Consolidated Annual Report and Financial Statements
For the Year Ended 31 December 2023
(Company Number: 13158545)
13 June 2024
First Class Metals Plc
Company Information
Directors Marc Sale - CEO
James Knowles – Executive Chairman
Ayub Bodi – Executive Director
(resigned on 2 February 2024)
Andrew Williamson NED
(appointed on 15 October 2023)
Marc Bamber – NED
Danesh Varma – NED
(resigned 15 October 2023)
Company Secretary Siddharth Muricken
Registered Office Suite 16
Freckleton Business Centre Freckleton
Street
Blackburn
BB2 2AL
Financial Advisors Novum Securities
2
nd
Floor
7-10 Chandos Street
London
W1G 9DQ
Auditor Royce Peeling Green Limited
The Copper Room
Deva City Office Park
Trinity Way
Manchester
M3 7BG
Corporate Lawyers to the
Company
OBH Partners
17 Pembroke Street Upper
Dublin2
Ireland
D02 AT22
Lawyers to the Company as to
Canadian Law
Peterson McVicar
18 King Street East
Suite 902
Toronto
Ontario
M5C 1C4
Canada
Registrars Share Registrars Limited
Molex House
Millennium Centre
Farnham
Surrey
GU9 7XX
Company Website
www.firstclassmetalsplc.com
TABLE OF CONTENTS
HIGHLIGHTS............................................................................................................................................... 1
CHAIRMAN’S STATEMENT ............................................................................................................... 3
OPERATIONS REPORT ...................................................................................................................... 6
CEO’s Review on the Company Portfolio, Strategy and Operations ...................................................................... 6
Overview of Operations ................................................................................................................................... 9
Summary, strategy, and conclusions ................................................................................................................. 52
STRATEGIC REPORT ...................................................................................................................... 53
Key Performance Indicators .......................................................................................................................... 53
The principal risks and uncertainties .............................................................................................................. 54
CORPORATE GOVERNANCE REPORT ............................................................................................. 60
Introduction ................................................................................................................................................ 60
Chairman’s Statement .................................................................................................................................. 60
Audit Committee Report ............................................................................................................................... 66
Remuneration Report ................................................................................................................................... 68
DIRECTOR’S REPORT ............................................................................................................................... 72
Principal Activity ......................................................................................................................................... 72
Dividends .................................................................................................................................................... 72
Directors ..................................................................................................................................................... 72
Directors’ Indemnity Provisions ..................................................................................................................... 72
Donations .................................................................................................................................................... 72
Share Capital ............................................................................................................................................... 72
Substantial Shareholdings ............................................................................................................................. 72
Board of Directors ........................................................................................................................................ 74
Board Activities ........................................................................................................................................... 75
Statement of Directors’ Responsibilities in respect of the Annual Report and the financial statements ...................... 76
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 ..................... 79
1
HIGHLIGHTS
A summary of the company’s highlights for the year 2023 follows:
Corporate
26th June 2023 – The Company raised £1,049,170 raised via an oversubscribed placing, subscription, and warrant
conversion through the issuing of 9,974,000 shares (placing & subscription) and 375,000 shares warrant conversion
all at 10p per share.
16th October 2023 – The Company appointed of Andrew Williamson as a Non-Executive Director.
24th November 2023 – The Company raised £603,000 via a placing through a directors share loan of 11,990,665
shares at 6p per share.
Exploration and Operations
The Company obtained 6 exploration Permits granted on its North Hemlo, Sunbeam, Zigzag, Esa McKellar and
Enable properties.
The Company signed agreement with four First Nations being: Whitesand First Nation, Lac Des Mille Lac First
Nation, Lac La Croix First Nation, and Netmizaaggamig Nishnaabeg First Nation.
There was confirmation of 19g/t gold assays at the North Hemlo property.
The Company completed a successful stripping programme at Sunbeam with high grade results.
The results of a soil sampling programme conducted confirms robust gold anomaly at Esa.
The Company completed channel sampling and drilling at the Zigzag property.
Post-Period
Quinlan
The Company entered into an exclusivity agreement with Broken Rock Resources (‘BRR’) which was consolidated
into an Option agreement on March 20, 2024. The Quinlan property contains 98 claims with FCM staking 50 claims
and 48 claims being optioned from BRR. The Agreement with BRR required an execution payment of CAD$10,000
in cash and CAD$15,000 in FCM shares. The property contains a significant lithium anomaly in a lake sediment
sample collected by the Ontario Geological Survey (OGS). The contractual work requirement for year 1 on the
property is a sum of CAD$50,000.
Full details of the Agreement were in RNS of March 21, 2024.
Kerrs Gold
The Company entered into an exclusivity agreement with (1544230 Ontario Inc. and Gravel Ridge Resources) for a
sum of CAD$ 5,000, and this was consolidated into an Option agreement on April 21, 2024. The property contains
36 single cell mining claims, totalling approximately 665 hectares and lies 90 kilometres east-northeast of Timmins
Mining Camp.
The Kerrs Gold Project contains a historical NI43-101 compliant resource (2011), of 386,467 Oz Au.
Full details of the Agreement were in RNS of April 22, 2024.
McInnes Lake
In March 2024, the Company entered into an exclusivity agreement with Emerald Geological Services (‘EGS’) in
order to acquire certain mining claims. The Company is progressing due diligence on these claims with the intention
of entering into an option agreement which would grant the Company rights to acquire these claims in a staged
manner.
OJEP
In addition to the CAD$ 200,000 received by the Company in 2023, The Company received a further CAD$200,000
OJEP Grant from the Canadian Ministry of Mines for the Zigzag lithium & critical metals property for work
completed during 2023 in April 2024. The receipt of the cash credit for the 2023 Zigzag OJEP Grant was received in
April 2024 but is accounted for within the 2023 financials.
2
McKellar and Enable divestment to the 79th GRP Limited
In June 2024, an agreement was reached with the 79th GRP Limited to sell 100% of the McKellar and Enable projects.
The combined sale price is GBP £270,000
Term Loan with the 79th GRP Limited
In addition to the ‘McKellar and Enable’ assets sale, FCM has entered into a £230,000 working capital term loan
with eh 79th GRP Limited in May 2024.
3
CHAIRMAN’S STATEMENT
For the Year Ended 31 December 2023
Dear Shareholders,
I am pleased to present the Chairman's statement for the year 2023, a year that has seen exciting developments and
notable achievements for First Class Metals (FCM).
Throughout the year, we have made significant progress, starting with the initial discovery at Dead Otter (North
Hemlo). This discovery has opened up new opportunities for further development of the North Hemlo property. We
are optimistic about the potential that this project holds for FCM's future.
In late 2022, we completed the strategic acquisition of Sunbeam, which has proven to be a positive move for FCM.
During 2023, we have made substantial strides in advancing the development of Sunbeam, which has shown great
potential for our overall growth trajectory. We are enthusiastic about the continued progress of this project.
We have also further advanced the Zigzag Lithium/Critical Metals property, which adds value to our portfolio of
prospects. FCM's carefully selected property assets in northwest Ontario, Canada—known for its favourable mining
conditions—provide us with a strong foundation for exploration. We remain focused on gold, semi-precious metals,
and battery metals critical to the evolving energy storage and power generation sectors.
At present, FCM maintains exposure to ten exploration projects, each showcasing potential in a variety of commodities
such as gold, lithium, nickel, copper, zinc, molybdenum, and rare earth elements (REE). This diversification positions
us for growth and establishes FCM as a relevant player in the exploration industry.
In January 2023, FCM proudly announced the discovery of a noteworthy gold and molybdenum trend on the North
Hemlo (Dead Otter Trend) extending over 3 kilometres. This discovery had several gold assays exceeding 1 g/t, with
the highest recorded at an impressive 19.6 g/t. We believe this discovery to be one of the highest occurrences of gold
on the Northern portion of the Hemlo area. Subsequent work conducted throughout 2023 further supported and
reinforced the potential of this expanding discovery.
In June, FCM engaged in extensive consultations with our First Nation partners, which culminated in the submission
of exploration permit applications for North Hemlo and Esa to the Ontario Ministry of Mines. These applications
sought permission for invasive exploration methods such as drilling, mechanical stripping, and trenching on the
properties. We are pleased to announce that in November, both permits were granted approval, representing a
significant milestone for FCM. This achievement signifies that both properties have achieved a drill-ready status, with
the necessary permits in place to facilitate further exploration activities.
We successfully raised £1,049,170 @ 10p per share with a broker led placing alongside a private subscription
(Directors Purchase of £37,500 by Marc Sale CEO) and a warrant conversion in late June 2023. The funds were used
to further develop the company’s exploration activities across its portfolio.
In the second half of 2023 exploration commenced on the Zigzag property with an initial grab sample campaign which
produced a successful first pass of exploration over the property with multiple samples reporting +1% Lithium. This
focussed work started to define a 400m ‘core’ zone of interest. FCM returned to complete a channel sampling campaign
in early autumn. The results from the channels were announced in November. Again, a significant number of the
channels returned samples of +1% Lithium with an outstanding highlight of 2.36% lithium (Li
2
O) over 5.5m.
In late December 2023, FCM commenced its inaugural drill program with a 500m diamond drill program focused on
the core zone at Zigzag. Results announced in February exceeded all expectations. Numerous intercepts over 1%
lithium with some very interesting elevated critical/technology metal grades in Rubidium, Tantalum & Caesium.
We successfully completed a second broker led fundraising of 2023 in November raising £603,000, the funds supported
the company working capital position and allowed repayment of the Sanderson Capital Partners outstanding £500,000
convertible loan note (Sanderson CLN).
4
We have through 2023 developed the business to a point at which the portfolio may be rapidly commercialised via sale
or JV/Earn in:
Zigzag Lithium and Critical Metals: successfully drilled and open on strike and depth with a second potential
trend identified to the South. The property is fully permitted and is located in a prime location, sat between several
developing lithium projects on the Seymour/Falcon Lake lithium belt. A large hydro scheme at Jackfish River 7km
south of Zigzag Lake is under consultation and there are numerous advanced stage studies from other project
developers for construction of key infrastructure including a spodumene benefaction plant at Seymour Lake (Green
Technology Metals Limited ASX:GT1).
North Hemlo: the Dead Otter Trend was extensively worked in 2023 with further encouraging results. The
granting of the exploration permits further enhances the prospects of the property and we look forward to carrying out
more invasive exploration in 2024.
Esa: soil sampling results in 2023 gave further credence to the ‘Esa Shear Zone’ theory which is a 4.5km trend
with anomalous gold and pathfinder finder elements present. A limited stripping program in November will be followed
up in 2024.
Sunbeam: early season prospecting helped gain a more in-depth geological knowledge of the property and the
wider ‘English Option’ ground. This was followed up by two stripping and channel sampling campaigns around the
historical workings of the Sunbeam Mine, Roy, and Pettigrew shafts.
Results from the channel sampling across all three sites peaked at 18.8 g/5 Au at Roy with multiple results above 1 g/t
across the sample locations. Pleasingly up to 4.98g/t Au was discovered in the porphyry at Roy. Significantly
the discovery of gold within the sheared and altered porphyry could add significant upside to what was thought to be
predominantly a high-grade vein system hosted in mafic schist, from which the known historic production was mined.
This will form a focus for future exploration activity in 2024.
We are continuously evaluating and advancing various strategies to enhance the value of our portfolio and ensure the
sustainable growth of the company.
To this end, we are exploring potential joint ventures, partial divestments, or even project sales that align with our
objective of maximizing value within the shortest possible timeframe. Our board of directors is fully committed to
exploring innovative ways to unlock the full potential of our assets and capitalize on strategic opportunities as they
arise.
With the recent addition of the Quinlan, and the Kerr Gold properties (also the potential addition of the McInnes Lake
property), we have achieved a well-balanced portfolio that provides us with multiple options for divestment and
renewed focus on developing the next set of promising prospects. This strategic balance enables us to navigate the
market dynamics effectively and strategically allocate our resources for sustained growth.
We understand that adaptability and flexibility are key to success in the ever-evolving metals exploration industry. By
actively assessing our options and making informed decisions, we are positioning FCM to capitalise on opportunities
and drive value creation for our shareholders.
The activities undertaken by First Class Metals (FCM) during the period have been very positive, and we would like
to extend our thanks to our dedicated exploration teams in Canada led by Emerald Geological Services for their
unwavering drive and determination.
The momentum generated during this period will continue to be a central pillar of our overall strategy moving forward.
As we look ahead, we are excited to build upon this strategy in the coming year. Our priority is to provide our
shareholders with a clear and well-defined vision for the future development pathway of our substantially advanced
exploration project pipeline. We recognize the importance of transparent communication and are committed to keeping
our shareholders well-informed about our progress and strategic goals.
5
Our team remains dedicated to delivering sustainable growth and striving for excellence in all aspects of our operations.
By prioritising disciplined exploration, responsible exploration practices, and prudent portfolio management, we are
confident in our ability to deliver long-term value to our shareholders.
James Knowles
Chairman
6
OPERATIONS REPORT
CEO’s Review on the Company Portfolio, Strategy and Operations
BACKGROUND
First Class Metals is a Canadian focused gold and critical metals explorer. The Company is focussed on exploring the
north-west region of Ontario. At the point of listing in July 2022, FCM, through its wholly owned subsidiary First
Class Metals Canada Inc (FCMC), held seven 100% owned properties. Geologically, these seven blocks lie within the
highly mineralised and prospective Hemlo-Greenstone Belt and the named extensions to the east and west.
Four of these discrete claim blocks and a fifth that forms the nucleus of the North Hemlo block were acquired from
Power Metals Inc. (“Power” or “Power Metals”) prior to listing as part of a pre-IPO agreement in which Power vended
the claims into FCM for a one-third stake in the pre-IPO entity.
Subsequent to listing, during the reporting period, FCMC has entered into three agreements, one covering the historic
Sunbeam gold mine, a second on the Zigzag hard rock lithium prospect and a third area contiguous and to the north of
the North Hemlo block being the ‘OnGold’ property.
The initial two agreements are with Nuinsco Resources Limited (Nuinsco) and the third a private company, OnGold
Invest Corp (OnGold). All properties are also located in north-west Ontario, see Figure 01. The details of both these
transactions have been provided in press releases.
Figure 01 showing the nine property blocks (10 properties) currently under the control of FCMC. Note: North Hemlo and
OnGold are contiguous and is considered one project
7
FCM, whilst constantly on the ‘look-out’ for quality Option or Purchase Agreements, consider the five core properties
contain significant potential and the business model adopted is to add value to the properties and then monetise the asset by
sale or Joint Venture (JV).
The following table and narrative details the portfolio of ten claims from west to east.
Area Owner Number of
Claims
Area
(km
2
)
Claim Types Minimum
Expenditure required
(CAD$)
Sunbeam and
Sunbeam extn.
FCM 1134
49.0
9 Single Cell Mining Claims
and 8 Multi-Cell Mining
Claims
88,800
Zigzag FCM 6
1.2
2 Boundary Cell Mining
Claims & 4 Single Cell
Mining Claims
2,000
Coco East FCM 30
6.3
9 Boundary Cell Mining
Claims, 21 Single Cell
Mining Claims
10,200
Enable FCM 41
8.7
9 Boundary Cell Mining
Claims, 32 Single Cell
Mining Claims
16,400
McKellar FCM 66
12.5
9 Boundary Cell Mining
Claims, 57 Single Cell
Mining Claims
23,600
Magical FCM 14
2.9
Single Cell Mining Claims 5,600
Esa FCM 86
20.6
1 Multi-cell Mining Claim,
85 Single Cell Mining Claims
38,800
North Hemlo FCM 394
82.7
Single Cell Mining Claims 157,600
North
Hemlo
Pezim II
FCM 49% 33
6.9
Single Cell Mining Claims 13,200
OnGold
Others 163
34.55
Single Cell Mining Claims
Sugar Cube FCM 205
42.7
Single Cell Mining Claims 82,000
268.05
438,200
Note: The assessment credits for the above properties have been applied and hence the only properties that need
expenditure in 2024 to remain in good standing are Coco East (CAD$) $8414 & Esa ($CAD) $28,533.
All the claim blocks have underlying Net Smelter Return (NSR) or similar royalty payments.
These generally fall into the three following categories but are detailed in the attached table and in the relevant
press releases pertaining to the individual transactions:
The following table is reproduced from the IPO prospectus with the addition of the Sunbeam and Zigzag
acquisitions and is relevant as of Dec 31, 2023.
8
9
Overview of Operations
The 2023 field season was a very successful one for First Class Metals as the first full year of activity and built
off the pre-IPO activities and post IPO exploration in 2022.
Significant advances were achieved on the flagship North Hemlo property. FCM, through its 100% owned
subsidiary First Class Metals Canada Inc., continued to explore several of the seven properties that formed the
portfolio on listing. Furthermore, significant prospecting and exploration was undertaken on the post-IPO
Sunbeam and Zigzag acquisitions. Other than limited lake sediment sampling in the winter of 2022/23 there was
no groundwork conducted on the Coco East, Magical or Sugar Cube properties in 2023. However, the Sugar Cube
property was subject to a low-level high definition VTEM geophysical survey.
The business / exploration strategy of FCM is similar in rationale and execution as that of many junior, newly listed
exploration companies: to value add to an exit event, by JV or sale. This approach can equally apply to the
company itself or individual projects in the Company’s portfolio.
The field season’s results reported to date for 2023 have advanced this business strategy significantly.
