Fulcrum Metals plc (AIM: FMET) has signed a non-binding term sheet for a US$20 million royalty financing with Chancery Royalty Ltd, alongside a £200,000 strategic equity investment, providing a potential non-dilutive funding route for the development of its Teck-Hughes tailings project in Ontario, Canada.
Under the proposed agreement, Chancery Royalty would acquire a 5% net smelter return (NSR) royalty over future gold production from the Teck-Hughes project for US$20 million. Fulcrum would retain the right to repurchase 2% of the royalty for US$10 million within two years of commercial production commencing.
The royalty financing is intended to support the advancement of Teck-Hughes towards production while allowing Fulcrum to retain full ownership and operational control of the project.
Review: Fulcrum Metals, from historic gold tailings to a scalable Ontario recovery platform
Strategic shareholder joins register
Alongside the proposed royalty agreement, Chancery has subscribed for £200,000 of new Fulcrum shares at 8.5p per share, acquiring 2.35 million shares, representing approximately 1.5% of the enlarged issued share capital.
The investment also includes warrants over an additional 2.35 million shares exercisable at 11p per share over the next two years.
Validation of technology-led strategy
Chief executive Ryan Mee said the agreement represented important third-party validation of Fulcrum’s strategy to build a scalable mine waste recovery business using Extrakt Process Solutions’ cyanide-free processing technology.
He noted that Teck-Hughes, which has an initial conceptual production profile of around 12,000 ounces of gold annually, represents the first step in establishing a broader platform to recover precious and critical metals from historic mine waste.
Chancery Royalty chief executive Jeremy Gray said Fulcrum’s innovative processing technology and environmental focus made it an attractive long-term royalty partner, adding that the relationship could expand as Fulcrum develops additional mine waste projects.
Subject to further milestones
The proposed royalty financing remains non-binding and is subject to successful pilot-scale testing, technical due diligence, environmental and permitting reviews, board approvals and the execution of definitive agreements.
If completed, the deal would provide Fulcrum with a significant source of non-dilutive development capital while establishing a framework for potential future royalty agreements across its expanding mine waste recovery portfolio.
