Shares in First Class Metals PLC fell sharply after the company unveiled revised funding to accelerate drilling at its Sunbeam Gold Project in Ontario.
The stock dropped 14% to 1.6p, reflecting investor concerns over dilution after part of an existing convertible loan note (CLN) was converted into equity at 1.52p per share.
The £650,000 funding package includes an immediate £250,000 conversion into new shares, with the remaining £400,000 subject to a 45-day conversion lock-up, potentially extendable by a further 45 days.
The fundraise was triggered by the discovery of visible gold in drill core, a positive early indicator of mineralisation that has prompted the company to accelerate exploration.
To mitigate dilution, the company is also launching a WRAP retail offer via Winterflood, targeting up to £250,000 on the same terms.
Proceeds will primarily fund follow-up drilling at Sunbeam, particularly in the Pettigrew area, alongside additional work across its wider Ontario portfolio, including geophysical surveys at North Hemlo and early-stage exploration on newly acquired rare earth element (REE) assets.
James Knowles, Executive Chairman, commented:
“The observation of visible gold in recent Sunbeam drill core is a highly encouraging development and further reinforces our confidence in the project’s potential. This amended funding structure allows the Company to move quickly and decisively to accelerate follow-on exploration at a critical time, while doing so from a position of increased financial strength.
We have placed significant emphasis on fairness, ensuring that existing shareholders have the opportunity to participate on the same terms as this funding via the Winterflood’s WRAP offer.
With momentum building at Sunbeam, alongside a number of near-term developments across the portfolio, we believe the Company is well positioned to capitalise on recent success and advance into what we see as a highly value-defining phase.”