Notwithstanding the two significant acquisitions which also enhanced the Company’s appeal to investors.
FCM intends to continue this business model in 2024: to value add to the existing portfolio as well as to review
other opportunities in Ontario that will add potential to the company. However, the focus of any exploration company
is the timely undertaking of drilling. FCM successfully moved four of the key properties towards ‘drill ready’
status and undertook a maiden drill programme on the Zigzag hard rock lithium property.
Whilst the Company is monitoring its land position as well as expansion opportunities, the possibility of joint
venturing parts of the portfolio is always a consideration. The West Pickle Lake project area under JV with
Palladium One (renamed to ‘GT Resources’) in the north-east of the North Hemlo property is a clear example of
the success of this aspect of the Company’s strategy.
The following is an overview of the Company’s field activities resulting from the 2023 field season. Many of the
final assays were not received until 2024, though the work was completed, and samples submitted for analysis
during the reporting period.
The following sections detail the ten properties in a rough ranking order, from ‘core’ to ‘non-core’ and with respect
to the field work undertaken and further planned. Whilst most activities fall within the reporting period, events
noteworthy after 31 December 2023 are included in order to present an accurate account of activities.
10
The claim blocks detailed from core to non-core:
The ten claim blocks, (OnGold is contiguous to North Hemlo), covering almost 230km², are distanced by about 400km
from Sunbeam in the west to Sugar Cube in the east.
Hemlo area
The Hemlo Schreiber greenstone belt has two broad divisions, the south and the north limbs.
The Barrick Hemlo producing gold mine is located on the south limb and is associated in a macro sense with
shearing and increased molybdenum values. The Hemlo north limb in which the Esa and flagship North Hemlo
properties are located has three distinct shears identified by previous explorers. The shears in part transect both
properties, see Figure 02.
Figure 02 showing the regional geological and structural setting of the North Hemlo OnGold and Esa block (Hemlo
‘north limb’), relative to the Hemlo gold mine.
11
I. North Hemlo
The Flagship North Hemlo property historically comprised of three claim areas: Pezim I & II, and Wabikoba, that
weren’t contiguous. However, the addition of the Hemlo North block, acquired from Power Metals Plc., brought
North Hemlo together as one cohesive block, see Figure 03.
Figure 03 showing the composition of the North Hemlo claim blocks.
The entire property now extends across 448 claims covering ~98km², with the signing Agreement with OnGold the
property area was extended by 34.5km² (163 claims) which are contiguous to the north, see Figure 02. Note: 33 claims
are under effectively a Joint Venture agreement with Palladium One and FCMC’s ownership is reduced as per the
terms in the Joint Venture agreement.
There were limited historical showings on the property, the most important being the gold / molybdenum showing at
Dead Otter Lake which reported 3.1ppm Au, 0.59%Mo. Also, the geology / geophysical signature of the Dotted Lake
/ Fairservice prospect continues onto the North Hemlo block. Furthermore, the JV – Earn-in with Palladium One has
significantly enhanced the base, battery, and critical metal potential of the block.
Further potential is derived from the arcuate inferred shears which mimic the shear hosting the Hemlo gold mine, see
Figure 03.
An Exploration permit, required for ‘invasive’ exploration such as trenching, stripping, and drilling, was granted for
both the North Hemlo and Esa blocks in October 2023.
An Exploration Permit was granted by the Provincial authorities over North Hemlo in October 2023, this was closely
followed by the execution of an Exploration Agreement with Netmizaaggamig Nishnaabeg First Nation (NNFN) in
November 2023 (the agreement also covers the Esa claim block).
Exploration:
Whilst exploration to date by FCM has focussed in the southern sector around the Dead Otter Lake showing (3.7 g/t
gold ‘Au’ and 0.59% molybdenum ‘Mo’) exploration property wide has been enhanced with the low-level high-
resolution helicopter borne magnetic survey, see Figure 04.
The survey was a high-resolution heliborne magnetic survey covering the North Hemlo property (the survey did
12
not cover OnGold nor Pezim II) was flown in 2022.
Figure 04 showing the hi res. mag. survey conducted over the North Hemlo block, the OnGold and Pezim II claims
were not included in the survey.
The magnetic survey has shown that there are additional linear anomalies which require further exploration throughout
the property, especially where intersected by north-south and northwest structures. The survey highlighted the structure
hosting the Dead Otter Lake trend, ‘DOT’, as well as other potentially interesting features such as the extension of the
Dotted Lake mineralised zone. The intersections of the N-S and NW-SE structures in the central north sector are
veritable exploration targets as are the structures paralleling the DOT in the south. The magnetic interpretation
undertaken by Paterson, Grant & Watson (‘PGW’) confirms the belief that two arcuate structures, refer to Figure 02
pass through the claim block, the southern structure coinciding with the DOT and the northern structure with the
extension of the Fairservice showings at Dotted Lake.
The Dead Otter Lake area is situated about 20km north of the iconic Barrick Hemlo 23Moz Au producing mine.
During the season extensive work: prospecting, sampling, and mapping have been undertaken along the Dead Otter
Trend, the focus has been around the historical showing and the area reporting 19.6ppm Au over three kilometres to
the southeast. Whilst sampling to date has not replicated the historic value there is limited outcrop exposed owing to
water ingress. The presence of visible gold and gold being 'panned' from crushed rock may indicate that there is
potentially an issue with 'coarse gold' in the area of the historic showing.
13
Furthermore, the trend is reporting very high values of pathfinder elements including molybdenum as well as telluride
which is strongly associated with gold deposits especially in the Hemlo area. Additionally, over 750m SE along trend
from the historic showing an isolated outcrop returned 2.29ppm Au. This confirms the trend is auriferous. Furthermore,
in the area of the 19.6ppm sample other samples have reported 13.6ppm and 4.6ppm Au, see Figure 05.
Future work will include detailed prospecting along the trend to prove the continuity of the structure along strike from
the known gold occurrences, leading to stripping and drilling. As previously mentioned, the property is permitted for
drilling.
The identification of a +3km long gold anomalous trend extending from the historic Dead Otter Lake occurrence to a
grab sample recording 19.6g/t Au along the same geological trend is considered a significant ‘new discovery’. Whilst
the trend is discontinuous in a geochemical sense owing to the lack of exposure, further very encouraging gold and
pathfinder elements have been reported.
Figure 05 showing the Dead Otter Trend with the historic showing in the north-west extending for >3km to the
19.6g/t Au sample in the south-east.
The mineralised structure closely mimics the granite contact. The high-grade gold sample, (see Photo 01), in the
extreme southeast of the trend could be where one of potentially two subparallel arcuate trends intersects the
principal trend, see Figure 05.
14
Figure 06 the location of the ‘19 grammer’ on the Dead Otter Trend.
15
OnGold
The property is located contiguous to the North Hemlo claims as well as those of GT Resources and consists of 163
single cell mining claims, comprising 34.5km², refer to Figures 2 and 4.
The property is located roughly 21kms southeast from the town of Manitouwadge, Ontario and all mining claims are
in good standing through the 2023 field season.
Previous prospecting has identified eleven high priority targets on the property, predominantly base metals anomalies.
This Option agreement which has a zero cash component, see table below, significantly increases FCM's footprint in
a district that holds numerous high grade nickel copper sulphide discoveries.
Limited previous exploration has been focussed to investigate several discreet magnetic anomalies thought to be
associated with Ni-Cu-PGE mineralised mafic-ultramafic intrusions. Similar rock types comprise the Tyko, RJ,
Smoke Lake and the more recently discovered West Pickle massive sulphide discovery.
FCM, as part of the due diligence process, conducted a lake sediment sampling campaign in the winter of 2022/23 as
access is far easier in the winter months. The initial results from this campaign have reported gold grades of up to
103ppb, see Figure 07.
Figure 07 showing the OnGold claims relative to North Hemlo as well as the location of the lake sediment samples.
The program was led under the supervision of Bruce MacLachlan, the principal of Emerald Geological Services (EGS).
Bruce has been quoted as saying "To the best of our knowledge the 103ppb Au Lake sediment value is the highest lake
sediment value collected in the Hemlo Belt outside of the deposit area".
Whilst at a very early stage, these initial results are extremely encouraging and add to the potential for the prospectivity
of the property as the 103ppb Au Lake sediment sample result also now shows the gold potential of the area.
Terms of the deal:
The deal is structured so that FCM has an option to earn-in up to an 80% interest over the property. The payments for
the exercise of this option are 1,000,000 of FCM Shares to be issued by the 31st of October 2023 and a work
commitment of CAD$300,000 over a three-year term. At the end of the 'earn-in' it is expected a JV will be created.
Ordinary FCM
Shares
Annual Work Commitment
(CAD$)
16
By 31
st
October 2023 1,000,000 0.00
By 10
th
July 2024
$50,000
By 10
th
July 2026
$300,000 (aggregate)
The JV possess a dilution mechanism on the basis of non-contribution. Should Ongold not wish to contribute, or their
ownership falls below 10%, the remainder of their holding is automatically converted in to a 2% NSR. FCM has the
right to acquire 67% of the stated NSR for C$ 750,000 and a first right of refusal over the remaining NSR.
17
West Pickle Lake
Palladium One commenced drilling in July 2022 and continued throughout the field season into December. Results
reported to date confirm the presence of a previously undiscovered nickel copper sulphide zone extending west
from the Palladium One’s RJ Showing into the JV area on West Pickle Lake, see Figure 2, this figure also
highlights some of the better drill results received into 2023. For a more comprehensive list of significant drill
results, see the table below. The assay results include the high grade reported from hole TK-22-073
at 10.3% Nickel (Ni), 2.9% Copper (Cu) over 1.8 meters, see Figure 9.
Two holes TK22-072 and TK22-073, have reported significant nickel/copper sulphides, see table below of drill
hole intersections for full details of the programme for 2023.
Figure 08. Massive pentlandite-pyrrhotite-chalcopyrite sulphide intersection in hole TK-22-073 from 137.5 to 139.3
meters down hole (core is dry), wall rock is tonalite breccia.
Figure 09. Area map showing the location of the West Pickle Lake Discovery
Hole
From
(m)
To
(m)
Width
(m)
Ni %
Cu
%
Co
%
TPM g/t
(Pd+Pt+Au)
Pd
g/t
Pt
g/t
Au
g/t
TK22-
058
214.1
214.6
0.5
0.04
0.02
0.00
0.00
0.00
0.00
0.00
TK22-
059
184.0
187.7
3.7
2.33
1.85
0.06
0.45
0.21
0.21
0.03
185.3
187.7
2.4
3.49
2.73
0.09
0.64
0.30
0.30
0.04
185.3
187.0
1.8
4.79
3.67
0.12
0.87
0.41
0.41
0.05
185.3
185.9
0.6
8.21
1.60
0.24
1.62
0.80
0.79
0.03
TK22-
060
183.7
196.3
12.6
0.72
0.34
0.02
0.14
0.06
0.06
0.02
184.3
189.0
4.7
1.77
0.63
0.03
0.27
0.12
0.12
0.03
186.6
189.0
2.4
3.18
0.99
0.06
0.39
0.18
0.19
0.02
188.0
188.5
0.5
7.60
1.25
0.12
0.41
0.18
0.20
0.03
TK22-
061
188.7
190.8
2.1
0.75
0.43
0.01
0.28
0.14
0.11
0.03
190.2
190.8
0.6
1.62
0.67
0.03
0.47
0.25
0.20
0.02
TK22-
062
202.0
213.5
11.5
0.06
0.08
0.00
0.04
0.01
0.01
0.01
203.6
204.4
0.8
0.16
0.35
0.01
0.14
0.05
0.07
0.02
TK22-
063
149.0
152.0
3.0
0.07
0.24
0.00
0.13
0.04
0.05
0.05
149.5
150.5
1.0
0.15
0.54
0.00
0.32
0.09
0.12
0.11
TK22-
064
219.8
245.5
25.8
0.04
0.02
0.00
0.01
0.00
0.00
0.00
219.8
220.3
0.5
0.65
0.27
0.03
0.21
0.10
0.11
0.01
TK22-
065
224.3
246.0
21.7
0.04
0.02
0.00
0.01
0.00
0.00
0.00
240.8
246.0
5.2
0.10
0.05
0.00
0.02
0.01
0.01
0.00
240.8
241.2
0.4
0.40
0.18
0.01
0.06
0.04
0.02
0.00
TK22-
066
150.3
178.5
28.2
0.06
0.02
0.00
0.01
0.00
0.00
0.00
158.9
162.9
4.0
0.19
0.07
0.01
0.02
0.01
0.01
0.00
161.2
162.9
1.7
0.35
0.12
0.01
0.04
0.02
0.01
0.00
TK22-
067
200.2
200.7
0.5
0.06
0.01
0.00
0.00
0.00
0.00
0.00
TK22-
068
134.3
139.5
5.3
0.11
0.08
0.01
0.03
0.01
0.01
0.00
135.3
135.8
0.5
0.25
0.25
0.01
0.08
0.04
0.03
0.01
Hole
From
(m)
To
(m)
Width
(m)
Ni %
Cu
%
Co
%
TPM g/t
(Pd+Pt+Au)
Pd
g/t
Pt
g/t
Au
g/t
TK22-
069
No Significant Assays
TK22-
070
164.6
174.7
10.1
2.47
0.99
0.04
0.27
0.14
0.10
0.02
164.6
168.4
3.8
6.42
2.40
0.09
0.64
0.35
0.25
0.04
165.4
167.6
2.3
10.41
3.40
0.14
0.92
0.53
0.34
0.04
165.4
167.1
1.7
12.58
2.49
0.17
0.94
0.60
0.30
0.04
165.4
166.3
0.9
12.90
2.70
0.16
1.05
0.67
0.34
0.04
TK22-
071
151.7
156.9
5.2
0.72
1.07
0.01
0.28
0.10
0.10
0.08
155.7
156.9
1.2
2.00
2.51
0.04
0.21
0.06
0.13
0.02
155.7
156.2
0.6
4.10
3.81
0.06
0.27
0.09
0.16
0.03
TK22-
072
149.0
153.1
4.1
2.05
0.89
0.04
0.36
0.11
0.22
0.03
150.4
153.1
2.7
3.08
1.18
0.07
0.45
0.14
0.29
0.02
151.7
153.1
1.5
5.33
1.48
0.12
0.67
0.17
0.48
0.02
151.7
152.3
0.7
7.39
2.22
0.16
0.95
0.24
0.69
0.03
TK22-
073
137.5
140.1
2.6
7.19
2.01
0.10
0.56
0.32
0.20
0.05
137.5
139.3
1.8
10.32
2.88
0.15
0.80
0.46
0.27
0.07
138.5
139.3
0.8
11.90
0.98
0.16
0.64
0.33
0.26
0.05
Table showing Assay Results and drill results from the West Pickle Zone.
Note:
(1) Reported widths are "drilled widths" not true widths.
(2) Italicised grey shaded values are previously reported, see previous news releases.
20
Drilling at West Pickle Lake by GT Resources has demonstrated that the high-grade nickel-copper sulphide
occurrence hold potential to be extended both east towards their RJ showing as well as west onto or close to the
100% owned FCM North Hemlo property. This area will also be a focus for reconnaissance in a future field season
as well as follow up of the lake sediment samples and grab samples.
Furthermore, interpretation of the VTEM data by GT Resources infers there is potential for further discoveries,
specifically to the west of WPL, in the area of TK22-076 which was drilled just off the 100% owned FCM North
Hemlo Property boundary which intercepted 46.3m of ‘anomalous nickel mineralisation’ in an east west trending
structure, see Figure 10
Figure 10: Plan and long section looking north perpendicular to the interpreted chonolith structure linking the West
Pickle and RJ zones, showing potential for massive sulphide mineralization beyond the depth detectable by the 2021
VTEM airborne survey.
GT Resources (Palladium One) whilst continuing the exploration / drilling of the West Pickle Lake project areas
produced a NI43-101, as required under the JV terms.
21
Zigzag
The project is less than 100km from Armstrong in northwest Ontario in the Seymour Lake area, a district already
proven to be prospective for hard rock, pegmatite hosted lithium. Existing infrastructure currently in place in the
local area is expected to be further bolstered in the future by the planned Jackfish Hydro project and a Spodumene
Process Plant at the Green Technology Metals, Seymour site which is just over 10km away.
Figure 11 showing the regional setting of the Zigzag claim block.
The six-unit claim group spans approximately 1.2km² and includes a mapped structure of 800m which
(Tebishogeshik occurrence) is wholly contained within the claim block, the lithium-tantalum mineralization is
pegmatite-hosted with significant rubidium and caesium mineralisation also reported. All of which are 'critical
minerals' as identified by the Canadian and United Kingdom Governments.
Previous workers of the Tebishogeshik occurrence have identified Li2O and Ta2O5 mineralization along the
entire length of the showing from sampling at surface, grading up to 1.68% Li2O over 7.9m and 0.168%
Ta2O5 over 2.54m in separate channels samples. Several shallow historic drill holes along the occurrence have
returned significant intersections, including, (in separate drill holes) an intersection grading 1.08% Li2O over
6.1m and a separate intersection of 399.8ppm Ta2O5 over 2.92m. Both intersections were less than 20m down
hole. The structure is open along strike and to depth and remains to be fully evaluated.
