Option to Acquire Gold Tailings Project

Fulcrum Metals PLC

30 November 2023

 

30 November 2023

Fulcrum Metals plc

("Fulcrum" or the "Company" or the "Group")

Option to Acquire Teck-Hughes Gold Tailings Project

 Enters Advanced Discussions with Extrakt to Licence its Sustainable Gold Leaching Technology

Fulcrum Metals plc (LON: FMET), a company focused on mineral exploration and development in Canada, is pleased to announce that its wholly owned subsidiary Fulcrum Metals (Canada) Ltd ("FMCL") has entered into an option agreement ("the Mining Option Agreement") to acquire a 100% interest in the Teck Hughes Gold Tailings project ("Teck-Hughes"), located in Kirkland Lake, Ontario, Canada.

In addition, the Company also announces that, in parallel with the Mining Option Agreement, it is in advanced discussions with Extrakt Process Solutions ("Extrakt"), regarding the licensing of its proprietary technology.  Extrakt is a sustainable technology company using separation technology to extract metals from tailings without the use of cyanide.

Highlights

·    Option to acquire 100% of the Teck-Hughes Gold Tailings Project - the mine itself has historically milled 9,565,302 tons of ore and produced 3,700,007 ounces of gold.

·    Historic sampling and auger drilling campaigns were conducted at the project, the first in 1980 and the most recent between 2018 and 2022 which produced a non-complaint resource estimation.

o  As part of the most recent campaign a total of 95 auger samples were collected and assayed at Actlabs in Timmins. The highest sample assayed 1.23g/ton Au with 72 of the 95 samples assaying between 0.5 to 0.8 g/t Au, the average being 0.66g/ton Au.

o  Based on the data from this sampling along with that of the drill program from 1980 an estimate of the tonnage was calculated over the north, west and northeast arm of the tailings totalling 6,531,300 tons of material at 0.66g/ton Au for 138,460 ounces contained Au.

·    The Company is in advanced discussions with Extrakt for the use of its proven non-cyanide gold leaching tailings extraction technology.

·    Testing of tailing material from Teck-Hughes, using Extrakt's technology, is scheduled for Q1 2024.

·    This represents an opportunity for Fulcrum to utilise proven tailings extraction technology with the potential to deliver a cash generative metals project.

Ryan Mee, Chief Executive Office of Fulcrum Metals plc, commented:

"This is a very exciting development at Fulcrum and an excellent opportunity for shareholders to gain exposure to a project that has the potential to be generating cashflow in the future, without the precursor mining stage saving not only time but capital.

"Our strategic structuring of the tailings project agreement allows Fulcrum to conduct the necessary pre-production work without the upfront commitment of the acquisition cost, which based on the non-compliant resource calculations of 121,700 ounces of gold equates to less than USD$3.30 per ounce of gold. 

"We are also excited about our discussions with Extrakt, whose technology has the potential to have a significant impact on the metals industry. Importantly, the non-use of cyanide makes is pivotal from an operational cost perspective, and even more importantly from an environmental perspective. We look forward to providing shareholders on our progress at Teck-Hughes in due course".

The Teck-Hughes Gold Tailings project is located approximately 1.5 kilometres northwest of the town of Kirkland Lake (figure 1) consisting of 7 mining claims (112 hectares) with non-compliant 43-101 resource calculations of up to 138,460 ounces of gold associated with the historic Teck Hughes gold mine in the Kirkland Lake camp.

Fulcrum Metals is also in discussions with Extrakt to licence efficient and sustainable, separation technology to enhance recoveries of precious metals and dewater the tailings after the process. Fulcrum will update its project process once all sides have finalised the scopes and executed the necessary agreements. William Florman, the CEO of Extrakt, confirmed that the material testing from one of Fulcrum's sites is targeted to be conducted in Q1 2024.

