First Class Metals PLC, the UK-listed exploration company advancing high-grade, district-scale gold opportunities in Ontario, Canada, is pleased to announce that it has entered into a new interest-free Convertible Loan Note Instrument (“CLN” or the “Convertible Loan Notes”) with an international investor (the “Investor”) for up to £1,000,000.
Highlights and Funding Overview
· The Company has secured funding in order to advance its maiden drill programme on the Sunbeam Property and general working capital requirements.
· Under the terms of the CLN, the Investor has agreed to subscribe for up to £1.0 million interest-free convertible loan notes of £1 each, to be issued in tranches, with a twelve-month maturity from the date of the instrument.
· The first tranche of £350,000 has been agreed and is expected to be drawn shortly, with further tranches available in accordance with the terms of the CLN.
· The Convertible Loan Notes are interest-free and are convertible at the option of the Investor at a price equal to 82% of the lowest daily VWAP over the five trading days immediately prior to the submission of a conversion notice. Conversion of any outstanding balance is mandatory at maturity, subject to statutory shareholding limits.
· The Company retains the right, prior to maturity, to redeem the Convertible Loan Notes at 125% of their nominal value.
· A 2% commitment fee is payable in respect of each tranche and may be offset against the subscription proceeds at drawdown.
· The CLN additionally provides the Investor with warrants for each tranche equalling to 35% of the convertible loan notes comprising that tranche (with a maximum of 350,000 warrants for the 1,000,000 loan notes). The subscription price for each warrant is 120% of the closing price of an ordinary share on the business day immediately preceding the day of the subscription of the tranche. The warrants will be exercisable at any time within three years from the date of grant.
· In connection with the subscription of the first tranche, the Company will issue 4,803,922 warrants exercisable at 2.55 pence per share.
· Payment of final CAD$ 100,000 due to the Kerrs Gold property option holders to be made in order to acquire a 100% ownership of the Property.
Use of Proceeds & Corporate Update
The proceeds of the Convertible Loan Notes will be used to initiate a drill programme at the Company’s Sunbeam Property in Ontario, Canada and provide for general working capital requirements.
Operationally, the location of the initial drill targets at Sunbeam requires hard-frozen ground conditions to ensure safe and effective access. These conditions are now present during the Ontario winter season, enabling the Company to advance drilling. A drill programme is currently being designed, and the Company will provide further updates on rig mobilisation and programme timing.
In addition, the Company is accelerating the final cash consideration of CAD$100,000 payable to the option holders of the Kerrs Gold Property. Upon completion of this payment, First Class Metals will hold a 100% ownership interest in the Kerrs Gold Property, which hosts a historical resource of approximately 386,000 ounces of gold.
James Knowles, Executive Chairman, commented:
“This funding agreement is a deliberate and strategic step to ensure First Class Metals is fully capitalised to act decisively at a critical point in our operational calendar. The ability to advance programmes at the right time is fundamental to maximising value in an exploration-led business. Given the well-publicised move higher in gold prices to new all-time highs in the last few months, we believe now is the time to progress our portfolio on multiple fronts.
At the same time, the Company is completing the final steps to secure full ownership of the Kerrs Gold Property, a substantial gold asset with a defined 386,000-ounce gold resource. The Company felt this to be a prudent step considering market factors and ensuring the Company has the flexibility to make quick decisions in relation to the Property.”
For Further Information:
Engage with us by asking questions, watching video summaries, and seeing what other shareholders have to say. Navigate to our Interactive Investor hub here: https://firstclassmetalsplc.com
For further information, please contact:
James Knowles, Executive Chair
Email: JamesK@Firstclassmetalsplc.com
Tel: 07488 362641
Marc J Sale, CEO and Executive Director
Email: MarcS@Firstclassmetalsplc.com
Tel: 07711 093532