The claims were optioned from Nuinsco in March 2023. Nuinsco, whilst not the registered owners, hold an Option
to Purchase agreement with the claim owner. FCM has entered into a four-year work programme as well as staged
payments to Nuinsco, which can be accelerated. At the fulfilment of these obligations, FCM will own the claim
option on an 80:20 arrangement with Nuinsco. At this point a JV would be entered into between FCM and Nuinsco
for the further development of the mining claims. Should either party not wish to contribute to the JV they would
be diluted as per an agreed dilution formula. If either Nuinsco or FCM is diluted to 10% ownership their entire
remaining ownership would be automatically converted into an NSR.
22
Terms of the deal:
The deal is structured so that FCM has an option to earn-in up to an 80% interest over the exclusive option held
by Nuinsco Resources over the Zigzag mining claims. The payments for the exercise of this option include a cash
component of CAD$500,000 and a share component of CAD$250,000 in FCM Ordinary Shares spread across
approximately 3.5 years. Additionally, FCM has committed to undertake exploration related expenses on the
property over the same period to a value of CAD$550,000.
Table
Zigzag Option Schedule
Cash (CAD$) Ordinary FCM
Shares (CAD$)
Annual Work
Commitment
(CAD$)
On Signing 50,000 25,000 0.00
June 01, 2023 75,000 30,000 50,000
June 01, 2024 100,000 50,000 100,000
June 01, 2025 125,000 60,000 150,000
June 01, 2026 150,000 85,000 250,000
Total 500,000 250,000 550,000
These payments and work commitments may be accelerated at FCM's option. Upon completion, the Zigzag
mining claims will be owned by FCM and Nuinsco on an 80:20 basis and the parties will be deemed to enter a
joint venture for the development of these mining claims. Should either party not wish to contribute to this joint
venture a standard industry dilution clause shall apply. If either party dilutes to a 10% ownership interest or lower,
their entire interest will automatically convert into a NSR royalty payment, and the other party shall be the 100%
owner of the Zigzag mining claims. Additionally, half of such NSR royalty payment may be purchased by the
other party by paying a sum of CAD$ 750,000.
Prospecting of the Zigzag property commenced early in the 2023 field season in association with reconnaissance
for access to the claim area. Initial prospecting returned very encouraging results which validated and enhanced
the historic reported assays, see table below.
Sample
Number
Lithium (Li)
%
Tantalum
(Ta) ppm
Niobium
(Nb)
ppm
Rubidium (Rb)
ppm
A1104880 1.39 184 104
884
A1104881 0.51 85 48
2770
A1104882 1.0 139 81
855
A1104883 0.012 198 88
3750
Sample-1
0.07
346
72
1140
Sample-2
0.41
219
79
1130
Sample-3
0.196
79
54
361
F006543
1.7
75
41
820
F006544
1.63
235
90
1200
F006545
1.65
115
60
1190
Table of the sample results from first pass prospecting. Note these are 'non-systematic samples collected during
access appraisal. (Values rounded for clarity).
23
As follow up to this initial systematic sampling programme the team undertook furthermore systematic sampling
in parallel with preparing for and undertaking a sawn channels sampling programme across the prospective
outcrop. Note as an Early Exploration Agreement was not then in place no stripping to enlarge outcrop exposure
was permitted.
The sawn channel sampling programme was along a ~150m strike at intervals across the exposed pegmatite
outcrop.
Final results of the significant assays from the initial thirty-nine samples are detailed in the table below
Sample No. Caesium
(Cs) ppm
Gallium
(Ga)
ppm
Lithium
(Li)_ppm
Rubidium
(Rb) ppm
Tantalum
(Ta) ppm
F006543 92.6 107 17000 820 75.2
F006544 109 105 16300 1200 235
F006545 128 101 16500 1190 115
F006547 48.3 92.2 11500 695 162
F006548 100 87 12300 1110 50.3
F006549 77 118 21200 302 80.6
F006550 128 69.9 13200 795 90.9
F006572 146 81.6 12600 1630 84.3
F006573 85 112 17800 536 179
F006574 102 152 29700 404 57.3
F006575 256 133 469 3810 136
F006576 81.7 124 22300 514 467
F006579 96.8 95.9 236 1390 104
F006580 70 113 18500 650 145
F006581 82.3 99 10900 2000 51.3
F006582 19.4 87.1 16200 277 79.6
F006583 36.5 108 20100 255 235
F006584 89.6 100 8250 1510 5220
F006585 54.3 84 13200 938 67.4
F006586 44.5 117 18300 846 724
F006592 66.9 153 27500 587 54.3
F006593 65 77.4 7240 736 246
F006594 46.4 60.8 5820 748 69.3
F006596 34.5 78 10200 458 126
Table of the higher Li2O, results reported. All samples are of pegmatite with varying amounts of visible
spodumene.
The grab samples identified a strike of over 350m with >1% Li2O and remains open in both directions.
Furthermore, there were, (some in coincident samples) 6 samples >250ppm tantalum (Ta). Nine samples reported
>1000ppm rubidium (Rb) with the highest reported valuer being 3800ppm Rb. Several samples were also
anomalous in caesium (Cs). See table of the more significant values. Note some samples were of iron formations
not pegmatite and are not included.
Nine sawn channels were cut with lengths of under 5m to over 10m, channel lengths were usually controlled by
overburden and not by diminished outcrop. A total of 80 samples were submitted to the laboratory for analysis,
24
these included, where exposed not only the pegmatite but one, one metre sample in the host rock, which is in
general mafic volcanics to the north and granitic rocks to the south.
The samples can therefore be easily segregated into four broad categories: mafic, pegmatitic, granitic pegmatites
and granite.
Figure 12 showing the location of the channels relative to the 'core 400m' zone.
The results from the channels are very encouraging. It must be stressed that only hand stripping of vegetation was
undertaken and often, exemplified by channels 5 and 7, the outcrop persisted but the vegetation cover was too
onerous to be removed by hand. Accordingly, it is felt that with mechanical stripping many of these channels
could be extended. Additionally, it is also likely that 'gaps' in the outcrop continuity might also be exposed as
being pegmatite when exposed with mechanical stripping. The current permit allows both stripping and drilling.
The results have not only vindicated the grab samples in respect to the lithium oxide content but also highlighted
again the presence of other important, critical minerals such as tantalum, gallium, and rubidium, see table below
for highlights of the reported assays.
Channel
Length
(metres)
Lithium
(Li20%)
Tantalum (Ta205)
ppm
Gallium (Ga)
ppm
Rubidium (Rb20)
ppm
3
2.4
0.81
170
80
2000
Includes
1.00
1.31
170
90
2920
3
3.1
1.52
60
90
1820
Includes
0.9
2.54
100
110
2550
and
0.5
2.05
40
100
950
4
1.8
1.85
220
90
1740
5
2.2
0.96
130
90
1280
Includes
0.8
1.39
100
100
940
6
2.00
1.96
160
110
1170
7
5.5
2.35
150
120
1740
Includes
2.5
3.43
170
140
1270
8
1.8
1.03
110
80
2070
Includes
0.5
1.43
90
90
1050
9
1.9
1.15
290
80
1400
Includes
0.6
2.19
500
80
1010
9
3.7
1.14
150
100
1290
Includes
1.9
1.41
160
100
1710
Table showing the significant assays from the sawn channel samples from the Zigzag property
26
Figure 13 showing the extent of outcrop exposed by hand stripping. Also note the change in rock type from mafic
volcanics (closest) to granitic pegmatite.
Prior to the drill programme in December 2023 a further prospecting campaign was undertaken. This was
dominated by soil sampling, the sample lines focussed on the open eastern and western extent of the ‘core area’
as well as a postulated subparallel structure or splay to the south of the main structure.
Figure 14 showing the main zone at Zigzag with locations of channels and drill holes, as well as the MMI soil
sampling lines.
27
The results of the MMI soil sampling assays gives support that the main structure continues along strike from the
known (sampled) outcrop.
A significant silver anomaly was identified over the two eastern most MMI lines off the main zone. This also
requires further investigation.
Furthermore, there is strong geochemical support for a sub parallel trend about 200m to the south of the main
zone. Additional work is needed to expand and confirm the anomalism identified. As well follow up sampling is
required to confirm the presence of a possible third trend currently identified in anomalous rare element results in
grab samples.
Drilling
The drilling targeted the 400m central section of the property which had been subject to a non-mechanised
stripping and channel sampling programme reporting up to 2.36% lithium (Li2O) over 5.5m, see figure 15.
Figure 15 Drilling covered the area of channel sampling and 'grabs' on roughly 50 m centres (note historic grid
lines are on 200ft (60m) centres).
Historic drill holes also reported an intersection grading 1.08% Li2O over 6.1m from 12.45m and a separate
intersection of 399.8ppm Ta2O 5 over 2.92m from 15.50m. The results from the maiden drill programme by FCM
were most encouraging and the significant intersections appear in the table below
28
Drill Hole Metal Depth
From
Width Grade
ZIG-23-01 Li₂O 12.7m 4.3m 1.65%
incl. 1.0m 2.93%
Rb₂O 11.7m 5.3m 0.21%
ZIG-23-02 Li₂O 15.0m 5.0m 1.5%
incl. 0.2m 5.19%
Rb₂O 14.25m 5.75m 0.21%
incl. 0.3m 0.54%
Cs 14.25m 3.25m 132 ppm
incl. 0.25m 430 ppm
Ta 14.0m 6.8m 90 ppm
incl. 0.2m 235 ppm
Ga 15.5m 0.2m 144 ppm
ZIG-23-03 Li₂O 14.7m 0.75m 2.1%
Rb₂O 12.6m 2.1m 0.16%
Cs 12.0m 5.0m 151 ppm
incl. 0.45m 480 ppm
Ta 12.6m 3.9m 164 ppm
incl. 0.45m 624 ppm
Ga 21.9m 0.25m 127 ppm
and
ZIG-23-03 Li₂O 28.4m 1.6m 0.46%
Rb₂O 27.8m 2.2m 0.17%
ZIG-23-04 Li₂O 20.0m 1.6m 0.79%
Rb₂O 20.0m 1.6m 0.21%
Ta 15.3m 7.8m 165 ppm
incl. 1.0m 347 ppm
ZIG-23-05 Li₂O 7.6m 6.0m 1.13%
incl. 1.0m 2.17%
Rb₂O 5.7m 3.8m 0.16%
Ta 4.8m 9.9m 167 ppm
incl. 0.4m 401 ppm
ZIG-23-06 Li₂O 28.8m 2.2m 1.09%
incl. 0.3m 2.26%
29
Rb₂O 28.8m 2.2m 0.19%
ZIG-23-07 Li₂O 9.9m 6.5m 1.09%
incl. 0.5m 2.76%
Rb₂O 10.4m 6.6m 0.21%
incl. 1.0m 0.41%
Cs 13.0m 4.0m 126 ppm
Ta 9.0m 7.4m 131 ppm
incl. 0.6m 177 ppm
ZIG-23-08 Li₂O 65.5m 3.0m 1.28%
Rb₂O 65.5m 3.4m 0.11%
Ga 65.5m 3.0m 98 ppm
incl 1.0m 114 ppm
ZIG-23-09 Li₂O 47.25m 4.75m 0.52%
incl. 0.8m 1.06%
Rb₂O 47.25m 4.75m 0.14%
Table assays from the (nine) hole drill programme at Zigzag, every hole had reportable intersections of Li₂O with
significant 'credits' from the accessory critical elements / metals, specifically rubidium oxide, Rb₂O.
30
The presence of abundant spodumene in the core, see figure 16 below, is reflected in the assays.
Figure 16-Shallow intersection of pegmatite hosting spodumene (pale green 'blades' in hole ZIG-23-01).
Two (shallow) step-back holes were conducted as well as a scissor hole to confirm the dip of the structure. Further
drilling is warranted both along the (open) strike to the west and east as well as down dip.
However, drilling will be preceded by a mechanical stripping programme to identify further outcrops inferred by
the anomalous MMI results as well as to improve outcrop continuity in the main zone.
31
Sunbeam
The Sunbeam Gold Property includes the historic Sunbeam Mine. This was a high-grade underground gold mine
which operated from 1898 to 1905. The property now comprises three claim blocks, all in the name of FCMC.
The core of the Property consists of 104 unpatented mining claims covering 20.2km² with the ‘English option
claims encircling and the newly staked claims contiguous to the northeast, totalling over 70km².
In 2023, FCMC staked a further 119 claims, covering 25km² and contiguous to the northeast of the English option
area. see Figure 17. The newly staked claims remain in good standing for two years before requiring assessment
credits derived from field work. Additionally, as they are contiguous to the 'English option' assessment credits can
be spread across the new claims.
The Option to purchase was signed with Nuinsco in October 2022. Nuinsco held the claims through an underlying
agreement with several prospectors who originally held the claims. In February 2023, FCM made a second
payment to Nuinsco, and the ‘core’ claim ownership was transferred to FCMC. The Sunbeam extended (English
Option extending over 24.8km²) was part of an Option agreement with Nuinsco and the claim owner, which
FCMC has now paid out in full.
Figure 17 showing the Sunbeam Property including the Sunbeam extended ‘English option’ and the new claims.
Both the Option areas are covered by an Exploration Permit, granted in June. Furthermore, the area is also under
two distinct, though similar, MoU’s with the two prominent First Nations in the area who have traditional land
claims which include the Sunbeam Property.
Following on from the detailed historical review of all available data, from the time historical production
commenced in the early 1900's, through to the last drilling campaign as well as geophysical data, FCM initiated
a focussed exploration across the property.
32
In parallel to the exploration and in line with our key ESG objectives and respect for the local First Nation Peoples
who have an interest in the area a Stage 1, Archaeological Heritage Review (AHR) was conducted and submitted
to the provincial authorities in 2023. The review was undertaken by White Spruce Archaeology Inc., who were
nominated by the FN group requesting the Survey. The AHR focussed on identifying any historical areas of First
Nation interest, but other than water courses and lakes none were identified.
The Sunbeam property is dominated by three mineralised structures each identified over 10km traversing the
property; these are inferred to continue to the northeast into the new area where prospective structural features are
inferred all three-host significant gold anomalism as well as historic development, including the Sunbeam high
grade gold mine which operated until 1905 and reportedly produced multi ounce material, see figure 18
Figure 18 showing the three district, sub parallel structure transecting the enlarged Sunbeam Property, note the
significant number of anomalous gold ‘showings’ as well as historic development on each structure.
During 2023 an initial stripping and channel sampling programme at the historic production sites of Pettigrew and
Roy has been completed. The results from Roy indicate a semi continuous zone across strike of multi-gramme
material. However, further stripping and sampling was considered necessary, and a second stripping programme
was completed in late 2023 in order to better define the potential drill targets.
33
The two stripping campaigns were successful in not only identifying gold bearing structures but also enhancing
the understanding of the geology of the mineralisation. At Roy, most of the samples were 1m or less, with a
minimum of 0.1m and a maximum of 1.4 m. The results have defined a broad zone of shearing, alteration, and
mineralization, peaking at 18.8 g/t (ppm) Au in one 0.3m channel sample (within interval of 6.2 ppm Au / 1.05
m). There are a significant number of other results exceeding 1ppm Au that define the anomalous structure over
a strike of 100m between the existing shafts and open along strike.
The high-grade gold mineralisation is hosted in quartz veining in sheared 'mafics' within a sheared, folded felsic
to intermediate porphyry which often exhibits quartz veining, silicification and ankerite alteration, and which also
frequently contains anomalous gold, see Figure 19.
Figure 19 showing one of the 'quartz blowouts' at Roy in the new area stripped.
A similar situation exists at Pettigrew, where historical drilling was encouraging, with two holes returning
significant gold assays including: Hole 57751: 19.4 g/t Au over 0.63m at 5.33m
Highlights from the assays from the second round of stripping include:
At Roy results have confirmed high grade gold assays up to 18.8 g/t gold (Au) / 0.3m channel sample
Other highlights include:
6.27 g/t Au channel / 0.35m in mafic schist with quartz veinlets;
4.98 g/t Au channel / 0.5m in sheared porphyry; and
5.58g/t Au channel / 0.5m within a quartz vein.
At Pettigrew channel and grab samples returned significant gold grades, including:
13.0 g/t Au grab sample from quartz rubble dug up beside the stripped outcrop.
3.5 g/t Au channel / 0.2m in a quartz vein with galena and chalcopyrite;
1.82 g/t Au channel / 0.75m in sheared porphyry; and
0.32 g/t Au channels / 3.95 m within sheared porphyry.
34
Figure 20, showing a close up with 'VG' (visible gold), in one of the channels at Roy.
.
Significantly the host porphyry reported up to 5ppm. As a result, it is recommend that the historic core is reviewed
in order to quantify the amount of porphyry and if deemed necessary sampled.
Since the announcement of the Sunbeam acquisition in early October 2022, we have been working to advance the
project to drill ready status.
Granting of an updated Exploration Permit was achieved in June 2023 and one aspect was the increased areas
available for stripping, particularly in the vicinities of the three historical development areas.
The stripping undertaken in 2023 has not only increased the potential of the Property but advanced the Roy and
Pettigrew zones to a point whereby drill holes could be located.
35
Esa
The Esa property contains 86 claims, covers 20.6km², and is located approximately 11km northeast from the
Barrick Hemlo gold mine, immediately south of FCM’s North Hemlo property. Esa was one of the ‘seed’
properties that formed the pre-IPO package.
Geologically, the property sits between the Cedar Lake Pluton and the Musher Lake Pluton, such intrusions are
considered important components for driving mineral-rich fluids and economic mineralisation is often associated
with the contacts or structures associated with the intrusive event.
