Proposed Strategic Investment by Seventy Ninth Group via Conditional Subscription
First Class Metals PLC the Canada focused precious and base metal explorer, with extensive land holdings in northern Ontario, announces that it has entered into a conditional subscription agreement (the “Subscription Agreement”) with The 79th GRP Limited (“Seventy Ninth Group” or the “Investor”) regarding a proposed investment (“Proposed Investment”).
Highlights:
· Proposed Investment in two stages by Seventy Ninth Group of approximately £2.18 million subject, inter alia, to FCM shareholder approval
· On completion of both stages of the Subscription Agreement, Seventy Ninth Group will own approximately 51.2% of the enlarged share capital of FCM
· Strategic investment to accelerate the development of project portfolio
· Potential for business synergies to create new project acquisition opportunities
· Deal will represent Seventy Ninth Group’s first external equity investment in the exploration sector
James Knowles, Executive Chairman, commented:
“We are delighted to announce the proposed significant investment in First Class Metals by Seventy Ninth Group, a diversified asset manager with a track record of deal selection and value creation. The deal will provide FCM with an enhanced capability to unlock the potential of our northern Ontario assets. This investment demonstrates the strength of our proposition, particularly against the challenging backdrop of UK capital markets. Securing funding of this nature is essential to advancing our exploration efforts and building shareholder value. With the backing of Seventy Ninth Group, a supportive partner with global reach, we are well-positioned to drive forward our projects efficiently and responsibly.”
David Webster, Chairman of The Seventy Ninth Group, commented:
“I am delighted that Seventy Ninth Group is making this investment in First Class Metals. As an international conglomerate, we will utilise our global presence to add value across the portfolio and apply the full support of the group’s expertise in developing and financing assets. As we already hold exploration projects in the Republic of Guinea and Ontario, Canada, this investment strengthens our position in the global mining industry whilst giving us increased exposure to a top-tier mining jurisdiction.”
The Seventy Ninth Group Investment Terms
The proposed investment (“Subscription”) is to be completed via a direct subscription into the Company in two stages for a total 128,500,000 ordinary shares of £0.001 (“Shares”) at 1.7p per Share (“Subscription Shares”).
The first stage of the Subscription consists of 78,552,084 Shares (“Stage 1 Shares”) and uses the Company’s current shareholder authority to issue shares on a non-pre-emptive basis, subject to the publication of an FCA approved prospectus and shareholder approval of a Rule 9 Waiver at a General Meeting of the Company (“GM”).
The second stage of the Subscription consisting of 49,947,916 Shares (“Stage 2 Shares”) will be issued subject to additional shareholder authority at a second GM to allot additional shares and disapply pre-emption rights along with shareholder approval for a second Rule 9 Waiver.
Seventy Ninth Group does not currently hold any Shares in the Company however it has lent £500,000 to the Company in two tranches as announced on 13 June 2024 and 8 October 2024 and under the terms of the Subscription Agreement such loans together with accrued interest will be capitalised by the issue of new Shares as part of the Subscription. Following the issue of the Stage 1 Shares, Seventy Ninth Group will hold 78,552,084 Shares in the Company equating to approximately 41.0% of the enlarged share capital of the Company. After the issue of the Stage 2 Shares, Seventy Ninth Group will hold 128,500,000 Shares equating to 51.2% of the enlarged share capital of the Company. The percentage of the enlarged share capital after completion of Stage 1 of the Subscription takes into account the issue, simultaneously with such completion, of (a) 5,995,332 Shares to Mr Ayub Bodi in repayment to him of Shares lent to the Company on 24 November 2023 (b) 5,882,353 Shares to OnGold Investment Corp. under the Ongold Agreement dated 26 June 2024 and (c) 492,352 Shares to Broken Rock Resources Limited under the Quinlan Agreement dated 21 March 2024. The percentage of the enlarged share capital after completion of Stage 2 of the Subscription takes into account the issue, simultaneously with such completion, of 9,500,001 Shares to Mr James Knowles in repayment to him of Shares lent to the Company on 2 August 2024.
Immediately following the issue of the Stage 2 Shares, the Investor will also be issued 64,250,000 warrants in the Company exercisable at 5p within three years of issue and 64,250,000 warrants exercisable at 10p within five years of issue.
Investment Conditions
Completion of the issue of the Stage 1 Shares is subject to (i) publication of an FCA approved prospectus, (ii) shareholder approval by independent shareholders of a waiver in accordance with Rule 9 of the Takeover Code and (iii) admission of the Stage 1 Shares to the Official List and to trading on the Main Market of the London Stock Exchange plc (“First Admission”).
Completion of the issue of the Stage 2 Shares is subject to (i) First Admission having occurred; (ii) the Company having the necessary shareholder authorities to issue the Stage 2 Shares, including disapplication of pre-emption rights, (iii) approval by independent shareholders of a waiver in accordance with Rule 9 of the Takeover Code; and (iv) admission of the Stage 2 Shares to the Official List and to trading on the main market of the London Stock Exchange plc.
At First Admission the following board changes will be implemented:
i) David Webster will be appointed as a director of the Company and will become non-executive chairman
ii) James Knowles will step down as Executive Chairman and will become an executive director
iii) Marc Sale will cease to be a director of the Company and will retain the role of CEO
Further announcements will be made in due course on the Investment.
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: Home | First Class Metals (firstclassmetalsplc.com)
For further information, please contact:
James Knowles, Executive Chair
Email: JamesK@Firstclassmetalsplc.com
Tel: 07488 362641
Marc J Sale, CEO
Email: MarcS@Firstclassmetalsplc.com
Tel: 07711 093532
