It’s an interesting time to be an exploration investor.
Author: Michael Johnson
On the one hand, gold prices are primed to remain elevated for some time amid escalating economic and geopolitical uncertainty. On the other, the ongoing “greenification” of the world is set to increase demand for base and battery metals massively as supply struggles to keep up.
With so many potential long-term opportunities on offer, it can be difficult to know where to focus–particularly with so many stocks trading at a heavy discount right now.
But what if there was an opportunity to back a company with a portfolio prospective for a wide range of metals at the very beginning of its journey?
Well, thanks to First Class Metals (LSE: FCM), that opportunity is now available.
@FirstClassMetal Admitted to the Official List on the London Stock Exchange’s Main Market #FCM £1.13 million fundraising – market capitalisation of £6.56m, 10 pence per Ordinary Share https://t.co/DC1xXueXD3
— Share_Talk ™ (@Share_Talk) July 29, 2022
Indeed, Friday saw First Class Metals announce that it had been admitted to the Official List of the London Stock Exchange’s Main Market. And as far as early-stage opportunities go, the company very much seems to have all of its ducks in a row.
Quality portfolio
For one thing, First Class is led by a multi-disciplined team of exploration experts both in and out of the boardroom.
CEO Marc Sale, for example, has been integral to many global mineral discoveries over the last three decades. Likewise, Bruce MacLachlan, who leads the company’s field work, is head of Emerald Geological Services and has close to 40 years of exploration experience.
But perhaps even more importantly, First Class boasts a large and prospective portfolio covering some 180km2 in the ultra-mining friendly Canadian jurisdiction of Ontario.
This point should not be overlooked. After all, a firm can have the best project in the world, but if it’s based in a region whose authorities block progress at every stage, it’s value will be destroyed.
This is unlikely to be the case for First Class.
Thanks to its supportive authorities and proactive approach to indigenous relations, Ontario is not just one of Canada’s top mineral producers, but also one of the top areas globally for exploration expenditure.
Right now, there are 41 active mining operations across the territory, with the likes of Glencore, Newmont, Barrick Gold, Kirkland Lake, and Vale all boasting significant footprints.
It’s pretty much a perfect backdrop for an ambitious new exploration company. So, how has First Class been able to consolidate such a vast land package in Ontario?
Well, thanks to its local knowledge, the company was able to focus on an area of the territory that has been heavily underexplored called the Shreiber-Hemlo Greenstone Belt.
This region’s potential has been well established by Barrick Gold’s Hemlo project, which has produced more than 21Moz historically. However, because ownership of the area has historically been so fractured between different owners, the sort of systematic exploration needed to establish more mines simply hasn’t take place.
First Class is changing this.
As one of the region’s largest landholders, it is completing large-scale systematic exploration in areas where it has never taken place before. What’s more, it is doing it with state-of-the-art surveying, analysis, and drilling technology that easily overcomes many of historical barriers to exploration.
All great, of course. But it’s only worth doing this work if the land First Class is exploring stands a shot at hosting one or more economic discoveries.
Again, this is another area where the company shines.
It’s flagship North Hemlo project sits on the northern limb and presents a number of geological similarities to Barrick’s nearby Hemlo project. It is exactly these sorts of parallels that are being exploited with considerable early-stage success by the company’s neighbours Palladium One, Hemlo Explorers, and Panther Metals.
Meanwhile, two other priority projects in First Class’s portfolio are Esa and McKellar, which also lie close to Hemlo and are demonstrating encouraging early signs of mineral potential.
Elsewhere, alongside a number of other exciting longer-term opportunities, First Class also already boasts a joint venture with Palladium One over its Pickle Lake project. Sitting on North Hemlo’s eastern flank, this asset contains the West Pickle Lake anomaly, which is thought to represent a continuation of the mineralised zones at the highly prospective Tyko nickel, copper, and cobalt project.
Given the quality of its leadership and the prospectivity and location of its projects, it’s no wonder First Class already counts Power Metal Resources as a 28% shareholder. And with the business raising £1.13m as part of its IPO, it now has the funds in place to accelerate the rate of exploration across its entire portfolio for some time.
It will be interesting to keep an eye out for results from the field from the company over the coming weeks and months.
But the point is, given the solid foundation First Class has established, backing the company at this early stage could maximum upside exposure in the event of its success.
Author: Michael Johnson
Disclaimer: The author has been paid for the production of this piece by the company or companies mentioned above and also owns shares in the company or companies mentioned above.