A prominent geophysical / geological feature transects the claim block. This structure adds significant merit to
the block’s potential, as its continuation outside the Esa boundary is associated with gold occurrences, see Figure
21.
Figure 21 the Esa block with geophysics overlay and district geology as well as anomalous Au sample results.
This structure is considered one of three subparallel, arcuate trends contained in the Hemlo ‘north limb’, which
mirror the Hemlo trend to the south, (see Figure 02). There are also a number of N-S and NW-SE structures, these
too are often associated with mineralisation. Re-interpretation of geophysical data further verified the structure’s
presence enhancing the property’s prospectivity. Extensive exploration was conducted along this feature in 2022
with over 500 soil samples being collected predominantly along eleven lines on average 400m apart, orthogonal
to the inferred 4km shear. Prospecting also identified sheared metasedimentary / mafic volcanic boulders
anomalous in trace elements in the area interpreted to contain the Hemlo style shear zone. Ground reconnaissance
identified ‘Hemlo-look-alike rock’ in the form of an angular boulder which returned anomalous gold value of
0.7ppm Au, see Figure 21
36
Figure 22 the Esa block showing the inferred shear with the 2022 / 2023 soil lines as well as the location
of the 0.7ppm Au boulder sample.
The results of the initial soil sampling defined a geochemically anomalous zone mimicking the inferred position
of the shear. Assay results were sufficiently encouraging for further sampling in the 2023 field season when 'infill'
sampling lines were conducted in two programmes again totalling over 500 samples. The assay results for the last
programme further validate the presence of a geochemically anomalous structure displaying elevated gold and
pathfinder element such as arsenic molybdenum and antimony, see Figure 22.
37
Future work is intended follow up on the shear zone and other structures identified, as well as to include trenching
/ stripping in the ‘boulder’ location.
The property is covered by a valid Exploration Permit, (granted in October 2023) and is required for ‘invasive’
exploration such as trenching, stripping, and drilling.
38
McKellar
The McKellar property, comprised 66 claims, covers 12.5km². In February 2023 FCMC staked a further eight (8)
claims, each of 400ha contiguous in the south of the McKellar block. McKellar was the second largest of the claim
blocks that formed the Power Metals claim acquisition.
McKellar is situated in prime geological terrain within the Coldwell complex. Located to the west of Generation
Mining’s Palladium Project and is roughly 25 kilometres by Highway 17 from the town of Marathon, the main
service centre for Barrick’s Hemlo mine. McKellar has a number of historic ‘showings’ with significant values in
precious and base metals as well as Rare Earth Elements (‘REE’), see Figure 23.
Figure 23 Shows the McKellar claim block (pre-2023) in a district scale geological setting with historic
showings, including the McKellar trend which contains contemporary and historically significant zinc
grades as well as high grade silver.
Historic showings include:
Alvey occurrence: 4 historic drill holes in the vicinity but no assays available, however separate grab samples
returned 0.28 g/t Au, 37.98 g/t Ag & 146 g/t Cu. See figure 1.
Goldbar Lake prospect: Drill Hole P-2: 19.20-19.66m: 1.09% Copper (Cu) & 6.54% Zn and 20.88-21.98m: 0.56
g/t Gold (Au), 60.1 g/t Silver (Ag), 4.73% Cu & 0.98% Zn.
The Little Pic (silver) 'mine' (McKellar trend): discovered in 1875, almost 100 years later Noranda reported a
channel sample of 618.0 g/t Ag and a trench sample of 1.1m @ 32.3% Zn & 7.1% Pb, with VMS style
mineralisation reportedly traced over a 600m strike 'McKellar Trend'.
Several diatremes, anomalous in REE have been discovered in the area, included is the McKellar diatreme the
historic samples reported were highly anomalous.
During the 2022 field season, over 100 grab (rock chip) samples were collected as well as six lake sediment
samples. Mapping and sampling work predominantly took place on the McKellar trend and nearby Alvey
occurrences, see Figure 24, as well as initial work on the REE diatreme in the southern sector.
39
Figure 24 showing the McKellar trend which contains contemporary and historically significant zinc grades as well as high
grade silver and FCM samples reporting over 4% Zn and over 2oz / tonne Ag as well as anomalous Pb.
The reported results from the 2022 season’s campaign are encouraging (sample B416205 see figure 25) and
confirm that more work is required to further extend and detail the potential of this trend. For example, 400 meters
along strike to west-northwest, similar rock returned 1.36% Zn, 635 ppm Pb, 11.6 ppm Ag, and 550 meters along
strike to west-northwest of the shaft, mafic volcanics returned 590 ppm Zn. Furthermore, the ‘Alvey trend’, which
is in close proximity reported anomalous: 382 ppm & 417 ppm Zn.
Figure 25 sample B416205 which reported 4.82% Zn, 0.22% Pb, 80ppm Ag.
40
The geological work at McKellar, to date and supported by the historical review, indicates that zinc mineralization
occurs close to a volcanic-sedimentary (sheared) contact.
The work by FCM has shown that the potential of the McKellar trend is valid. Furthermore, it is not ‘closed off’
and therefore the possibility exists to extend the known mineralisation to the northwest.
A future field campaign will not only seek to extend the McKellar base metal trend but also explore the other
showings including Goldbar Lake.
Results from limited initial samples collected by FCM from the diatreme in 2022 were anomalous, being five
times crustal levels in a number of the REE samples assayed. The potential for higher values is considered realistic,
in line with historical values as the available sample sites were not optimal and the original sample sites could not
be identified.
Field work in 2023 was confined to further channel sampling of the McKellar diatreme which occupies a
topographic low and occurs within a north trending linear structure. The breccia may have been emplaced within
a shear or fault zone, however, geologic data supporting this possibility are lacking.
In total 18 sawn channel samples of approximately 1m were collected across the exposed diatreme, in addition 5
grab samples were also collect for assay.
In 2023 further prospecting, (5 bedrock grab samples) geological mapping as well as 18 sawn channel samples
(see figure 25) of approximately 1m were collected across the exposed diatreme, results of which and other
historical assays are included in the following table, showing the highest two samples from FCM’s recent
sampling.
Element
Historical assay
results for selected
elements (including
REE’s), McKellar
Creek Diatreme:
FCM recent
sampling
showing two
highest values,
all ppm
Gold Au 25 ppb
N/A
Platinum Pt 17 ppb
N/A
Neodymium Nd 300 ppm
259, 205
Lanthanum La 400 ppm
362, 253
Beryllium Be 2.8 ppm
5 all others
BLD
Cerium Ce 513 ppm
653, 503
Yttrium Y 214 ppm
287, 193
Strontium Sr 1280 ppm
1410, 1360
Thorium Th 180 ppm
145, 140
U308 38 ppm
U: 32.8 23.4
Table showing the results of the reported historical and recent sampling by FCM.
41
Figure 26 showing channel sample sawn into the diatreme outcrop and in the process of being sampled.
Further work on the diatreme will include additional channel sampling and once an exploration permit is granted,
possible stripping if ground access allows.
Whilst only limited field work was conducted in 2023, this and the 2022 work generated assessment credits that
cover the property into 2024.
An exploration permit, required for ‘invasive’ exploration such as trenching, stripping, and drilling was submitted
(with support of the relevant First Nations), to the provincial mining department in 2023 and granted for a three-
year period until November 2026.
42
Enable
This property comprising 41 claims covers around 8.7km² it is located to the north of the town of Terrace Bay,
which is on Interstate 17.
Significantly the property includes an important geological feature of interest: the contact between the Terrace
Bay batholith (to the southeast) and the mafic volcanics and iron formation. These have been intruded by quartz-
feldspar porphyry dykes, an important mechanism for mineralisation. The contact transects the Enable property
from the northeast to southwest corners of the claim block and its inferred strike extent is underexplored within
the property, see Figure 27.
Figure 27 showing the Enable claim block with Ontario Mineral Inventory (‘OMI’) showings along the geological
contact.
There are numerous showings located in the surrounding claims, with 30+ gold occurrences in the district being
associated with this contact.
Less than 2 kilometres off property along this contact are the historic samples of the Acker G Vein (believed to
be located at the Hays Lake showing with 9.64g/t Au and 20g/t Ag) in a 3-metre-wide shear zone which trends
northeast and may extend onto the Enable property. Also, to the southwest is the 'Joa Walton' occurrence with
192.7g/t Au and 401g/t Ag. Again, this important trend when extrapolated across the property contains the historic
Perch Lake West showing with a reported 1.85g/t rock chip sample.
These known gold occurrences, as well as the presence of historical gold on the property, are substantive evidence
to support the inferred continuation of the mineralised geological structure/ contact through the Enable claim
block. This provides very positive encouragement for the potential for further significant gold assays in the future.
The mineralised contact between the mafic rocks and the Terrace Bay batholith is the main vector of interest and
this contact dissects the property.
Over two field visits to the property in 2022, reconnaissance identified several quartz veins and over 80 rock
43
samples were collected. The assays received have not only confirmed and enhanced the West Perch Lake showing
but identified a new area of quartz veining containing gold values in excess of 7ppm, see Figure 28 and the Table
which follows.
Figure 28 quartz vein from Sample 697925, assaying 7.02ppm Au, with minor pyrite and galena in sheared,
silicified granodiorite containing 1-2% disseminated pyrite.
Of the samples collected, almost half contain anomalous (>0.1ppm) gold values, with over 10 samples containing
>0.3ppm Au. Several samples returned anomalous to significant silver values. The higher silver values are
associated with the elevated gold assays. For example, Sample 697926 contained 83ppm Ag, and in a separate
sample 5.2ppm Au also reported 57ppm Ag.
Sample
no
Au
PPB
Ag
PPM
As
PPM
Co
PPM
Cu
PPM
Li
PPM
Mo
PPM
Pb
PPM
Zn
PPM
E5830178
5250
56.9 1.5 7 27 8 2 1970 1120
E5830177
2040
16.2 26 47 294 39 0.5 22 133
E5830176
2040
15 6 23 13 7 24 12 38
697930 370 2.9 3 3 5 2 3 1.5 16
697927 463 3.1 4 9 35 13 0.5 39 72
697926 859 4.6 1.5 14 214 23 0.5 27 90
697925 7040
83.4 1.5 4 36 6 2 2840 1350
697924 1260
9.4 1.5 10 87 13 0.5 211 48
697923 672 3.6 1.5 2 4 2 1 140 9
697922 1700
16.4 1.5 2 9 3 1 360 139
697913 161 4.4 1.5 4 16 5 77 22 25
697912 158 6 1.5 7 16 5 3 41 29
697911 202 10.9 1.5 8 50 4 14 140 24
697901 122 0.4 1.5 28 128 12 0.5 1.5 151
697873 486 1.2 1.5 13 62 17 0.5 5 35
697856 473 9.5 1.5 10 41 6 12 132 30
697855 336 2.8 1.5 4 13 4 30 102 25
The table shows a selection of the higher gold reporting samples with other associated elements, note Au is reported in ppb and the higher silver
values are associated with high gold values.
45
FCM undertook a Winter 2022/23 exploration campaign with 6 lake sediment samples collected, results were not
significant.
Several soil lines and were completed for 88 samples a well as limited prospecting, with 20 grab rock samples in
the areas of the historic and new discoveries.
Results did not identify any new ‘showings’ and whilst the soil samples were anomalous no clear trend was
identified. Future work will involve further, detailed prospecting in the vicinity of the 7ppm Au sample, along the
inferred contact as well as possibly extending the soil lines east and west.
Figure 29 showing the project scale detail of the historic (Perch Lake West is where the FCM 2.04ppm samples
are located) and new sample points including the 7.02ppm Au / 83ppm Ag as well as the locations of lake sediment
samples and the soil lines completed.
Assessment credits from 2022 field work extended into 2023 and with the work undertaken in 2023 the property
is in good standing into 2024.
An exploration permit, required for “invasive” exploration such as trenching, stripping, and drilling was submitted
in 2023 to the Provincial authorities, with the support of the two relevant First Nation groups and was granted in
November 2023, valid for three years.
46
Coco East
The Coco East block of 30 claims covering ~6.3km² is located on the eastern sector of the Big Duck Lake
Porphyry, this claim block was part of the Power Metals acquisition pre-IPO. Big Duck Lake Porphyry contains
several historic showings as well as the Coco Estelle deposit. This porphyry, as well as other similar intrusions,
are strongly spatially associated with Archean lode gold deposits.
There is only one showing located within the Coco East property boundary, the Big Birch Occurrence. Two pits
are reported with a 5m spacing, striking east-west. The main pit exposes a 10cm-wide quartz and calcite vein and
contains pyrite and possible chalcopyrite mineralisation, and historic assay results have returned values of 0.56
g/t Au and 2.83 g/t Ag.
Figure 30 showing the regional setting of the Coco East claim block with OMI showings.
No field work was conducted during the season in 2023 but over the winter of 2022/23 six lake sediment samples
were collected, see Figure 30.
The assessment credits accrued from 2022 field work extend into 2024.
Background
During the 2022 field season, FCM collected 47 rock samples predominantly in the area of the Big Birch
Occurrence and historical drilling. Assays returned gold and silver grades that were generally in order of the
historic samples, see Figure 31.
47
Figure 31 showing the prospective areas of Coco East and the areas of work undertaken by FCM, note the geophysical
anomaly in the northwest of the block.
Future work will focus on an exploration programme to cover other areas of the block, particularly the geophysical
anomaly to the north of the property, which is interpreted as a potential continuation of the structure hosting Coco
Estelle.
48
Magical
Located only 9km northwest of the Barrick Hemlo gold mine, these 14 claims which are 2.9km² and are also
situated on a compelling geological contact which potentially represents a district scale geological contact, which
could be an extension of one of the inferred North Limb shears, (see Figure 02).The enigmatic ‘Valley Float’ less
than 1km off the property boundary to the northeast has reported >16g/t Au, whilst the Gowan Lake showing to
the southwest, also on the inferred contact, reports ~1.5g/t Au and the Kusins showing also associated with the
contact reports 70.1 g/t Ag, 10.7% Zn and 8.9% Pb, see Figure 32.
While only a small land package, Magical’s geological location gives weight to its potential. Exploration in 2022
generated sufficient credits to keep the property in good standing for several years, accordingly no work was
conducted in 2023 whilst FCM focussed exploration on other properties.
Figure 32 showing the Magical claim block in a geological district scale with pertinent ‘showings’.
Background
Geologically, the area contains a northeast trending sequence of clastic sediments, plus subordinate amphibolite.
These are bounded by the Gowan Lake Pluton in the northwest and the Cedar Lake Pluton in the southeast. The
contact between the Gowan Lake Pluton and metavolcanics is found in the east and southern areas of the property.
On the basis of nearology / vector, this is considered a potential host for gold mineralisation.
During the 2022 field season 11 rock chip samples and 56 soil samples were collected out of a helicopter supported
‘fly’ camp. The latter was analysed by the mobile metal ion (“MMI”) methodology, see Figure 33.
49
Figure 33 MMI sampling on the Magical property
The anomalous molybdenum (“Mo”) and arsenic (“As”) close to the northwest end of the MMI survey at the
contact of the Gowan Lake Pluton is of interest and, given the gold occurrence to the northeast and southwest, on
trend (but off property). This is a significant encouragement for the property’s potential.
For planned future work it is proposed that the soils lines are extended as well as further lines in the southwest to
validate the anomalism associated with the contact / shear as well as prove strike continuity.
50
Sugar Cube
The Sugar Cube claim block of 205 claims, covering ~43km², is contiguous to the north-west of Silver Lake’s
1.6Moz+ Sugar Zone gold mine. Sugar Cube was one of the ‘seed’ properties that formed the pre-IPO package.
Previous workers interpreted from the limited geological information that the property could potentially contain
the remnants of a (subparallel, arcuate) greenstone belt.
Whilst virtually no ground-based exploration was conducted in 2022, or 2023, the air magnetic/ VTEM
geophysics survey undertaken in early 2023 provided sufficient credits to maintain this entire block through 2023
and into 2024.
Figure 34 the Sugar Cube property with the government regional magnetics as background as well as district historical
showings.
During historic (2021) ground reconnaissance by FCM, sulphide-rich metasediments that were previously
unmapped were located (off property). Subsequently, greenstone boulders were located on the claim block by
FCM. However, generally, the property is covered by overburden masking outcrop. The lack of exposure
determined that the best next step for exploration was a geophysical survey.
Accordingly, in Q1 2023, a 578-line km geophysics survey comprising a helicopter-borne low-level 100m line
51
spacing magnetic as well as electromagnetic (“EM”) survey was completed.
Geophysical data were acquired along N-S (N00-N180) oriented transverse lines spaced 100 m apart and control
lines-oriented E-W (N090-N270) and spaced 1000 m apart. The helicopter maintained a mean altitude of 86 m
above ground level with an average survey speed of 32.0 m/s (115 km/hr). The TDEM transmitter (Tx) loop was
suspended approximately 49 m below the helicopter (37 m nominal terrain clearance) and receiver (Rx) coil and
magnetic sensors suspended approximately 25 m above the Tx loop (61 m nominal terrain clearance).
The interpretation by PGW determined the future field work to ‘ground-truth’ the identified anomalies, See Figure
35.
Figure 35: Interpretation provided by PGW on the EM survey conducted on the Sugar Cube property.
