Dear Shareholders,
As we enter 2026, I’d like to share my optimism and excitement for First Class Metals (FCM). Last year brought record-breaking precious metal prices and a surge in interest for critical minerals – trends that create a highly favourable backdrop for our company. Below, I’ll highlight the key drivers shaping our outlook and the major projects positioning FCM for success this year.
- Record Precious Metal Prices Fuel Positive Momentum
Gold and silver have soared to all-time highs, underscoring the strength of the precious metals market. Gold achieved over 50 record highs in 2025 and gained more than 60% in value, historic rally driven by global economic uncertainty, a weaker U.S. dollar, and strong safe-haven demand. Silver has likewise reached unprecedented levels, recently touching $79/oz (up from ~$29 at the start of the year). These remarkable price levels reflect robust investor confidence in precious metals as stores of value.
Looking ahead, the outlook for gold in 2026 remains very encouraging. Major financial institutions see continued strength for gold prices, for example, Goldman Sachs projects gold could reach around $4,900/oz by the end of 2026 in its base case. Ongoing central bank buying and potential interest rate cuts are expected to support gold further. What this means for FCM is greater leverage on our gold projects: every ounce in the ground becomes more valuable in this high-price environment, improving the economics of exploration and potential development. High precious metal prices also generally spark increased investment and M&A activity sector-wide, a trend we believe will benefit junior explorers like FCM in terms of visibility and funding opportunities.
- Critical Minerals Boom: REEs and Lithium in the Spotlight
Beyond gold and silver, the world’s push for electrification and supply chain security is fuelling a boom in critical minerals like rare earth elements (REEs) and lithium. Governments and industries are urgently seeking to secure non-Chinese sources of these elements. Rare earths – used in EV motors, wind turbines, and defence technologies – are now at the centre of new policies and investments aimed at building domestic mine-to-magnet supply chains. This macro trend underscores the strategic value of diversified explorers such as FCM. While our primary focus is gold, we are also positioned in the critical minerals space through our lithium and base metal projects.
Lithium prices, after a pullback in 2023-24, staged a strong recovery in 2025. In fact, spodumene concentrate prices surged about 64% since mid-year to roughly $1,135/t by December and battery-grade lithium carbonate jumped ~45% over the same period. This rebound has been driven by robust demand growth (over 30% year-to-date increase in global lithium consumption) coupled with supply adjustments. Importantly, lithium’s fundamentals appear strong going into 2026: electric vehicle sales and grid-scale battery deployments continue to accelerate, supporting a firm pricing environment. For FCM, this resurgence in lithium bolsters the potential of our Zigzag Lithium Project and validates our strategy to maintain exposure to battery/critical metals alongside gold.
- North Hemlo: Maiden Drilling Kicks Off a New Chapter
One of our proudest achievements in 2025 was commencing the maiden drill program at North Hemlo, truly a milestone for FCM. In November, we secured funding and mobilised a drill rig to test the Dead Otter Lake trend on our North Hemlo property. This initial campaign (approximately 750m of core drilling is targeting high-priority gold anomalies including the “19-grammer” zone where surface sampling returned 19.6 g/t gold. Drilling marks a significant step forward in unlocking North Hemlo’s potential. As our CEO Marc Sale noted, “the initiation of drilling…is not only an exciting exploration stage for FCM and an enhancement of the potential of the North Hemlo block, but it is a significant event in the development of FCM as an exploration company.”
Our team is eagerly awaiting assay results from this first round of drilling (expected in Q1 2026). North Hemlo lies in the world-class Hemlo mining camp, an area with over 23 million ounces of historical gold production from the Hemlo mine. Notably, the Hemlo mine changed hands in 2025, with Barrick selling it to a new operator (Hemlo Mining Corp.) who is reinvigorating the camp. This renewed regional focus only enhances the significance of our 115+ km² land package at North Hemlo. We are neighbours to a prolific gold producer, yet the surrounding belt remains surprisingly under-explored beyond the main mine area. This presents an exciting opportunity for FCM to make a new discovery in a proven district. With drilling now completed and a supportive gold market, North Hemlo will remain a priority in 2026 as we strive to deliver exploration success for our shareholders.
- Sunbeam Gold Project: A District-Scale Opportunity Ready to Be Unlocked
Following closely on North Hemlo’s heels is our Sunbeam Gold Project, which we believe represents a true district-scale gold opportunity and alongside North Hemlo is a clear joint flagship asset for First Class Metals.
Sunbeam is located near Atikokan in northwestern Ontario and now covers a large, 95km2+ contiguous land package following recent property additions. These acquisitions have materially enhanced the scale and strategic coherence of the project, allowing us to take a district-wide view of the geology rather than a narrow, single-deposit approach.
The project is defined by three major mineralised trends, each extending for more than 10 kilometres, providing multiple parallel targets across a highly prospective structural corridor. Importantly, Sunbeam sits between two Agnico Eagle–owned projects, Hammond Reef and Malema, placing FCM in the middle of an established and actively explored gold district. This location underscores both the geological pedigree of the area and the broader strategic relevance of our land position.