Summary of Acquisition Terms

Mining Option Agreement

Under the terms of the Mining Option Agreement, John Der Weduwen, Larry Gervais and Steve Polson (the "Optionors") grants Fulcrum (the "Optionee") an option to acquire a 100% interest in the Teck-Hughes Tailings Project. In consideration for the grant of the option Fulcrum shall make payments to the Optionors as follows:

·    CDN$15,000 within 10 business days of signing the Mining Option Agreement;

·    CDN$25,000 within 10 business days upon the receipt by Fulcrum of a mineral recovery permit from the Ministry of Mines in Ontario;

·    CDN$250,000 on or before the first anniversary date of the Mining Option Agreement;

·    CDN$250,000 on or before the second anniversary date of the Mining Option Agreement; and

·    the granting of a 3% Net Smelter Return (the "NSR Royalty").

Once the payments above have been made, which at Fulcrum's discretion can be made in full prior to the stated dates, Fulcrum may exercise the option to acquire a 100% interest in the Teck-Hughes Tailings Project.

Fulcrum also has the right to terminate the Mining Option Agreement by giving 30 days notice at any time and as such would not be required to make any further payment.

Buy Back of Royalty

In addition, FMCL has an option to purchase 1.5% of the NSR Royalty (thereby reducing the NSR Royalty rate payable to the Optionors from 3% to 1.5%) for CAD1,500,000, with an additional option to purchase a further 0.5% of the original NSR Royalty (thereby reducing the NSR Royalty rate payable to the Optionors from 1.5% to 1.0%) for a further CAD$1,000,000 at any time or from time to time, after the NSR Royalty has been granted.

Finder's fee agreement

The Company has also entered into a finder's fee agreement in relation to the acquisition whereby the Company will pay the introducer of the Project a finder's fee of CDN$20,000 in stages of CDN$1,000 upon execution of the Mining Option Agreement, CDN$9,000 payable on payment of the first anniversary option amount and CDN$10,000 payable on payment of the second anniversary option amount. The Company has elected to make the first payment instalment in cash but may elect to pay either in cash or shares in Fulcrum for the remaining payments. In the event that the remaining payments are settled through new ordinary shares in Fulcrum  this would be at a price per share based on the ten-day volume weighted average price of shares in Fulcrum Metals prior to exercise.

Background on the Teck-Hughes Tailing Project

The Teck-Hughes Gold Mine milled 9,565,302 tons of ore and produced 3,700,007 ounces of gold during its 51 years of operation from March 1917 to January 1968. The tailings from the milling operation were pumped approximately 2100 metres north into Lost Lake and were later held with wooden dams when the lake was filled to overflowing capacity.

In August of 1980 a nine-hole drill program was conducted by Douglas Parent on behalf of Rene Paiement and associates. The drill holes were centred at 500-foot intervals along a line which ran NNE from the southwest corner of the tailings to the north central portion.

The nine holes returned an average grade of 0.63g/ton Au. The grades were higher in the south and steadily decreased to the north. Mr. Parent suggested the lower grades in the north were due to leaching. It is more likely that the older tailings were deposited in the nearest shore of the lake, hence the higher grades to the south.

In July of 1985 C. Von Hessert commissioned a drill program on five tailings areas in the Kirkland Lake District, one being the Teck-Hughes with drill centres spaced ranging from 400 to 600 feet. Based on these results it was roughly estimated that the Teck-Hughes Tailings project may contain approximately 6,212,000 tons of material grading 0.62 g/ton Au for 121,700 contained gold ounces.

In 2018 and 2019 a total of 85 surface auger samples were taken by Jon Van Der Weduwen. The samples were taken at 50-metre stations along 100-metre line spacing. The samples covered most of the tailings surface except for the extreme NE portion. The average grade of these surface samples was .60g/ton Au.

In 2022 John Van Der Weduwen completed seventeen augur drill holes totalling 108.4 metres ranging in depth from 3.6m to 9.2m, although several holes did not reach the bottom of the tailings due to the collapse of walls of the holes. The holes were centred at stations of a previously established north-south UTM grid where the lines were spaced 100m and stations at 50m. All holes were drilled vertically and sampling starting at the 1-2 metre depth with sampling every metre to depth (data for the first metre was collected during earlier work).

A total of 95 auger samples were collected and assayed at Actlabs in Timmins. The highest sample assayed 1.23g/ton Au with 72 of the 95 samples assaying between 0.5 to 0.8 g/t Au, the average being 0.66g/ton Au. There were no marked anomalies at the lower extent of the holes where the older tailings would be. Based on the data from this sampling along with that of the drill program from 1980 an estimate of the tonnage was calculated over the north, west and northeast arm of the tailings totalling 6,531,300 tons of material at 0.66g/ton Au for 138,460 ounces contained Au.

