2023
2022
£
£
Less than one year - 13,433
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
21 Trade and other payables
Group Company
31 December 31 December 31 December 31 December
2023
2022
2023
2022
£
£
£
£
Trade payables 114,959 82,006 31,091 32,986
Accrued expenses 385,277 252,163 41,850 40,145
Social security and other taxes 15,735 7,667 15,735 7,667
Other payables 10,559 30,842 10,559 30,842
526,530 372,678 99,235 111,640
The fair value of the trade and other payables classified as financial
instruments are disclosed below.
The group's exposure to market and liquidity risks, including maturity
analysis, relating to trade and other payables is disclosed in note 23
"Financial risk review".
Group Company
31 December 31 December 31 December 31 December
2023
2022
2023
2022
£
£
£
£
Trade and other payables at amortised cost - Suppliers 114,959 49,020 31,091 32,986
22 Pension and other schemes
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The pension cost
charge for the year represents contributions payable by the Group to the
scheme and amounted to £1,500 (2022: £Nil).
Contributions totalling £Nil (2022: £Nil) were payable to the scheme at the
end of the year and are included in creditors.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
23 Financial risk review
Group
This note presents information about the group's exposure to financial risks
and the group's management of capital.
The Group's objectives when managing capital are:
(a) To maintain a flexible capital structure which optimizes the cost of
capital at acceptable risk;
(b) To meet external capital requirements on debt and credit facilities;
(c) To ensure adequate capital to support long-term growth strategy; and
(d) To provide an adequate return to shareholders.
The Group continuously monitors and reviews the capital structure to ensure
the objectives are met.
Management defines capital as the combination of its indebtedness and equity
balances, as disclosed in note 17, and manages the capital structure within
the context of the business strategy, general economic conditions, market
conditions in the power industry and the risk characteristics of assets.
The Group's objectives in managing capital and the definition of capital
remain unchanged throughout the period. External factors, such as the economic
environment, have not altered the Group's objectives in managing capital.
Credit risk
The Group's definition of credit risk is Credit risk is the risk of financial
loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. At present the Group does not have
any customers and its risk on cash and bank is mitigated by holding of the
funds in an "A" rated bank.
Liquidity risk
The Group's definition of liquidity risk is the risk that the Group will not
be able to meet its financial obligations as they become due. The Group's
policy is to ensure that it will always have sufficient cash to allow it to
meet its liabilities when they become due. The Group manages liquidity risk by
maintaining adequate cash balances (or agreed facilities) to meet expected
requirements. The liquidity risk of each group entity is managed centrally by
the Executive Chairman. The contractual cashflows are mentioned in note
12,19,20 and 21.
Market risk
The Group's definition of market risk is The Group's definition of market risk
is the risk that changes in market prices, such as commodity prices, will
affect the Group's earnings. The objective of market risk management is to
identify both the market risk and the Group's options to mitigate this risk.
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
23 Financial risk review (continued)
Foreign exchange risk
Foreign exchange risk arises when individual Group entities enter into
transactions denominated in a currency other than their functional currency.
A majority of the Group's operating costs will be incurred in US and Canadian
Dollars, whilst the Group has raised capital in £ Sterling. Fluctuations in
exchange rates of the US Dollar and Canadian Dollar against £ Sterling may
materially affect the Group's translated results of operations. In addition,
given the relatively small size of the Group, it may not be able to
effectively hedge against risks associated with currency exchange rates at
commercially realistic rates. Accordingly, any significant adverse
fluctuations in currency rates could have a material adverse effect on the
Group's business, financial condition and prospects to a much greater extent
than might be expected for a larger enterprise.
Interest rate risk
Interest rate risk
Interest rate risk is the risk that the fair value of the future cash flows of
a financial instrument will fluctuate because of changes in market rates of
interest. As the Group has no significant interest bearing assets or
liabilities, the Group's operating cash flows are substantially independent of
changes in market interest rates. Therefore, the Group is not exposed to
significant interest rate risk.
24 Financial instruments
Financial assets at amortised cost
Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Trade and other receivables - 125,998 - 2,232,881
Cash and cash equivalents 140,802 712,715 140,302 711,613
Financial liabilities at amortised cost
Group Group Company Company
2023 2022 2023 2022
£ £ £ £
Current liabilities
Trade and other payables 114,959 357,325 31,091 111,640
Loans and borrowings 160,000 218,592 160,000 218,592
Non-current liabilities
Accrued expenses - 15,353 - -
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
(continued)
25 Related party transactions
Parties are considered to be related if one party has the ability (directly or
indirectly) to control the other party or exercise significant influence over
the other party in making financial and operating decisions. Parties are also
considered related if they are subject to common control or common significant
influence. Related parties may be individuals or corporate entities.
Group
The Group has taken advantage of the exemption available under IAS 24 "Related
Party Disclosures" not to disclose details of transactions between Group
undertakings which are eliminated on consolidation.