The survey was successful in so much no obvious remnants of green stone were evident. However, the central
sector of the block merits further work and will be a focus for a future exploration programme. Other sectors will
not be apportioned assessment credits and it is likely that those mining claims will lapse. With this is mind, the
Company is impairing the property to zero value.
52
Summary, strategy, and conclusions
First Class Metals, through its Canadian subsidiary, controls nine claim blocks totalling ~230km² in northwest
Ontario, Canada. Seven of the nine blocks are 100% owned. Two claim blocks (North Hemlo and Sunbeam) account
for well over half of the total area.
All of the seven IPO properties as well as the properties acquired, have sufficient assessment credits generated by field
work in 2023, to keep them in good standing through to proposed field work in 2024. The Sugar Cube block is now
impaired as a result of the magnetic survey results. Regardless FCM holds funds required to keep all the claims in
good standing.
FCM initiated a systematic diligent exploration programme covering the ‘Big four’ (North Hemlo, Esa, Sunbeam
and Zigzag), properties in 2023. The results were sufficiently encouraging to warrant further follow-up exploration
in the upcoming field season. Particularly successful was the drilling at Zigzag and the stripping at Sunbeam,
notwithstanding the ‘new discovery’ on the Dead Otter trend. However, it must be noted that most properties
explored still have areas requiring prospecting and whilst the cornerstone of the exploration is gold, FCM contains
in its portfolio precious, base (battery) and critical (lithium) mineral targets.
Six of the properties achieved active Exploration Permits in 2023, this is a veritable accomplishment in only the
second year of listing. Furthermore, one property, Zigzag, was acquired and brought to drilling status with a notable
a drill programme being conducted within the year.
Whilst the annual commitment to maintain the claims is circa CAD$450,000, this is not a required spend given that
credits from 2022 carry over to the 2023 season and in some instances into 2024. FCM intends to build off the positive
exploration results and progress the exploration of the properties by drilling where permitting, funding and logistics
allow, to a monetising event.
FCM has a business model / strategy to assess, value add and develop the properties towards either a sale, joint
venture, or relinquishment event. It is currently not the Company’s stated aim to become a producer. Priorities will
be geared toward the completion of first-pass exploration (realistically drilling) of the principal properties in order
to fully evaluate the portfolio, both on the merits of the properties and a ranking process.
The 2023 field season’s activities focused on bringing four properties to drill ready status, these being Sunbeam,
Zigzag, Esa and North Hemlo. In the meantime, GT Resources (Palladium One) continued the exploration / drilling
of the West Pickle Lake project areas and produced a National Instrument 43-101, as required under the JV terms.
The Company’s strategy remains on track: to identify potential, value add, then monetise by JV or by sale.
53
STRATEGIC REPORT
Key Performance Indicators
a) Financial
As a listed company, the primary key performance indicator of the Group is its share price on the London Stock
Exchange (LSE) and is provided below:
31-Dec-2022
1
31-Dec-2023 Change
£ £ %
Market Capitalisation
£11.64m
£
5.00
m
Share
Price
16.75p
6.1p
-
63.5
Since the Company’s listing the Company’s share price on the LSE has been constantly monitored by the
management.
b) Non-financial
Due to the nature of the business of the Group typical non-financial KPI’s (such as customer retention rate,
conversion rate, production efficiency measures etc.) are not applicable to us. Further, while the Group has an
effective ESG policy in place, due to unavailability of data such KPI’s could not be measured and assessed for the
relevant time period. For further details regarding the Group’s ESG policy, please see the ESG section of this report.
1
Share price 30/12/2022 16.75p, Shares in Issues 81,886,294
54
The principal risks and uncertainties
The principal risks and uncertainties of the Group
2
are outlined below.
A majority of the Group’s operating costs will be incurred in US and Canadian dollars, whilst the
Group has raised capital in £ Sterling
The Group will incur exploration costs in US and Canadian Dollars, but it has raised capital in £ Sterling.
Fluctuations in exchange rates of the US Dollar and Canadian Dollar against £ Sterling may materially affect the
Group’s translated results of operations. In addition, given the relatively small size of the Group, it may not be
able to effectively hedge against risks associated with currency exchange rates at commercially realistic rates.
Accordingly, any significant adverse fluctuations in currency rates could have a material adverse effect on the
Group’s business, financial condition and prospects to a much greater extent than might be expected for a larger
enterprise.
Exploration, Development and Operating Risk
Resource exploration and development is a speculative business, characterised by a number of significant risks
including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits
but also from finding mineral deposits that, though present, are insufficient in quantity and quality to return a profit
from production. Exploration and development work is the Group’s sole business activity.
This risk is accentuated where exploration activity is not carried on as an ancillary activity to a developed business
producing operating cash flows from commercial quantities of saleable material from operational activity which can
be used to mitigate this risk. The marketability of minerals acquired or discovered by the Group may be affected by
numerous factors that are beyond the control of the Group and that cannot be accurately predicted, such as market
fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such
other factors as government regulations, including regulations relating to royalties, allowable production,
importing and exporting minerals and environmental protection, the combination of which factors may result in
the Group not receiving an adequate return of investment capital.
The business of exploration for minerals and mining involves a high degree of risk. Few properties that are
explored, even those demonstrating initial potential, are ultimately developed into producing mines. There is no
assurance that the Group’s mineral exploration and development activities will result in any discoveries of
commercial mineral bodies.
The long-term profitability of the Group’s operations will in part be directly related to the costs and success of its
exploration and development programs, which may be affected by a number of factors. In recent years, both metal
prices and publicly traded securities prices have fluctuated widely.
The Group is not currently generating revenue and will not do so in the near term
The Group is an exploration company and will remain involved in the process of exploring and assessing its asset
base for some time. The Group is unlikely to generate revenues until such time as it has made a commercially
viable discovery. Given the early stage of the Group’s exploration business and even if a potentially commercially
recoverable reserve were to be discovered, there is a risk that the grade of mineralisation ultimately mined may
differ from that indicated by drilling results and such differences could be material. Accordingly given the very
preliminary stages of the Group’s exploration activity it is not possible to give any assurance that the Group will
ever be capable of generating revenue at the current time.
2
(FCM and FCMC are collectively referred to as the “Group”)
55
The Group will need additional financial resources if it moves into commercial exploitation
of any mineral resource that it discovers
Whilst the Group has sufficient financial resources to conduct its planned exploration activities, meet its
committed licence obligations and cover its general operating costs and overheads for at least 12 months,
the Group will need additional financial resources if it wishes to commercially advance any mineral
resource discovered because of its exploration activity.
The Group has budgets for all near and short-term activities and plans, however in the longer term the
potential for further exploration, development and production plans and additional initiatives may arise,
which have not currently been identified and which may require additional financing which may not be
available to the Group when needed, on acceptable terms, or at all. If the Group is unable to raise
additional capital when needed or on suitable terms, the Group could be forced to delay, reduce, or
eliminate its exploration, development, and production efforts.
The Group is unaware of any further risks that the business of the Group may be subject to under
prevailing market conditions.
Going Concern
As a junior exploration company, the Directors are aware that the Group must seek funds from the market
in the next 12 months to meet its investment and exploration plans.
The Group’s reliance on a successful fundraising presents a material uncertainty that may cast doubt on the
Group’s ability to continue to operate as planned and to pay its liabilities as they fall due for a period not
less than twelve months from the date of this report.
The Group successfully raised £1,918,623 in the year ended 31 December 2023 through a combination of
issuing new shares and warrant conversions. As at the year-end date the Group had total cash reserves of
£140,802 (2022: £712,715)
The Directors are aware of the Group’s reliance on fundraising within the next 12 months and the material
uncertainty this presents but having reviewed the Group’s working capital forecasts they believe the
Group is well placed to manage its business risks successfully providing the fundraising is successful.
Section 172 (1) Statement
The First Class Metals Plc Board is cognisant of its legal duty to act in good faith and to promote the
success of the Group for the benefit of its shareholders and with regard to the interests of stakeholders and
other factors. These include the likely consequence of any decisions we make in the long term, the need to
foster relationships we have with all of our stakeholders; the impact our operations have on the environment
and local First Nation communities, and the desire to maintain a reputation for high standards of business
conduct.
The Board takes a long-term approach to creating and realising value for the shareholders and is aware of
the capital and time required in order to develop a resource projects. All of the Group’s key assets are early-
stage exploration.
The Directors, both individually and collectively, believe, in good faith, that throughout the year and at
every meeting of the Board and management when making every key decision, they have acted to promote
the success of the Group for the benefit of its members as a whole, as required by Section 172 of the
Companies Act 2006, having regard to the stakeholders and matters set out in section 172(1) of the
Companies Act 2006. The Directors’ Section 172 Statement follows.
Section 172 of the Companies Act is contained in the part of the Act which defines the duties of a director
and concerns the “duty to promote the success of the Company”.
56
Section 172 adopts an ‘enlightened shareholder value’ approach to the statutory duties of a company
director, so that a director, in fulfilling his duty to promote the success of the company must act in the way
he considers, in good faith, would be most likely to promote the success of the Company for the benefit of
its members as a whole, and in doing so have regard to other specified factors insofar as they promote the
Company’s interests.
The Board of FCM recognises its legal duty to act in good faith and to promote the success of the Group
and the Company for the benefit of its shareholders and with regard to the interests of stakeholders as a
whole and having regard to other matters set out in Section 172. These include the likely consequences in
the long term of any decisions made; the interest of any employees; the need to foster relationships with
all stakeholders; the impact future operations may have on the environment and local communities; the
desire to maintain a reputation for high standards of business conduct and the need to act fairly between
members of the Company.
The Board recognises the importance of open and transparent communication with shareholders and with
all stakeholders, including landowners, First Nation communities, and regional and national authorities.
We seek to maximise the industry’s benefits to local communities, while minimising negative impacts to
effectively manage issues of concern to society. Shareholders have the opportunity to discuss issues and
provide feedback at any time.
The application of the Section 172 requirements can be demonstrated in relation to the Group operations
and activities during the past year as follows.
Having regard to the likely consequences of any decision in the long term
The Group’s purpose and vision are set out in the Chairman’s Statement and in this Strategic Report. The
Board oversees the Company’s strategy and is committed to the long-term goal of the development of the
Ontario exploration projects. The activities towards that goal are described and discussed in the Strategic
Report. The Board remains mindful that its strategic decisions have long-term implications for the
progression of all these properties, and these implications are carefully assessed.
Having regard to the need to foster the Group’s business relationships with others
The Group operates as a mineral exploration business, without any regular income and is entirely
dependent upon new investment from the financial markets for its continued operation. The Board values
the benefits of maintaining strong relationships with key partners, contractors, and consultants. This is
discussed in more detail elsewhere in this Strategic Report.
Having regard to the interests of the Group employees
The Group currently has no full-time employees and is managed by its directors and a small number of
associates and subcontract staff. The Board takes steps to ensure that the suggestions, views, and interests
of the Group’s personnel are considered in decision-making.
Having regard to the desirability of the Company maintaining a reputation for high standards of
business conduct
The Board is committed to high standards of corporate governance, integrity, and social responsibility and
to managing the Company in an honest and ethical manner, as further discussed in the Corporate
Governance Report. The Directors strive to apply ethical business practices and conduct themselves in a
responsible and transparent manner with the goal of ensuring that FCM maintains a reputation for high
standards of business conduct and good governance.
Having regard to the impact of the Company’s operations on the community and the environment
The Board takes a broad range of stakeholder considerations into account when making decisions and gives
careful consideration to any potential impacts on the local community and the environment. The Board
strives to maintain good relations with the local community, especially with the First Nations peoples of
Ontario.
57
We recognise the safety and well-being of our employees, local communities, and other stakeholders as a
non-negotiable priority. Our commitment to high environmental, social and governance (ESG) standards
is central to maintaining our license to operate, to create value for all stakeholders and to ensure commercial
success. Our operations are guided by an acute awareness of the role we play as a company in meeting the
UN’s Sustainable Development Goals (SDGs), including the critical role of strategic minerals in supporting
global climate action and complementing resource development in Canada.
As a result, ESG is at the centre of everything the Group undertakes. The Group is dedicated to exploring
for precious and battery/base metals in a socially and environmentally responsible way in an industry that
will play an essential role in the transition to a lower-carbon economy through underpinning the supply
chain for sustainable battery and electric vehicle manufacturing as well as other industrial growth in
Canada.
In this way, the Group aims to play an important role in helping Canada meet its emissions reduction
targets. FCM aims to comply with all relevant UK and Canadian standards, as well as accepted
international guidelines, including strict adherence to the health, safety and environmental standards and
regulations, as well as the applicable elements of the Equator Principles. The Group will also endeavour to
provide stakeholders with clear insights into our operations to increase assurance regarding the ESG and
health and safety aspects of our business.
Our policy consists of five pillars:
1) responsible stewardship,
2) strong partner for local communities (First Nations),
3) an enabler of energy transition,
4) ensuring safe workplaces and operations, and
5) strong governance and an inclusive culture.
Our broad commitments are outlined below. Throughout all operations and our activities, we aim to:
Play a positive and critical role in the green energy transition.
Operate in an environmentally responsible manner.
Promote diversity Inclusion and equality.
Our full ESG report is available on our website.
Greenhouse Gas (GHG) Emissions
The Company is aware that it needs to measure its operational carbon footprint in order to limit and control
its environmental impact. The extent to which these activities together with the Group’s administrative and
management functions result in greenhouse gas emissions is impracticable to estimate and, in any event,
less than the amount reportable under the Energy and Carbon Regulations 2018. Additionally, the
Company will only measure the impact of its direct activities, as the full impact of the entire supply chain
of its suppliers cannot be measured practically.
Board, Shares and Related Parties
Having regard to the need to act fairly as between members of the Group, the Group has only one class of
share in issue and all shareholders benefit from the same rights, as set out in the Articles of Association,
and as required by the Companies Act 2006. Since the IPO a Shareholder Agreement has been in place
with Power Metal Resources PLC, the largest shareholder, which provides that FCM will maintain an
independent Board and any transactions between Power Metal Resources and FCM will be at an arm’s
length basis. The Board recognises its legal and regulatory duties and does not take any decisions or actions,
such as selectively disclosing confidential or inside information, that would provide any shareholder with
any unfair advantage or position compared to the shareholders as a whole,
58
TCFD Compliance Statement
CLIMATE RELATED FINANCIAL DISCLOSURES
Introduction
The Board recognises that transparency regarding climate-related risks and opportunities is critical to
maintaining the trust of our stakeholders and allows our investors to understand the implications of the
Group’s activities on climate change. The Board's consideration of key environmental risks is included
under the principal risks and uncertainties section of the Director's Report. The Board also presents the
following synthesis of its adoption of the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD), structured into four sections: Governance, Risk Management, Strategy and Metrics
and Targets.
Governance
The Board recognise that operating responsibly, which includes minimizing the environmental impact of
our operations, is fundamental to the long-term success of the Group. We believe building a better future
involves embedding climate awareness throughout our organisation, starting at the top.
The Board oversees the management of specific risks and opportunities, including climate-related risks
and opportunities. The senior management team provides regular updates to our Board on their activities,
and, in addition, the Board reviews the risks associated with the Group’s operations throughout the year.
Risk Management
The Board recognises that climate change risk is a global issue that may impact how we run our business,
both today and in the future. As such, we continue to look for ways to improve our understanding of
climate-related risks. However, although the impact of climate change is extremely low at this stage in the
Group’s development, we are conscious that "doing nothing" isn't an acceptable response to the impact
climate change may have on the business in the future. We are therefore working to integrate climate risk
variables into our overall risk management process and establish formal multi-disciplinary processes.
Strategy
The Group operates from a corporate head office in the UK but holds metal exploration assets in Ontario,
Canada. The nature of these assets includes early-stage exploration with limited invasive impact. The
Board is conscious of the inherent environmental risks associated with metals exploration. However, the
Board actively encourages its contractors to operate within international environmental guidelines and to
perform its activities using the most up-to-date equipment.
Metrics & Targets
The Board is committed to reducing its impact on the environment in all aspects of its business activities
in which it operates. The Board engages with all its key stakeholders and partners and encourages the
reduction of CO2 emissions throughout the value chain to promote an environment that actively strives
towards achieving 'net zero' by 2035. However, at this stage in the Group's development there are no formal
metrics or targets to measure the Group's emissions against, but the Board continues to review the need to
implement metrics & targets.
59
This report is approved by the Board on June 132024 and signed on its behalf by:
Marc J. Sale
CEO
60
CORPORATE GOVERNANCE REPORT
Introduction
The Company is considered as a ‘small cap’ company listed on the main market of the London Stock Exchange.
It has a board of directors consisting of 4 directors. Of these directors, 2 are considered as Executive directors and
2 are considered Independent Non-Executive Directors. James Knowles, the Executive Chairman, is the only full-
time employee of the Company. In order to meet its work-related requirements, the company hires contractors on
a periodic basis as and when the need arises.
Considering the small size of the Company, the Board believes that it can perform a majority of the functions
required by it or through its direct supervision. The Company has two committees: the Audit Committee and the
Remuneration Committee which are constituted mainly by the two Independent Non-Executive Directors.
Further information on the Boards administrative and management along with information about each of the two
Board committees and its composition, function as well as their respective activities for the year 2023 can be
found below in this Corporate Governance Report.
Chairman’s Statement
First Class Metals seeks to operate with a high degree of good corporate governance practices at its core. Corporate
governance refers to the set of processes, policies, and procedures that are in place to ensure that a company
operates in a responsible and ethical manner. This includes everything from financial oversight to the way that we
interact with our employees, and other stakeholders.