The various historic non-compliant resource estimates cited above have not been verified by Fulcrum and the tailings body requires detailed follow-up sampling along with appropriate QAQC and estimation by an independent qualified resource geologist in order to be able to report a resource compliant with established resource codes.

Figure 1 - property location

References

i)             Twenty eighth annual report of the Ontario Bureau of Mines, 1919 p. 120-121, Teck Hughes Gold Mines.

ii)            Seventy eighth annual report on mining operations in Ontario, 1968 p. 33-34, Teck Hughes annual report.

iii)           OAFD Assessment record 42A0 1 NE0 194, Report on sampling program completed on the Teck Hughes tailings deposit.

iv)           OAFD Assessment record 32D04NW0806, Appendix B, Calculation of tailings reserves in the Kirkland Lake Area.

Qualified Person Statement

The technical information in this announcement has been reviewed by Edward (Ed) Slowey, BSc, PGeo, technical advisor to Fulcrum Metals Plc. Mr Slowey is a graduate geologist with more than 40 years' relevant experience in mineral exploration and mining and a founder member of the Institute of Geologists of Ireland. Mr Slowey has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which has been undertaken to qualify as a "Qualified Person" in accordance with the AIM Rules Guidance Note for Mining and Oil & Gas Companies. Mr Slowey consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears.

 -Ends-

For further information please visit https://fulcrummetals.com/ or contact:

Fulcrum Metals PLC
Ryan Mee (Chief Executive Officer)	Via St Brides Partners Limited
Allenby Capital Limited (Nominated adviser)
Nick Athanas / George Payne	Tel: [phone]
Clear Capital Markets Limited (Broker)
Bob Roberts	Tel: [phone]
St Brides Partners Ltd (Financial PR)
Ana Ribeiro / Paul Dulieu	Tel: [phone]

Notes to Editors

FULCRUM METALS - BACKGROUND

Fulcrum Metals PLC (LON: FMET) is an AIM quoted exploration company which finances and manages exploration projects focused on Canada, widely recognised as a top mining jurisdiction.

Fulcrum currently holds a beneficial 100% interest in highly prospective gold and base metals projects in Ontario and Uranium projects in Saskatchewan.

Fulcrum's strategy is to focus on discovery and commercialisation of its Projects through targeted exploration programmes. The primary focus is to make an economic discovery on the flagship Schreiber-Hemlo Properties and to establish the prospectivity of its wider Ontario and Saskatchewan portfolio with a view to securing potential joint venture and/or acquisition interest.

The Schreiber - Hemlo properties have a history of prospecting and localised extraction since the late 19th century. However, coherent property-level exploration programmes have been limited or absent, particularly in recent times. Fulcrum has an opportunity to carry out such a programme and this approach provides the best opportunity to fully explore the significant prospectivity of the properties. A recent structural study identified 42 priority exploration targets, of which 24 targets within the Big Bear property and 18 in the Jackfish property, with 14 in total (9 on Big Bear and 5 on Jackfish) being ranked as high priority for follow-up. The properties have the potential to host a large, structurally controlled, stratabound-style banded iron formation (BIF) gold prospect similar to the Musselwhite deposit (McNicoll et al., 2016), in addition to an Archean greenstone, orogenic-style lode gold prospect, extending past the bounds of known historical mineral occurrences.

The Tully property, 458 hectares in area, is located 30 kilometres northeast of Timmins, Ontario and includes the Tully (Timmins North) deposit, which has been the focus of several drilling campaigns since its discovery in 1969. The Tully deposit is located 2 kilometres southwest of the Bradshaw Gold Project of Gowest Gold Ltd., currently in development. The property is accessed by an all-weather gravel road that extends 15 kilometres to the east off of highway 655.

While highly prospective, Fulcrum's mining assets are in the exploration phase, so Fulcrum stands to be able to add significantly to the inherent value through exploration success. Fulcrum will continually review opportunities with potential and with a view to increasing shareholder value. It is the Board's intention to deliver medium and long-term growth and to establish the Group as a significant exploration company.

 

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