Company
Funds are transferred within the Group dependent on the operational needs of
individual companies and the Directors do not consider it meaningful to set
out the gross amounts of transfers between companies.
Key management personnel
All key management personnel are directors and appropriate disclosure with
respect to them is made in the directors' remuneration report.
During the year, the Group incurred consultancy and travel expenses in
relation to the intangible assets from Specialist Exploration Services
(Scotland) Limited, a company controlled by a common director. The services
were for £181,814 (2022: £86,346) of which £Nil (2022: £Nil) was
outstanding at the year end. Of the £181,814 balance payable, £37,500 was
settled by way of a share issue of 375,000 shares to Specialist Exploration
Services (Scotland) Limited.
During the year, the Group incurred director's fees for A Williamson through
Vrynwy Limited, a company controlled by a common director. The services were
for £4,170 (2022: £Nil) of which £Nil (2022: £Nil) was outstanding at the
year end.
During the year, the directors, James Knowles and Ayub Bodi loaned the company
5,995,332 and 5,995,331 shares respectively to be returned on the publication
of prospectus or when headroom allows. This has been reflected in the equity
reserve. The directors received an 8.25% facility fee on the shares loaned. At
the year-end James Knowles was owed £3,081 (2022: £Nil) which is reflected
in other payables. Ayub Bodi owed the company £689 (2022: £Nil) at the year
end and is reflected in other receivables. Ayub Bodi resigned as director on 2
February 2024.
26 Results attributable to First Class Metals Plc
The loss after taxation in the Company amounted to £1,289,345 (2022:
£680,190). The Directors have taken advantage of the exemptions available
under section 408 of the Companies Act 2006 and not presented an income
statement for the company alone.
27 Events after the reporting date
In addition to the CAD$ 200,000 received by the Company in 2023, The Company
received a further CAD$200,000 OJEP Grant from the Canadian Ministry of Mines
for the Zigzag lithium & critical metals property for work completed
during 2023 in April 2024
No other adjusting or significant non-adjusting events have occurred between
the 31 December reporting date and the date of authorisation.
Opinion
We have audited the financial statements of First Class Metals Plc (the
'parent Company)' and its subsidiary (the 'Group') for the year ended 31
December 2023 which comprise Consolidated Income Statement, Consolidated
Statement of Financial Position, Company Statement of Financial Position,
Consolidated Statement of Changes in Equity, Company Statement of Changes in
Equity, Consolidated Statement of Cash Flows, Company Statement of Cash
Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied
in the preparation of the group and company financial statements is applicable
law and UK adopted international accounting standards.
In our opinion:
• the financial statements give a true and fair view of the state
of the Group's and of the parent Company's affairs as at 31 December 2023 and
of the group's loss for the year then ended;
• the Group and parent Company financial statements have been
properly prepared in accordance with UK adopted international accounting
standards; and
• the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Our audit opinion is consistent with our additional report to the Audit
Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the auditor Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the
Group and the parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Our approach to the audit
The scope of our audit was the audit of the Group and parent Company for the
year ended 31 December 2023. The audit was scoped by obtaining an
understanding of the Group and parent Company and their environment, including
the Group and parent Company's system of internal control and assessing the
risks of material misstatement.
Audit work to respond to the assessed risks was planned and performed directly
by the engagement team which performed full scope audit procedures.
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matters How our scope addressed this matter
Exploration and Evaluation assets
The Group's accounting policy in respect of its exploration and evaluation We have evaluated whether, under IFRS 6 Exploration for and Evaluation of
assets ("E&E assets") is set out under "mineral property exploration and Mineral Assets, the assets are appropriately determined as E&E assets.
evaluation costs" and its accounting policy in respect of impairment is set
out under "impairment of intangible assets" in Note 2 to the financial
statements.
We have reviewed and challenged management's assessment with respect to
indicators of impairment under IFRS 6.
Management have assessed the E&E assets for impairment indicators under
IFRS6 and concluded that other than in respect of the Sugar Cube site no
triggers existed at the year-end. Determining whether impairment indicators We have evaluated whether the relevant disclosures in the financial statements
exist involves significant judgement by management, including considering are reasonable.
specific impairment indicators prescribed in IFRS 6.
Our conclusion
There is a risk that if unidentified impairment indicators exist, the carrying
value of E&E assets may not be fully recoverable. We are satisfied that expenditure capitalised as E&E assets meet the
requirements of IFRS 6 and that management have adequately considered the
indicators which could give rise to an impairment charge in their assessment
of the carrying value of those assets.
Going Concern
We draw attention to note 2 in the financial statements, which indicates that Our evaluation of the directors' assessment of the Group's and parent
the Group is dependent on successful fundraising to continue as a going Company's ability to continue to adopt the going concern basis of accounting
concern. Additionally, the Group has a cash balance at the date of approval of included:
the financial statements that would not be able to support its operations and
overheads for the following twelve months.