Effective corporate governance is crucial to the long-term success of our Company. By maintaining high standards
of transparency, accountability, and ethical behaviour, we can build trust with our stakeholders and create a strong
foundation for sustainable growth.
To that end, we have established a comprehensive framework for corporate governance that covers all aspects of
our operations. This includes a clear code of conduct for all employees (currently just the directors), regular audits
and assessments of our financial and operational performance, and robust systems for risk management and
compliance.
We believe that our commitment to corporate governance is a key differentiator for our Company, and we will
continue to invest in this area to ensure that we maintain the highest standards of integrity and ethical behaviour
in all that we do.
The Chairman takes the lead in ensuring that the various facets of the Company are functioning in an ethical way
compliant with best practices in the industry. Under the leadership of the Chairman the Company has policies in
place in order to ensure effective corporate governance. These policies are reviewed annually. They include:
The Board aims to lead by example and do what is in the best interest of the Company. We operate in remote and
developing areas and ensure our employees and contractors understand their obligations towards the environment
and in respect of anti-bribery and corruption. Regular calls with senior employees serve to refresh and re-iterate
the Company’s ethical standards as they apply to the operational issues that are discussed on that call. All
employees are informed of responsibilities with regard to anti-bribery and anti-corruption when they join the
Company. Contracts with suppliers also reflect these requirements. Employees are required to treat each other
61
with respect and to not tolerate any form of discrimination.
Anti-Bribery Policy
The anti-bribery policy of the Company aims to ensure that the Company and its employees, agents, and business
partners comply with all relevant anti-bribery laws and regulations. The policy prohibits any form of bribery,
including giving, offering, promising, or receiving bribes, and outlines the procedures for reporting and investigating
any suspected violations of the policy. The policy also emphasizes the importance of due diligence in the selection
and monitoring of business partners, and provides guidance on gifts, hospitality, and donations. The Company’s
commitment to anti-bribery measures is often reinforced by training, regular risk assessments, and reviews of the
policy’s effectiveness.
Whistle Blower Policy
The whistle-blower policy of the Company is designed to encourage employees and others to report any suspected
wrongdoing, including illegal or unethical activities, without fear of retaliation. The policy outlines the procedures
for reporting such concerns, including options for confidential reporting, and ensures that all reports will be
investigated in a fair and objective manner. The policy also emphasizes the Company’s commitment to protecting the
confidentiality of whistle-blowers and to taking appropriate action against any retaliation. The Company typically
provides training and guidance to its employees and other stakeholders to promote awareness of the policy and its
importance.
Environmental, Social, and Governance (ESG) Policy
The ESG policy of the Company outlines its commitment to environmental, social, and governance principles and
its approach to managing ESG risks and opportunities. The policy covers a range of issues, including climate
change, energy use, human rights, labour standards, and board diversity. The Company sets targets and measures
its performance against relevant ESG standards and integrates ESG considerations into its decision-making
processes. The Company also engages with stakeholders, including investors, suppliers, and communities, to
promote transparency and accountability, and to identify and address emerging ESG issues. The Company’s ESG
policy demonstrates its commitment to responsible and sustainable business practices, which can contribute to
long-term value creation and resilience.
Equality and Diversity Policy
The Board is committed to our equality, diversity and inclusion policies. The Company actively promotes equality,
diversity and inclusion, and proactively removes and addresses any activities or behaviours that may jeopardise
this policy.
The Company aims to create an environment where all stakeholders can work harmoniously, feel valued,
appreciated, and included, irrespective of race ethnicity, culture, gender, skin colour, sexual orientation, marital
status, religion, disability, ability, educational background, family background, political background, health or
representative of any community.
The Company is an equal opportunity employer, which allows equal opportunity for employment and progression
in the organisation on the basis of ability, qualifications, and aptitude for the work. Every employee shall be treated
equally and have the right to a harmonious work environment where an individual is treated fairly and with dignity
and respect.
The Board are committed to equality, diversity, and inclusion. While is no formal diversity policy in place due to
the current size of the Group, the Directors remain committed to diversity among our staff and leadership team,
and this is revisited each year. The Company actively promotes equality, diversity, and inclusion, and proactively
removes and address any activities or behaviours that may jeopardise this commitment. The Company aims to
create an environment where all stakeholders can work harmoniously, feel valued, appreciated, and included,
irrespective of race, ethnicity, culture, gender, skin colour, sexual orientation, marital status, religion, disability,
ability, education background, family background, political background, health or representative of any
community.
62
Compliance with the Quoted Company Alliance Code
In addition to the above, although the Company is not required to comply with the UK Code of Corporate
Governance because the Company does not have a Premium listing, compliance with the Quoted Company
Alliance Code is being undertaken on a voluntary basis to the extent it is considered appropriate considering the
size of the Group. In specific, the Group has adopted and complies with the following principles:
Principle One: Establish a strategy and business model which promote long-term value for shareholders.
The Board implements a well-defined strategy that aims at securing long-term growth for the shareholders. The
details of the same can be found in the Strategic Report.
Principle Two: Seek to understand and meet shareholder needs and expectations. The Board is
committed to maintaining good communications with its shareholders and with investors with a view to
understanding their needs and expectations. The Board and, in particular, the Chairman, maintain close contact
with many of the shareholders.
All shareholders are encouraged to attend the Company’s Annual General Meetings where they can meet and
directly communicate with the Board.
The Company publishes an Annual Report, Financial Statements, and Interim Results. All of which are
available at the Company’s website. The Company also provides regular regulatory announcements and business
updates through the Regulatory News Service (RNS) and copies of such announcements are posted to the
Company’s website.
Shareholders and investors also have access to information on the Group through the Company’s website,
www.firstclassmetalsplc.com which is updated on a regular basis, and which also includes the latest corporate
presentation of the Company.
Principle Three: Take into account wider stakeholder and social responsibilities and their implications for
long-term success.
The Company will engage positively and seek to develop close relationships with local communities, regulatory
authorities and stakeholders which are in close proximity to or connected with its overseas operations and where
appropriate the Board will take steps to safeguard the interests of such stakeholders.
The Board has adopted detailed ESG, Equality and Diversity, Anti-Bribery and Whistle-blower policies. The
Board plans, in due course, to adopt further appropriate policies to ensure that the Group’s activities are compliant
with best industry practices.
Principle Four: Embed effective risk management, considering both opportunities and threats, throughout
the organisation.
The Board regularly reviews its business strategy and, in particular, identifies and evaluates the risks and uncertainties
which the Group is or may be exposed to. As a result of such reviews, the Board will take steps to manage risks or seek
to remove or reduce the Group’s exposure to them as much as possible.
The risks and uncertainties to which the Group is exposed at present and in the foreseeable future are detailed in
Principal Risks and Uncertainties in the Strategic Report.
The Company has a system of financial controls and reporting procedures in place which are considered to be
appropriate given the size and structure of the Group.
Principle Five: Maintain the Board as a well-functioning, balanced team led by the Chairman.
James Knowles, the Executive Chairman, leads the Board and is responsible for the effective performance of the
Board through control of the Board’s agendas and the running of its meetings. James Knowles, in his capacity as
63
Executive Chairman, also has overall responsibility for the corporate governance of the Company. James Knowles
takes an active part in the day-to-day corporate aspects of the Company. The day-to-day operational running of the
Group is delegated to Marc Sale, the Chief Executive Officer.
The Board holds Board meetings periodically, and at least four times a year, as issues arise which require the
attention of the Board. Prior to such meetings, the Board’s members receive an appropriate agenda and relevant
information and reports for consideration on all significant strategic, operational and financial matters and other
business and investment matters which may be discussed and considered.
The Board is supported by the Remuneration and Audit Committees, details of which are set out on below.
Principle Six: Ensure that between them the directors have the necessary up to date experience, skills and
capabilities.
The Directors’ qualifications and experience are set out on in the Directors’ Report. The Board believes that the current
balance of sector, technical, financial, operational and public markets skills and experience which its members have is
appropriate for the current size and stage of development of the Company. The Company Secretary provides advice and
guidance, as required, to the Board on regulatory matters, assisted by the Company’s lawyers. The Directors seek to keep
their skills up to date through co
ntinuing professional development and attending relevant courses. Directors from a technical
discipline are encouraged to maintain professional accreditation.
Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement.
The Board’s performance is reviewed and considered in the light of the progress and achievements against the
Group’s long-term strategy and its strategic objectives. However, given the size and nature of the Group, the
Board does not consider it appropriate to have a formal performance evaluation procedure in place. The Board
will closely monitor the situation as required.
Principle Eight: Promote a corporate culture that is based on ethical values and behaviours.
The Company has established corporate governance arrangements which the Board believes are appropriate for
the current size and stage of development of the Company.
The Company has adopted a number of policies applicable to directors, officers and employees and, in some cases,
to suppliers and contractors as well, which, in addition to the Company’s corporate governance arrangements set
out above, are designed to provide the Company with a positive corporate culture. Details of the Board’s Policies can
be found within this Corporate Governance Report.
Principle Nine: Maintain governance structures and processes that are fit for purpose and support good
decision-making by the Board.
Whilst the Board has overall responsibility for all aspects of the business, James Knowles, the Executive
Chairman, is responsible for overseeing the running of the Board and ensuring that Board focuses on and agrees
with the Group’s long-term direction and its business strategy and reviews and monitors the general performance
of the Group in implementing its strategic objectives.
The Board has established the Remuneration Committee and the Audit Committee with formally delegated duties and
responsibilities. Further, the Board will have a Nomination Committee in place in the coming months.
This Corporate Governance Statement will be reviewed at least annually to ensure that the Company’s corporate
governance framework evolves in line with the Company’s strategy and business plan.
Principle Ten: Communicate how the Company is governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders.
The Company’s approach to communication with shareholders and others is set out under Principles 2 and 3
above.
64
Leadership of the Board
The Board comprised of 2 Executive Directors and 2 Non-Executive Directors.
The Board is charged with the leadership of the Company and to ensure its long terms success. The key
responsibilities of the Board include:
Strategy and Planning
The Board is responsible for setting the Company’s long-term strategy and goals.
Risk Management
The Board identifies and assesses the risks associated with the Company’s operations, including financial, legal,
and reputational risks.
Financial Oversight
The Board oversees the Company’s financial operations, including budgeting, financial reporting, and auditing.
Corporate Governance
The Board ensures that the Company follows good corporate governance practices, including transparency,
accountability, and ethical behaviour.
Stakeholder Management
The Board considers the interests of all stakeholders, including shareholders, employees, suppliers, and the
community and ensures that the Company’s operations are sustainable and socially responsible.
Monitoring Performance
The Board monitors the Company’s performance against its goals and strategy. It regularly reviews the Company’s
financial and non-financial performance and makes necessary adjustments to ensure the Company is meeting its
objectives.
Division of Responsibilities
The Board has defined the responsibilities of the Chairman, and the CEO as follows:
James Knowles, Chairman: The Chairman is primarily responsible for leading the Board and providing direction for
the organisation. The Chairman is responsible for leading meetings, facilitating effective communication between
members of the Company, setting goals and strategies for the organisation, and ensuring accountability. He is also
directly involved in assisting the CEO on day-to-day matters
Marc Sale, CEO: The CEO is responsible for the day to day running of the Company and reports to the Board in
which role he is supported by the Chairman.
Independent Non-Executive Directors
Independent non-executive directors (INEDs) play a crucial role in corporate governance by bringing an objective
and independent perspective to the boardroom. Their primary responsibility is to act in the best interest of the
Company and its stakeholders by providing oversight, guidance, and strategic input to the board.
The role of the independent Non-Executive Directors is as follows:
• Provide independent oversight: INEDs are responsible for providing an objective and independent perspective
on the Company’s activities and performance. They scrutinize the Board’s decisions and ensure that the
Company is complying with legal and regulatory requirements.
• Monitor and advise on risk management: INEDs monitor the Company’s risk management policies and
procedures and advise the Board on potential risks and their mitigation strategies.
• Review and challenge management decisions: INEDs review and challenge management decisions to ensure
65
that they are aligned with the Company’s strategic goals and do not pose any risks to the Company’s reputation
or financial stability.
• Provide strategic guidance: INEDs bring their expertise and experience to the Board and provide strategic
guidance on matters such as mergers and acquisitions, capital allocation, and corporate social responsibility.
• Represent the interests of stakeholders: INEDs represent the interests of all stakeholders, including
shareholders, employees, customers, and suppliers, and ensure that their views are taken into account when
making decisions.
Andrew Williamson and Marc Bamber are considered to be INEDs of the Company.
Board Support, Meeting, and Attendance
The Board and its Committees meet regularly on scheduled dates. In leading and controlling the Company, the
Directors are expected to attend all meetings and their attendance for the financial year 2023 is shown in the
Directors’ Report section of this Annual report.
The Company Secretary plays a vital role in ensuring good governance, assisting the Chairman. Procedures are in
place for distributing meeting agendas and reports so that they are received in good time, with the appropriate
information. Ahead of each Board meeting, the Directors each receive reports which include updates on strategy,
finance, including management accounts, operations, commercial activities, business development, risk
management, legal and regulatory, people and infrastructure and on investor relations. The Directors may have
access to independent professional advice, where needed, at the Company’s expense.
Board Induction, Training and Development
New Directors are provided with a full and tailored induction in order to introduce them to the business and
management of the Company. Throughout their tenure, Directors are given access to the Company’s operations
and personnel, and receive updates on relevant issues as appropriate, taking into account their individual
qualifications and experience. This allows the Directors to function effectively with appropriate knowledge of the
Company.
The Board is satisfied that each Director has sufficient time to devote to discharging his responsibilities as a Director
of the Company.
Re-Election of Directors
All Directors are put forward for re-election on a three-year basis as is required by the Company’s Articles of
Association. The composition of the Board is provided above.
Board Committees
The Board has delegated and empowered two Committees: an Audit Committee and a Remuneration Committee.
The Company has thus far not formed a Nomination Committee due to the size of its Board. However, various
discussions are progressing, and the Company aims to have a Nomination Committee in place with Terms of
Reference for its operation in the forthcoming months.
Each Committee has written terms of reference set by the Board, which are reviewed annually. The Chair of each
committee reports to the Board on the activities of and determinations of such committee. A summary of each
Committee’s responsibilities and the work done during the year follows.
66
Audit Committee Report
Composition of the Audit Committee
The Audit Committee comprises of Marc Bamber (Chair of the committee), James Knowles and Andrew
Williamson. The Board considers all members of this committee to have the appropriate skills and expertise. See
Director biographies in the Directors’ report.
The appointments to the Audit Committee are made by the Board. Only members of the committee have the right
to attend these meetings, however the Executive Directors or senior financial members of the Company may be
invited by the Committee in order to provide their opinion as required. The external auditor may also attend the
meetings and discuss as required the planning and conclusions of their work. The committee also calls upon
information from management and consults with the external auditor if required.
The committee meets at least twice a year directly linked to the Company’s half year and full year results. It
further meets as required.
Operation of the Committee
The Audit Committee periodically reviews and updates the Terms of Reference in order to conform to best
practices. These are subject to Board approval.
The Committee works to a planned programme of activities, which are focused on key events in the annual
financial reporting cycle and other matters that are considered in accordance with its Terms of Reference.
The Committee operates within terms of reference approved by the Board, including:
• Considering the appointment of external auditors.
• Reviewing relationship with external auditors.
• Reviewing financial reporting and internal control procedures.
• Reviewing the consistency of accounting policies.
An important part of the role of the Audit Committee is its responsibility for reviewing the effectiveness of the
Company’s financial reporting, internal control policies, and procedures for the identification, assessment and
reporting of risk.
The Directors are responsible for internal control in the Company and for reviewing effectiveness. Due to the size
of the Company, all key decisions are made by the Board. The Directors have reviewed the effectiveness of the
Company’s systems during the period under review and consider that there have been no material losses,
contingencies, or uncertainties due to weaknesses in the controls. A key governance requirement of the Company’s
financial statements is for the report and accounts to be fair, balanced, and understandable. The coordination and
review of the Company wide input into the Annual Report is a sizeable exercise performed within an exacting time
frame. It runs alongside the formal audit process undertaken by external auditors and is designed to arrive at a
position where initially the Committee, and then the Board, is satisfied with the overall fairness, balance, and
clarity of the document.
An essential part of the integrity of the financial statements are the key assumptions and estimates or judgements
that have to be made. The Committee reviews key judgements prior to publication of the financial statements at
the full and half year, as well as considering significant issues throughout the year. In particular, this includes
reviewing any materially subjective assumptions within the Group’s activities. The Committee reviewed and was
satisfied that the judgements exercised by management on material items contained within the Annual Report
were reasonable and that there were no significant issues that needed to be addressed in relation to the financial
statements.
67
One meeting of the Audit Committee was held on March 2024 in order to ascertain the auditor’s performance and
recommend to the Board that RPG be re-appointed as auditors to the Company for a further period of one year.
Internal financial control
Financial controls have been established to maintain proper accounting records and to provide reliable financial
information for internal use. Key financial controls include:
• The maintenance of proper records;
• A schedule of matters reserved for the approval of the Board;
• Evaluation, approval procedures and risk assessment for acquisitions; and
• Close involvement of the Executive Directors in the day-to-day operational matters of the Group.