At the heart of the project lies the historic Sunbeam Mine, a past-producing underground operation active from 1898 to 1905. While historical mining focused on near-surface high-grade material, the district has seen remarkably little modern exploration. Historical sampling nevertheless highlights the quality of the system, with dump material returning assays as high as 122 g/t gold, pointing to the presence of a robust mineralised environment.
During 2025, we completed extensive groundwork at Sunbeam, including mapping, soil sampling and geophysical surveys, which have significantly refined our understanding of the district and prioritised multiple drill-ready targets across the three main trends. This work has set the stage for a renewed and aggressive exploration focus in 2026, moving beyond the historic mine footprint and testing the broader district potential.
With gold prices at record levels and a renewed market focus on large-scale discovery potential, Sunbeam’s consolidated ownership, full permitting and drill-ready status place the project in a highly favourable position. Our objective is clear: to unlock the full district-scale potential of Sunbeam and demonstrate that this long-overlooked camp can deliver a meaningful modern gold discovery.
I am genuinely excited about what Sunbeam represents for First Class Metals, and I look forward to updating shareholders as we finalise and execute our 2026 work programmes.
- Kerrs Gold Deposit: 386,000 oz Resource – Value and Optionality
In addition to our exploration-stage projects we have the Kerrs Gold Project in the prolific Timmins camp, which we optioned in early 2024. Kerrs comes with a substantial historical NI 43-101 resource of ~386,000 ounces of gold (inferred). This resource gives FCM a tangible gold asset “in the bank,” so to speak, providing underlying value and optionality for our company. The deposit lies in the Abitibi Greenstone Belt of Ontario, one of the world’s great gold regions.
The significance of Kerrs’ 386k oz resource has only grown in light of 2025’s gold price surge. At today’s near-record prices, those in-situ ounces are more valuable than ever. This creates exciting optionality for FCM: Our immediate plan is to evaluate the best path to unlock value from Kerrs without distracting from our core exploration focus. This could include updating the resource with new data, or even examining novel opportunities. Rest assured, we will remain disciplined and creative in realising the full worth of this asset for shareholders. In the meantime, Kerrs’ sizable gold inventory serves as a solid underpinning to FCM’s overall portfolio valuation – a reassuring asset as we pursue the high-upside exploration plays.
- Zigzag Lithium Project: Capitalizing on a Rebounding Battery Metals Market
Turning to our critical metals portfolio, the Zigzag Lithium Project provides FCM with exposure to the rapidly rebounding lithium market. Zigzag, located near Armstrong in northwestern Ontario, is a highly prospective pegmatite lithium property that we optioned in 2023. In late 2023, we conducted an initial drill programme at Zigzag and reported extremely encouraging results, confirming the presence of lithium-bearing pegmatites that remain open along strike and down dip. With lithium prices recovering strongly through 2025 and into 2026, the timing is excellent for us to advance Zigzag and attract interest in this asset.
The macro environment for lithium has improved markedly: as noted earlier, spodumene (lithium concentrate) prices have climbed significantly off their lows, thanks to surging demand from EVs and energy storage. Industry analysts highlight that the lithium market has “stabilized and strengthened” in the second half of 2025, global battery usage growing and inventories tightening. Crucially for FCM, the region around our Zigzag project is emerging as a strategic lithium hub. Just to our south west, Green Technology Metals is developing the Seymour Lake lithium deposit (near Armstrong) with support from the Canadian government, aiming to establish Ontario’s first lithium mine by 2026. Significant infrastructure investments – such as road upgrades and financing packages, are flowing into this district, signalling that Northwestern Ontario is poised to become a key supplier of battery-grade lithium. Zigzag lies along the same geological trend, in a belt that already hosts multiple spodumene-bearing pegmatites. This gives us confidence that Zigzag’s potential value is on the rise alongside our neighbours’ progress.
Zigzag is a valuable asset in our portfolio of critical mineral projects, and we are excited by the opportunities it presents in the year ahead.
- Embracing 2026: Growth, Discovery and Value Creation
In summary, FCM enters 2026 in an excellent position: we have a perfect confluence of a strong commodity backdrop and a portfolio of high-impact projects that are either drilling or drill-ready. The record precious metals prices and heightened interest in critical minerals provide wind in our sails as we navigate forward. We have drilled North Hemlo with results pending, preparing to advance Sunbeam, a truly exciting high-grade gold target and strategizing to advance Kerrs and Zigzag to maximize their value. Few junior companies our size enjoy this breadth of assets, in tier 1 jurisdictions, ranging from precious to battery metals, and from early-stage discovery plays to a solid gold resource. This diversification, underpinned by a clear focus on exploration excellence, gives us resilience and multiple shots at success.
Most importantly, I want to convey a sense of enthusiasm and confidence for what’s ahead. Our team is energised by the progress made in 2025 and the prospects unfolding in 2026. The tone within FCM is optimistic yet measured: we understand the challenges inherent in exploration, but we believe wholeheartedly that our best discoveries and value-creating moments lie ahead of us.
On behalf of the Board and management, I thank all FCM shareholders for your unwavering support, patience and we are committed to rewarding it by unlocking the rich potential of our projects in this favourable climate. Here’s to a prosperous and exciting 2026 for First Class Metals, may it be a year of significant discoveries, growth, and success for us all.
For and on Behalf of The FCM Management Team
James Knowles
Executive Chairman