· Reviewing management's assessment and financial forecasts for the
next twelve months and discussing these with the Board.
As stated in Note 2, these events or conditions, along with the other matters
as set out in Note 2, indicate that a material uncertainty exists that may · Discussing the Board's strategy to ensure funds are available to
cast significant doubt on the Group and parent Company's ability to continue the Group to fund its plans through fund raising, debt or asset realisation;
as a going concern.
· Reviewing existing expenditure and overheads;
· Reviewing post year end investment activity and fund raising; and
· Reviewing the adequacy of the disclosure within the financial
statements relating to the Directors' assessment of the going concern basis of
preparation.
Our conclusion
In view of the requirement to raise additional funds there is a material
uncertainty with regard to going concern because although the directors are
confident they can raise adequate funding that funding has not been agreed.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our application of materiality
The scope and focus of our audit was influenced by our assessment and
application of materiality.
We define materiality as the magnitude of misstatement that could reasonably
be expected to influence the readers and the economic decisions of the users
of the financial statements. We use materiality to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to
evaluate the effect of misstatements, both individually and on the financial
statements as a whole.
Materiality for the Group financial statements as a whole was set at £91,000,
determined with reference to the Gross Assets of the Group (2022: £77,000).
This was considered an appropriate level of materiality given the limited
trading activity of the Group and the Gross Assets are considered to be of the
most interest to the users of the financial statements at this stage of
operations. Performance materiality was set at £68,000, being 75% of
materiality (2022: £48,000). Performance materiality was set at 62.5% in 2022
which was a first year audit. We report to the Board any corrected or
uncorrected misstatements arising exceeding £3,400 (2022: £2,000).
Material uncertainty related to going concern
We draw attention to Note 2 in the accounting policies, concerning the Group's
ability to continue as a going concern. The matters explained in Note 2
indicate that the Group needs to raise further finance to fund its working
capital needs and development plans. As at the date of approval of these
financial statements there are no legally binding agreements relating to
securing the required funds. These events or conditions along with the matters
set forth in Note 2 indicate the existence of a material uncertainty which may
cast significant doubt over the Group's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
See also Key audit matters.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the Strategic Report and the Directors'
Report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the Strategic Report and the Directors' Report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the parent
Company and their environment obtained in the course of the audit, we have not
identified material misstatements in the Strategic Report or the Directors'
Report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent Company financial statements and the part of the
Directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of Directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement set out
on page 75, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. In preparing the financial
statements, the directors are responsible for assessing the Group's and parent
Company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or parent
Company or to cease operations,
or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
We evaluated the directors' and management's incentives and opportunities for
fraudulent manipulation of the financial statements (including the risk of
override of controls) and determined that the principal risks were related to
posting manual journal entries to manipulate financial performance, management
bias through judgements and assumptions in significant accounting estimates
and significant one-off or unusual transactions.
Our audit procedures were designed to respond to those identified risks,
including non-compliance with laws and regulations (irregularities) and fraud
that are material to the financial statements. Our audit procedures included
but were not limited to:
· Discussing with the directors and management their policies and
procedures regarding compliance with laws and regulations;
· Communicating identified laws and regulations throughout our
engagement team and remaining alert to any indications of non-compliance
throughout our audit; and
· Considering the risk of acts by the Group and parent Company
which were contrary to applicable laws and regulations, including fraud.
Our audit procedures in relation to fraud included but were not limited to:
· Making enquiries of the directors and management on whether they
had knowledge of any actual, suspected or alleged fraud;
· Gaining an understanding of the internal controls established to
mitigate risks related to fraud;
· Discussing amongst the engagement team the risks of fraud; and
· Addressing the risks of fraud through management override of
controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the
primary responsibility for the prevention and detection of irregularities
including fraud rests with management. As with any audit, there remained a
risk of non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations or the override of internal
controls.
A further description of our responsibilities is located on the Financial
Reporting Council's website at:
https://www.frc.org.uk/auditorsresponsibilities.
(http://www.frc.org.uk/auditorsresponsibilities) This description forms part
of our Auditor's Report.
Other matters which we are required to address
We were appointed by the Board on 9 February 2023 to audit the financial
statements for the year ended 31 December 2022 and subsequent financial
periods. Our total uninterrupted period of engagement is two years, covering
the periods ending 31 December 2022 to 31 December 2023.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group and parent Company and we remain independent of the
Group and parent Company in conducting our audit.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's members, as
a body, for our audit work, for this report, or for the opinions we have
formed.
Martin Chatten
Senior Statutory Auditor
For and on behalf of Royce Peeling Green Limited Chartered Accountants
Statutory
Auditor
The Copper Room
Deva City Office Park Trinity Way Manchester M3 7BG United Kingdom
1 Share price 30/12/2022 16.75p, Shares in Issues 81,886,294
2 (FCM and FCMC are collectively referred to as the "Group")
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