The Directors are responsible for the Group’s methods of internal control. The Group’s risk management protocols
and internal control methods are designed to reduce risk associated with the business of the Group and achieve its
strategic objectives. The Group has established procedures of internal control that are considered adequate for a
business of the size of the group.
The Directors are responsible for internal control in the Group and for reviewing effectiveness. Due to the size of
the Company, all key decisions are made by the Board. The Directors have reviewed the effectiveness of the
Company’s systems during the period under review and consider that there have been no material losses,
contingencies, or uncertainties due to weaknesses in the controls.
Audit, Risk and Internal Control
The Audit Committee did not face any significant issues in relation to the preparation of the financial statements.
The financial accounts were prepared by the Company with the assistance of Aventus Partners and was audited
by RPG.
Reappointment of Royce Peeling Green Limited (“RPG”) as auditors
On 6
th
February 2023 KNAV Limited, the previous auditor to First Class Metals Plc, gave written notice to the
Company of their resignation as the auditor of the Company. KNAV confirmed that there were no circumstances
connected with their resignation which they consider should be brought to the attention of the Company’s members
or creditors and stated that they resigned because they had decided not to register as an auditor eligible to undertake
audits of Public Interest Entities.
Following At a meeting of the audit committee held on March 26, 2024, the audit committee assessed the
performance of RPG for the previous year and recommended to the Board that they be re-appointed as auditors to
the Company for an additional term of one year.
RPG is a long-established firm of Chartered Accountants and a PIE registered auditor based in Manchester,
England. RPG is a UK member of DFK International, the sixth largest accounting association in the world
according to the International Accounting Bulletin’s annual World Survey Report in 2022, with worldwide
revenues in excess of $1.5 billion across 94 countries. In the UK, RPG operates from two offices with around 80
staff, including 9 directors.
RPG do not provide any non-audit services therefore their objectivity and independence are safe-guarded.
It is also to be noted that there are no contractual obligations restricting the Board’s choice of external auditor.
Marc Bamber
Audit Committee Chairman
June 13, 2024
68
Remuneration Report
Composition of the Remuneration Committee
The Remuneration Committee comprises of Andrew Williamson (Chair of the Committee), Marc Sale (CEO), and
Marc Bamber.
Role of the Remuneration Committee
The Remuneration Committee’s function includes ascertaining the policy and amount of the remuneration of
the Executive Directors and other executives including bonuses, incentive payments and share options.
Remuneration Policy
The Remuneration Committee is committed to ensuring that the Company’s key executive team is
incentivised to drive sustainable earnings growth and returns to shareholders, thereby creating a genuinely
strong alignment of interests between management and investors. The Company’s remuneration policy aims
to provide its members with a competitive market aligned remuneration package to reward their performance
and deliver value for shareholders. Remuneration packages are aligned against to that of similar organisations
in the sector.
Remuneration policy is designed to ensure that it attracts, retains, and motivates the executive members of the
Company for the long term. The basic structure of a remuneration package consists of a basic salary, an annual
bonus plan and a pension plan.
The remuneration policy is based on the following principles:
1. Fairness and equity: The remuneration should be fair and equitable, ensuring that employees receive
compensation that is commensurate with their skills, experience, and performance.
2. Transparency: The remuneration policy should be transparent, ensuring that employees understand how
their compensation is determined, including the criteria used for performance evaluation and promotion.
As a public Company, an effective measure used to evaluate performance is the prevailing market price of
the Company’s stock and its performance over various time periods.
3. Competitive compensation: The policy aims to offer compensation that is competitive with industry standards,
allowing the Company to attract and retain top talent.
4. Incentives for performance: The policy includes incentives for high performance, such as bonuses or other
forms of variable pay, to motivate employees to achieve their goals and objectives.
5. Flexibility: The policy is flexible, allowing for adjustments to compensation based on changes in market
conditions, industry trends, and individual employee performance.
6. Regular review: The policy is regularly reviewed and updated to ensure it remains effective and relevant to
changing organisational needs and market conditions.
Remuneration of Directors
The remuneration policy and packages of the Directors were duly covered in detail in the Annual Report 2022
and approved at the Annual General meeting of the Company held on June 29, 2023. Further, details of the
same will be submitted to the general body of the shareholders at the forthcoming Annual General Meeting of
the Company.
a. Remuneration of Executive Directors
During the year, the Executive Directors received a basic salary and benefits as set out in the table below.
b. Remuneration of Non-Executive Directors
The remuneration of the Non-Executive Directors is set by the Board. They attend meeting of the Board of the
Company as well as perform their functions in the various Board committees.
69
Directors Remuneration Report
Notes:
1. Ayub Bodi’s Employment Contract was terminated on the 15th December 2023.
2. Danesh Varma resigned on the 15th October 2023.
3. Andrew Williamson’s directorship commenced on the 15th October 2023
4. Marc Sale’s company Specialist Exploration Services Scotland Limited (“SES”) was paid a total of
£181,814 during the year. These payments include travel/accommodation & out of pocket expenses
incurred through the period by SES on behalf of First Class Metals PLC amounting to £8,981.90.
5. During the period SES subscribed for 375,000 10p shares for £37,500.
Company Pension Scheme
As of 31 December 2023, the Company has a pension plan in place which the Directors may opt in to whereupon
the Company will pay contributions in relation to their remuneration. Thus far, only Marc Sale has opted in and
contributed a sum of £1,500 into a private pension scheme. The Company has not paid out any further excess
retirement benefits to any other Directors.
Service Contracts
The Company has entered into service contracts with each of its Directors. These contracts are on an ongoing
basis with the Executive Directors and includes a one month notice period in case of termination. The contracts
with the INED’s are on a three-year basis with an option to renew upon mutual agreement.
The Company entered into a consultancy agreement with Specialist Exploration Services (Scotland) Limited
(SES) on 1 March 2022 (SES Consultancy Agreement), pursuant to which SES agreed to provide certain
consultancy services to the Company.
SES is a company owned by Marc Sale. The engagement commenced with effect from 1 March 2022 and shall
continue unless terminated as provided for in the SES Consultancy Agreement or on the giving of not less than
four weeks’ prior written notice by either party. The engagement is for a minimum commitment of at least 10
days per month with such additional time, if any, as may be necessary for their proper performance of the
services. During the year, the Company paid a bonus to Marc Sale by paying a sum of £50,000 to SES which
was used by SES to buy 375,000 shares of the company at 10p per share.
70
The Company has entered into an agreement for services with Vrynwy Limited on October 12, 2023. Vrynwy
Limited has appointed Andrew Williamson as an INED of the Company. The agreement has a term of three
years. The agreement may be terminated by either party by giving one month’s notice to the other. The
agreement is subject to the Company’s articles of association as may be amended from time to time. Copies of
the letters of appointments and service contracts awarded to Directors are kept at the registered office of the
Company for inspection.
Directors’ interest in shares
Holder
Number of
Shares
% of total
capital
issued
James Knowles 4,153,925 5.06%
Marc Sale 375,000 0.46%
Marc Bamber 377,965 0.46%
Andrew Williamson - -
One meeting of the committee was held in January 2023 in order to evaluate and recommend suitable bonuses
and pay increases to reward the efforts made by various members of the Company.
Consideration of shareholder views
The Remuneration Committee considers shareholder feedback received and guidance from shareholder bodies.
This feedback, plus any additional feedback received from time to time, is considered as part of the Company’s
periodic reviews of its policy on remuneration.
UK 10-year performance graph
The directors have considered the requirement for a UK 10-year performance graph comparing the Group’s
Total Shareholder Return with that of a comparable indicator. The directors do not currently consider that
including the graph will be meaningful because the Company has only been listed since July 2022, is not
paying dividends and is currently incurring losses as it gains scale. The directors therefore do not consider the
inclusion of this graph to be useful to shareholders at the current time. The directors will review the inclusion
of this table for future reports.
UK 10-year CEO table and UK percentage change table
The directors have considered the requirement for a UK 10-year CEO table and UK percentage change table.
The directors do not currently consider that including these tables would be meaningful because, as described
under the Directors’ Service Contracts section above directors have been engaged in the Company only since
July 2022. The directors will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance of spend on
pay compared to shareholder dividends paid. Given that the Company does not currently pay dividends the
directors have not considered it necessary to include such information.
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s
experience, and their current base salary. Where an individual is recruited at below market norms, they may
be re-aligned over time (e.g. two to three years), subject to performance in the role. Benefits will generally be
in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the Company will meet certain
relocation and/or incidental expenses as appropriate.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee, taking into account
contractual obligations.
71
Andrew Williamson
Remuneration Committee Chairman
June 13 2024
72
DIRECTOR’S REPORT
The Directors present their report together with the audited financial statements for the year ended 31 December
2023.
A review of the business and principal risks and uncertainties has been included in the Strategic Report.
Principal Activity
The principal activities of the Company during the period were the acquisition and the exploration and
development of its assets. Successful acquisitions have been completed in 2023 and more details can be found in
the Chairman’s Statement.
Dividends
No dividend has been paid during the year nor do the Directors recommend the payment of a final dividend (2022:
£nil).
Directors
The Directors who served during the year and up to the date hereof were as follows:
Date of appointment Date of resignation
Marc Sale
June 16, 2022
-
James Knowles
January 26, 2021
-
Andrew Williamson
October 15, 2023
-
Marc Bamber
July 22, 2022
-
Ayub Bodi
January 26, 2021
February 02, 2024
Danesh Varma
July 29, 2022
October 15, 2023
Directors’ Indemnity Provisions
The Company has implemented Directors and Officers Liability Indemnity insurance.
Donations
The Company made no political donations during the year (2022: £nil).
Share Capital
First Class Metals Plc is incorporated as a public limited company and is registered in England and Wales with the
registered number 13158545. The Company has one class of Ordinary Share, and all shares have equal voting rights
and rank pari passu for the distribution of dividends and repayment of capital.
Substantial Shareholdings
Details of changes in share capital during the year are detailed in note 17 to the financial statements. On 31
December 2023 shareholders may be analysed as follows:
73
James Knowles and Ayub Bodi have loaned the company 5,995,332 & 5,995,332 shares respectively to be returned on
the publication of prospectus or when headroom allows.
74
Board of Directors
The Board currently consists of two executive Directors & two independent non-executive Directors. It met
regularly throughout 2023 to discuss key issues and to monitor the Company’s overall performance. All matters
and committees, such as Remuneration and Audit are considered by this Board.
James Knowles
Executive Chairman
A corporate professional who has enjoyed a twenty-five-year career in the financial sector, James is primarily
focused on debt funding for Real Estate projects, most recently for Barclays Bank PLC. James is a seasoned
resource company investor and has consulted to several London and Canadian junior listed resource companies on
investor relations, public relations, and social media marketing activities.
Marc Sale
Chief Executive Officer
A corporate professional who has specialised in natural resources, specifically precious and base metals, with
a focus on gold, for over 25 years. Marc has worked on project assessment, exploration, and development in Africa,
the Americas, Europe, and Australasia. He has held Technical Directorships for several listed and private companies,
including Brancote PLC, Landore Resources PLC, Gold Mines of Sardinia, and Patagonia Gold. As a ‘Competent
Person’ he is accomplished in the preparation of Company reports and overseeing JORC/NI43-101 reporting as
well as delivery of presentations to investors, institutions, and shareholders.
Andrew Williamson
Non-Executive Director
Andrew qualified as a lawyer in 1990 and has worked in the corporate field throughout his career. As a corporate
partner, he advised on corporate and capital market transactions, both debt and equity. He has substantial
experience of listings on the major stock markets around the world. He also has extensive experience of public
and private corporate transactions and the creation of domestic and international investment funds. A former
institutional corporate stockbroker, nomad, and sponsor to the Full List, he is known to use his extensive
commercial experience to assist his clients with their legal issues. He has been recognized as a recommended
lawyer by legal 500 in the private acquisition and merger (sub £100m) category and in the debt capital market
category.
Marc Bamber
Non-Executive Director
A Global Corporate Financier, with over 20 years of experience in the hedge fund sector, capital markets, private
and institutional Investments, investor comms, and marketing. Marc was a core member of the multiple award-
winning RAB Special Situations Fund that delivered net returns of 50x to investors with circa. US$2.8Bn in Assets
Under Management (AUM) in just under five years. Marc is very active in the international markets and works
with a number of Toronto and London-listed companies in senior management roles.
Ayub Bodi
Executive Director
With management experience in the oil and gas industry and minerals exploration, Ayub is an experienced
resource executive with extensive public company exposure in the UK, Canada, and Australia.
Ayub Bodi was resigned as a Director of the Company on February 02, 2024.
75
Danesh Varma
Non-Executive Director
A Chartered Accountant with over 35 years of experience in the mining finance industry, Danesh has been a
director of American Resource Company, Northgate Exploration Ltd, Minco Resources. and Westfield Minerals
Ltd. He holds directorships with Labrador Iron Mines Holdings Limited, Buchans Resources, Canadian
Manganese Company, Brookfield Infrastructure Partners L.P., and Anglesey Mining PLC.
Danesh Varma resigned as a Director of the Company on October 15, 2023.
Directors’ powers
As set out in the Company’s Articles of Association, the business of the Company is managed by the Board which
may exercise all powers of the Company.
Directors’ Remuneration
A total of £461,361 was paid as remuneration to Directors for the year ended December 31, 2023. The
remuneration of the Directors will further be put to the approval of the shareholders at the forthcoming Annual
General Meeting of the Company
Board Activities
The Board has determined that the Company will have a minimum of four Board Meetings, two Audit Committee
Meetings and two Remuneration Committee Meetings each year. Due to necessary circumstances, the Board held a
total of 9 meetings during the year 2023. The meeting of the Audit Committee was held on 25 January 2023, and the
first meeting of the Remuneration Committee was held on 19 January 2023.
The table below provides an overview of the attendance of the various directors.
Board Meeting Attendance
Name of Director Meetings Attended
James Knowles 9
Ayub Bodi 5
Marc Sale 9
Danesh Varma 5
Marc Bamber 8
Andrew Williamson 3
Note: Danesh Varma resigned from the Board on the 15 October 2023, Andrew Williamson was appointed to the
Board on the 15 October 2023 and Ayub Bodi resigned from the Board on the 2 February 2024.
Explanation of Board Performance and Effectiveness
During the financial year ended 31 December 2023 a Board evaluation was carried out and it has been determined
that the Board has been effective during the period. Additionally, the Board believes that it has developed a
suitable composition in order to continue to perform as a cohesive Board for the foreseeable future.
Auditor
First Class Metals Plc had appointed Royce Peeling Green Limited (RPG) on 9 February 2023.
RPG has expressed its willingness to continue in office. At a meeting of the audit committee held on March 26,
2024, the audit committee assessed the performance of RPG for the previous year and recommended to the Board
that they be re-appointed as auditors to the Company for an additional term of one year.
76
A resolution to reappoint RPG will be proposed at the forthcoming Annual General Meeting.
Shareholder Communications
The Company uses its corporate website https://www.firstclassmetalsplc.com/ to ensure that the latest
announcements, press releases and published financial information are available to all shareholders and other
interested parties. The AGM will be used to communicate with both institutional shareholders and private
investors and all shareholders are encouraged to participate. The Company counts all proxy votes and will indicate
the level of proxies lodged on each resolution after it has been dealt with by a show of hands.
Disclosure of Information to the Auditor
Each of the persons who is a director at the date of approval of this Annual Report confirms that:
• so far as the director is aware, there is no relevant audit information of which the Company’s auditors
are unaware; and
• the director has taken all the steps that he ought to have taken as a director in order to make himself
aware of any relevant audit information and to establish that the Company’s auditors are aware of that
information.
Statement of Directors’ Responsibilities in respect of the Annual Report and the
financial statements
The Directors are responsible for preparing this report and the financial statements in accordance with applicable
United Kingdom law and regulations and UK adopted International Financial Reporting Standards (“IFRS”)
Company law requires the Directors to prepare financial statements for each financial period which present fairly
the financial position of the Company and the financial performance and cash flows of the Company for that
period.
In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable,
and understandable information;
• state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained
in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business; and
• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable
users to understand the impact of particular transactions, other events and conditions on the entity’s financial
position and financial performance.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company
and enable them to ensure that the Company financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that comply with that
law and those regulations, and for ensuring that the Annual Report includes information required by the Listing
Rules of the Financial Conduct Authority.
The financial statements are published on the Company’s website https://www.firstclassmetalsplc.com/. The work
carried out by the Auditor does not involve consideration of the maintenance and integrity of this website and
77
accordingly, the Auditor accepts no responsibility for any changes that have occurred to the financial statements since
they were initially presented on the website. Visitors to the website need to be aware that legislation in the United
Kingdom covering the preparation and dissemination of the financial statements may differ from legislation in their
jurisdiction.
The Directors confirm that to the best of their knowledge:
• the Company financial statements give a true and fair view of the assets, liabilities, financial position, and profit
of the Company;
• this Annual Report includes the fair review of the development and performance of the business and the position
of the Company together with a description of the principal risks and uncertainties that it faces; and
• the Annual Report and Financial Statements, taken as a whole, are fair, balanced, and understandable and provide
information necessary for shareholders to assess the Company’s performance, business, and strategy.
Forward Looking Statements
This document contains certain forward-looking statements. The forward-looking statements reflect the
knowledge and information available to the Directors of the Company and Group during preparation and up to
the publication of this document. By their very nature, these statements depend upon circumstances and relate to
events that may occur in the future and thereby involving a degree of uncertainty. The statements, estimates and
projections herein are based upon various assumptions by the Company that may not prove to be correct. Such
assumptions are inherently subject to significant economic and competitive uncertainties and contingencies, many
of which are beyond the control of the Company, and upon assumptions with respect to the future performance of
the Company that may be subject to change because of circumstances beyond the control of the directors and/or
the Company. The Company believes that such estimates and other assumptions are reasonable under the
circumstances, but no representation, warranty or other assurance is given that such statements, estimates and
projections will be realized. There may be variances between such projections and actual events and results.
Post balance sheet events
The Company received a further CAD$200,000 OJEP Grant from the Canadian Ministry of Mines for the Zigzag
lithium & critical metals property for work completed during 2023 in April 2024
In June 2024, an agreement was reached with the 79th GRP Limited to sell 100% of the McKellar and Enable
projects. The combined sale price is GBP £270,000
In addition to the ‘McKellar and Enable’ assets sale, FCM has entered into a £230,000 working capital term loan
with eh 79th GRP Limited in May 2024.
No other adjusting or significant non-adjusting events have occurred between the 31 December reporting date and
the date of authorisation.
This report is approved by the Board on June 13 2024 and signed on its behalf by:
78
James Knowles
Executive Chairman
June 13, 2024
79
First Class Metals Plc
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31
DECEMBER 2023
Note
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| £ | £ | ||
| Revenue | |||
| Administrative expenses | ( | ( ) | |
| Operating loss | 5 | ( | ( |
| Finance income | |||
| Finance costs | ( | ( | |
Net finance cost | 6 | ( | ( |
| Loss before tax | ( | ( | |
Taxation | 10 | ||
| Loss for the year | ( | ( | |
| Items that may be reclassified subsequently to profit or loss | |||
| Foreign currency translation gains | |||
| Total comprehensive loss for the year | ( | ( | |
| Total comprehensive loss attributable to: | |||
| Owners of the company | ( | ( | |
| The above results were derived from continuing operations. | |||
| Loss per share | |||
| Basic and diluted loss per share (pence) | 11 | ( | ( |
80
First Class Metals Plc
(Registration number: 13158545)
Consolidated Statement of Financial Position as of 31 December 2023
Note
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| £ | £ | ||
| Assets | |||
| Non-current assets | |||
Property, plant, and equipment | 13 | ||
Mineral property exploration and evaluation | 12 | ||
| Current assets | |||
Trade and other receivables | 15 | ||
Cash and cash equivalents | 16 | ||
| Total assets | |||
| Equity and liabilities | |||
| Equity | |||
Share capital | 17 | ( | ( |
| Share premium | ( | ( | |
| Equity reserve | ( | ( | |
| Foreign currency translation reserve | ( | ( | |
| Retained earnings | |||
| Equity attributable to owners of the company | ( | ( | |
| Current liabilities | |||
Trade and other payables | 21 | ( | ( |
Loans and borrowings | 19 | ( | ( |
( | ( | ||
| Total equity and liabilities | ( | ( |
81
First Class Metals Plc
(Registration number: 13158545)
Company Statement of Financial Position as of 31 December 2023
Note
31 December
2023
£
31 December
2022
£
Assets
Non-current assets
Property, plant, and equipment 13
903
812
Investments in subsidiary 14
581
581
1,484
1,393
Current assets
Trade and other receivables 15
3,52
8
,
626
2,247,451
Cash and cash equivalents 16
140,302
711,613
3,668,
928
2,959,064
Total assets
3,6
70
,
412
2,960,457
Equity and liabilities
Equity
Share capital 17
(82,046)
(69,049)
Share premium
(4,719,622)
(3,395,168)
Equity reserve
(719,440)
(10,258)
Retained earnings
2,109,931
844,250
Total equity
(
3
,
411
,
177
)
(2,630,225)
Current liabilities
Trade and other payables 21
(
99
,
235
)
(111,640)
Loans and borrowings 19
(160,000)
(218,592)
(
259
,
235
)
(330,232)
Total equity and liabilities
(3,6
70
,
412
)
(2,960,457)
The Company's loss for the year was £1,289,345 (2022: - £680,190).
The financial statements were approved and authorised for issued by the Board on June 13, 2024 and signed on
its behalf by:
James Peter Knowles - Executive Chairman
Director
82
First Class Metals Plc
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
| Foreign currency | Retained | |||||
| Share capital | Share premium | Equity reserve | translation | earnings | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| At 1 January 2022 | ( | |||||
| Loss for the year | ( | ( | ||||
| Other comprehensive income | ||||||
| Total comprehensive income | ( | ( | ||||
New share capital subscribed | ||||||
| Other equity reserve movements | ||||||
| At 31 December 2022 | ( | |||||
| Foreign currency | Retained | |||||
| Share capital | Share premium | Equity reserve | translation | earnings | Total equity | |
| £ | £ | £ | £ | £ | £ | |
| At 1 January 2023 | ( | |||||
| Loss for the year | ( | ( | ||||
| Other comprehensive income | ||||||
| Total comprehensive income | ( | ( | ||||
New share capital subscribed | ||||||
| Shares to be issued | ||||||
| Other equity reserve movements | ||||||
| Transfer | ( | |||||
| At 31 December 2023 | ( | |||||
| James Knowles and Ayub Bodi have loaned the company |
This has been reflected in the equity reserve.
83
First Class Metals Plc
Company Statement of Changes in Equity for the Year Ended 31 December 2023
Share capital
£
Share premium
£
Equity reserve
£
Retained
earnings
£
Total
£
At 1 January 2022
943
1,536,947
-
(164,060)
1,373,830
Loss for the year
-
-
-
(680,190)
(680,190)
Total comprehensive income
-
-
-
(680,190)
(680,190)
New share capital subscribed
68,106
1,858,221
-
-
1,926,327
Other equity reserve movements
-
-
10,258
-
10,258
At 31 December 2022
69,049
3,395,168
10,258
(844,250)
2,630,225
Share capital
£
Share premium
£
Equity reserve
£
Retained
earnings
£
Total
£
At 1 January 2023
69,049
3,395,168
10,258
(844,250)
2,630,225
Loss for the year
-
-
-
(1,289,345)
(1,289,345)
Total comprehensive income
-
-
-
(1,289,345)
(1,289,345)
New share capital subscribed
12,997
1,324,454
-
-
1,337,451
Shares to be issued
-
-
719,440
-
719,440
Other equity reserve movements
-
-
13,406
-
13,406
Transfer
-
-
(23,664)
23,664
-
At 31 December 2023
82,046
4,719,622
719,440
(2,109,931)
3
,
411
,
177
James Knowles and Ayub Bodi have loaned the company 5,995,332 and 5,995,331 shares respectively to be returned on the publication of prospectus or when headroom allows.
This has been reflected in the equity reserve.
84
First Class Metals Plc
Consolidated Statement of Cash Flows for the Year Ended 31 December 2023
Note
| 31 December | 31 December | ||
| 2023 | 2022 | ||
| £ | £ | ||
| Cash flows from operating activities | |||
| Loss for the year | ( | ( | |
| Adjustments to cash flows from non-cash items | |||
Depreciation and amortisation | 5 | ||
Impairment losses | 5 | ||
Foreign exchange loss/(gain) | 5 | ( | |
Finance income | 6 | ( | ( |
Finance costs | 6 | ||
( | ( | ||
| Working capital adjustments | |||
Increase in trade and other receivables | 15 | ( | ( |
Increase in trade and other payables | 21 | ||
Net cash flow from operating activities | ( | ( | |
| Cash flows from investing activities | |||
Interest received | 6 | ||
| Acquisitions of property plant and equipment | ( | ( | |
Acquisition of mineral property exploration and evaluation | 12 | ( | ( |
Net cash flows from investing activities | ( | ( | |
| Cash flows from financing activities | |||
Interest paid | 6 | ( | |
| Proceeds from issue of ordinary shares, net of issue costs | |||
| Proceeds from other borrowing draw downs | |||
| Repayment of other borrowing | ( | ( | |
| Financing of shares loaned by directors | |||
| Finance cost of financial instruments | ( | ||
| Foreign exchange gains or losses | ( | ||
Net cash flows from financing activities | |||
Net (decrease)/increase in cash and cash equivalents | ( | ||
| Cash and cash equivalents at 1 January | |||
| Effect of exchange rate fluctuations on cash held | ( | ||
| Cash and cash equivalents at 31 December |
85
First Class Metals Plc
Company Statement of Cash Flows for the Year Ended 31 December 2023
Note
31 December
2023
£
31 December
2022
£
Cash flows from operating activities
Loss for the year
(1,289,345)
(680,190)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 5
532
162
Foreign exchange loss 5
389
-
Finance income 6
(5,004)
(461)
Finance costs 6
110,765
7,918
(1,182,663)
(672,571)
Working capital adjustments
Increase in trade and other receivables 15
(1,280,546)
(1,047,919)
Increase in trade and other payables 21
2,760
8,390
Net cash flow from operating activities
(
2
,
460
,
449)
(1,712,100)
Cash flows from investing activities
Interest received 6
5,004
461
Acquisitions of property plant and equipment
(624)
(974)
Net cash flows from investing activities
4,380
(513)
Cash flows from financing activities
Interest paid
(
18
)
-
Proceeds from issue of ordinary shares, net of issue costs
1,337,451
1,593,549
Proceeds from other borrowing draw downs
450,000
587,180
Repayment of other borrowing
(517,143)
(23,747)
Financing of shares loaned by directors
725,602
-
Finance cost of financial instruments
(110,746)
-
Foreign exchange gains or losses
(388)
-
Net cash flows from financing activities
1,884
,
758
2,156,982
Net (decrease)/increase in cash and cash equivalents
(571,311)
444,369
Cash and cash equivalents at 1 January
711,613
267,244
Cash and cash equivalents at 31 December
(
140,302
)
711,613
86
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023
87
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
88
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
89
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
90
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
91
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
92
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
93
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
94
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
95
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
-
-
96
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
97
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
98
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
99
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
100
101
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
102
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
103
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
104
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
105
First Class Metals Plc
Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)
25 Related party transactions
Parties are considered to be related if one party has the ability (directly or indirectly) to control the other party or
exercise significant influence over the other party in making financial and operating decisions. Parties are also
considered related if they are subject to common control or common significant influence. Related parties may be
individuals or corporate entities.
Group
The Group has taken advantage of the exemption available under IAS 24 “Related Party Disclosures” not to
disclose details of transactions between Group undertakings which are eliminated on consolidation.
Company
Funds are transferred within the Group dependent on the operational needs of individual companies and the
Directors do not consider it meaningful to set out the gross amounts of transfers between companies.
First Class Metals Plc
Independent auditor’s report to the members of First Class Metals Plc
106
Opinion
We have audited the financial statements of First Class Metals Plc (the ‘parent Company)’ and its subsidiary (the
‘Group’) for the year ended 31 December 2023 which comprise Consolidated Income Statement, Consolidated
Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes
in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows, Company Statement
of Cash Flows and notes to the financial statements, including significant accounting policies. The financial
reporting framework that has been applied in the preparation of the group and company financial statements is
applicable law and UK adopted international accounting standards.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s
affairs as at 31 December 2023 and of the group’s loss for the year then ended;
• the Group and parent Company financial statements have been properly prepared in accordance with UK
adopted international accounting standards; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Our audit opinion is consistent with our additional report to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the auditor Responsibilities for the Audit
of the Financial Statements section of our report. We are independent of the Group and the parent Company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Our approach to the audit
The scope of our audit was the audit of the Group and parent Company for the year ended 31 December 2023.
The audit was scoped by obtaining an understanding of the Group and parent Company and their environment,
including the Group and parent Company's system of internal control and assessing the risks of material
misstatement.
Audit work to respond to the assessed risks was planned and performed directly by the engagement team which
performed full scope audit procedures.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
First Class Metals Plc
Independent auditor’s report to the members of First Class Metals Plc
107
Key Audit Matters
How our scope addressed this matter
Exploration and Evaluation assets
The Group’s accounting policy in respect of its
exploration and evaluation assets (“E&E assets”)
is set out under “mineral property exploration
and evaluation costs” and its accounting policy
in respect of impairment is set out under
“impairment of intangible assets” in Note 2 to the
financial statements.
Management have assessed the E&E assets for
impairment indicators under IFRS6 and
concluded that other than in respect of the Sugar
Cube site no triggers existed at the year-end.
Determining whether impairment indicators
exist involves significant judgement by
management, including considering specific
impairment indicators prescribed in IFRS 6.
There is a risk that if unidentified impairment
indicators exist, the carrying value of E&E assets
may not be fully recoverable.
We have evaluated whether, under IFRS 6 Exploration for and
Evaluation of Mineral Assets, the assets are appropriately
determined as E&E assets.
We have reviewed and challenged management’s assessment
with respect to indicators of impairment under IFRS 6.
We have evaluated whether the relevant disclosures in the
financial statements are reasonable.
Our conclusion
We are satisfied that expenditure capitalised as E&E assets
meet the requirements of IFRS 6 and that management have
adequately considered the indicators which could give rise to
an impairment charge in their assessment of the carrying value
of those assets.
Going Concern
We draw attention to note 2 in the financial
statements, which indicates that the Group is
dependent on successful fundraising to continue
as a going concern. Additionally, the Group has
a cash balance at the date of approval of the
financial statements that would not be able to
support its operations and overheads for the
following twelve months.
As stated in Note 2, these events or conditions,
along with the other matters as set out in Note 2,
indicate that a material uncertainty exists that
may cast significant doubt on the Group and
parent Company’s ability to continue as a going
concern.
Our evaluation of the directors’ assessment of the Group’s and
parent Company’s ability to continue to adopt the going
concern basis of accounting included:
Reviewing management’s assessment and financial
forecasts for the next twelve months and discussing these
with the Board.
Discussing the Board’s strategy to ensure funds are
available to the Group to fund its plans through fund
raising, debt or asset realisation;
Reviewing existing expenditure and overheads;
Reviewing post year end investment activity and fund
raising; and
Reviewing the adequacy of the disclosure within the
financial statements relating to the Directors’ assessment
of the going concern basis of preparation.
Our conclusion
In view of the requirement to raise additional funds there is a
material uncertainty with regard to going concern because
although the directors are confident they can raise adequate
funding that funding has not been agreed.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
First Class Metals Plc
Independent auditor’s report to the members of First Class Metals Plc
108
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality.
We define materiality as the magnitude of misstatement that could reasonably be expected to influence the readers
and the economic decisions of the users of the financial statements. We use materiality to determine the scope of
our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements,
both individually and on the financial statements as a whole.
Materiality for the Group financial statements as a whole was set at £91,000, determined with reference to the
Gross Assets of the Group (2022: £77,000). This was considered an appropriate level of materiality given the
limited trading activity of the Group and the Gross Assets are considered to be of the most interest to the users of
the financial statements at this stage of operations. Performance materiality was set at £68,000, being 75% of
materiality (2022: £48,000). Performance materiality was set at 62.5% in 2022 which was a first year audit. We
report to the Board any corrected or uncorrected misstatements arising exceeding £3,400 (2022: £2,000).
Material uncertainty related to going concern
We draw attention to Note 2 in the accounting policies, concerning the Group’s ability to continue as a going
concern. The matters explained in Note 2 indicate that the Group needs to raise further finance to fund its working
capital needs and development plans. As at the date of approval of these financial statements there are no legally
binding agreements relating to securing the required funds. These events or conditions along with the matters set
forth in Note 2 indicate the existence of a material uncertainty which may cast significant doubt over the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
See also Key audit matters.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ Report.
First Class Metals Plc
Independent auditor’s report to the members of First Class Metals Plc
109
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent Company financial statements and the part of the Directors’ remuneration report to be audited are
not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ responsibilities statement set out on page 75, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the
directors are responsible for assessing the Group’s and parent Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or parent Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is
detailed below.
We evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls) and determined that the principal risks were related
to posting manual journal entries to manipulate financial performance, management bias through judgements and
assumptions in significant accounting estimates and significant one-off or unusual transactions.
Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and
regulations (irregularities) and fraud that are material to the financial statements. Our audit procedures included
but were not limited to:
Discussing with the directors and management their policies and procedures regarding compliance with laws
and regulations;
Communicating identified laws and regulations throughout our engagement team and remaining alert to any
indications of non-compliance throughout our audit; and
Considering the risk of acts by the Group and parent Company which were contrary to applicable laws and
regulations, including fraud.
Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected
or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.
First Class Metals Plc
Independent auditor’s report to the members of First Class Metals Plc
110
There are inherent limitations in the audit procedures described above and the primary responsibility for the
prevention and detection of irregularities including fraud rests with management. As with any audit, there
remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions,
misrepresentations or the override of internal controls.
A further description of our responsibilities is located on the Financial Reporting Council’s website at:
https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
Other matters which we are required to address
We were appointed by the Board on 9 February 2023 to audit the financial statements for the year ended 31
December 2022 and subsequent financial periods. Our total uninterrupted period of engagement is two years,
covering the periods ending 31 December 2022 to 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group and parent
Company and we remain independent of the Group and parent Company in conducting our audit.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's
members, as a body, for our audit work, for this report, or for the opinions we have formed.
Martin Chatten
Senior Statutory Auditor
For and on behalf of Royce Peeling Green Limited Date: ________________
Chartered Accountants
Statutory Auditor The Copper Room
Deva City Office Park
Trinity Way
Manchester M3 7BG
United Kingdom