Fulcrum Metals plc / EPIC: FMET / Market: AIM / Sector: Mining

30 January 2024

Fulcrum Metals plc

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

Fulcrum signs Letter of Intent for Option and Royalty agreement with Global Energy Metals Corporation  

over Saskatchewan uranium projects

Fulcrum Metals plc (LON: FMET), a company focused on mineral exploration and development in Canada, is pleased to announce that Fulcrum Metals (Canada) Ltd, a wholly owned subsidiary of the Group, has  signed a non-binding Letter of Intent (the "LOI") with TSX Venture Exchange listed Global Energy Metals Corporation ("GEMC", or "Global Energy") for an option and royalty agreement over the Company's Saskatchewan uranium properties.

Under the terms of the LOI, Fulcrum will receive, upon the entering into of a definitive agreement, 5 million common shares in GEMC. In addition, a further CAD$1million in cash and shares in GEMC would become payable to Fulcrum should the option agreement (the "Option") be exercised by GEMC in the two-year option period. In return, GEMC would receive, upon exercise of the Option, a 19.9% equity interest in both Fulcrum's owned uranium properties (the "Owned Projects") and the uranium properties for which Fulcrum has options over (the "Optioned Projects") (if and when the options are exercised), consisting of the Charlot-Neely, Fontaine Lake, Snowbird and South Pendleton projects (the "Properties"). In addition, GEMC will receive, upon the entering into of a definitive agreement, a 0.5% royalty on net smelter returns royalty (the "NSR") in the Properties.

The LOI is non-binding and sets out the intention of both parties to enter into a definitive agreement on the terms set out in the LOI, the key terms of which are summarised in this announcement. There can be no guarantee that a definitive agreement in relation to the option and royalty agreement will be entered into nor that the terms will be the same as set out in the LOI and this announcement. Furthermore, there can be no guarantee that the Option will be exercised by GEMC during the two-year option period.

Mitchell Smith (Non-Executive Director of Fulcrum Metals) is the CEO of GEMC and holds c. 6.85 per cent. of the issued share capital of GEMC.

The transaction contemplated above is a "Non-Arms' Length" transaction in accordance with applicable securities legislation of the TSX Venture Exchange ("TSXV"). Mitchell Smith has declared his conflict to the boards of both companies and abstained from voting on the transaction.

LOI, option and NSR agreement highlights

·    Fulcrum will grant to GEMC a 2-year option for a 19.9% interest in Fulcrum's owned and optioned uranium portfolio;

·    In order to exercise the Option, GEMC shall pay to Fulcrum CAD$1million as a combination of cash and GEMC Shares, as agreed to by both parties at that time;

·    Fulcrum to receive, upon signing of a definitive agreement, 5,000,000 GEMC shares at a deemed price of CAD$0.06 a share, representing a 9.9% shareholding in GEMC;

·    GEMC to receive a 0.5% net smelter returns royalty in the Properties;

·    If the Option remains unexercised on the one-year anniversary of entering into a definitive agreement, GEMC shall pay to Fulcrum CAD$50,000 in cash and CAD$125,000 in shares in GEMC, otherwise the Option will lapse;

·    Fulcrum would retain operational control over the Properties;

·    Provides an underlying valuation of the Properties;

·    Provides Fulcrum with exposure to GEMC's portfolio of non-operated, joint venture funded battery metals projects and catalogue of royalties;

·    Marks the collaboration of Fulcrum Metals and GEMC working to explore further monetisation of the Company's uranium properties;

·    GEMC and Fulcrum will negotiate in good faith to settle the terms a definitive agreement within 45 days the signing of the LOI; and

·    Fulcrum intends to retain any shares received in GEMC

Ryan Mee, Chief Executive Office of Fulcrum, commented:

"The letter of intent clearly demonstrates the underlying value Fulcrum has in its uranium portfolio and validates the company's strategy and management's approach so far.

"We have received interest from several companies about the possibility of investing in our uranium projects, either through a joint venture or acquisition.  We believe that the agreement with GEMC is in the best interest of all shareholders as we seek to monetise the uranium assets without diluting shareholders and provides Fulcrum with exposure to GEMC's active battery metal and royalty portfolio.  Importantly this proposed transaction with GEMC would enable Fulcrum to retain operational control of its uranium portfolio.

"I look forward to working with Global Energy to further delineate value for the uranium project portfolio at a time when demand for uranium has been picking up globally as countries focus on transitioning to cleaner sources of energy and updating the market in due course as opportunities are matured."

KEY TERMS OF ACQUISITION

On closing of the transaction, Global Energy will acquire the NSR and a two-year option from Fulcrum to acquire 19.9% of the Owned Projects and a 19.9% interest in the option agreement pertaining to the Optioned Projects. In consideration for the NSR and the two-year option, GEMC will issue, subject to TSXV Exchange approval, five million shares at a deemed price of CAD$0.06 per share to Fulcrum.  In order to exercise the option, GEMC will be required to pay to Fulcrum CAD$1M as a combination of cash and shares, as agreed by both parties at the time, at a minimum deemed issue price (the "Floor Price") equal to not less than the Discounted Market Price (as defined in policies of the TSXV) at the time a definitive agreement is announced by GEMC by way of a news release. 

If the Option remains unexercised on the one-year anniversary of entering into a definitive agreement, Fulcrum is entitled to CAD$50,000 in cash and CAD$125,000 in shares in GEMC at a deemed price per share equal to the Floor Price. Fulcrum will remain as operator of the Properties and will maintain and keep the Properties in good standing.

Should GEMC elect to exercise the Option it will be provided a carried individual interest on each project on expenditures until a NI 43-101 compliant Resource estimate (or other equivalent report) is established. Upon completion of a resource report, GEMC will be responsible pro-rata to keep the projects in good standing upon exercising the Option.  Once GEMC exercises the Option, for each resource delineated in accordance with NI 43-101 on a Property, GEMC will issue to Fulcrum CAD$100,000 in GEMC Shares at a price per share equal to the greater of: (a) the Floor Price; and (b) a 20% premium to Volume Weighted Average Price of GEMC's shares on the TSX for a period of 5 days.  Once a resource report is obtained on each project, GEMC can participate or be diluted down to 2% at which time its position will convert to another 0.5% NSR royalty.

Additional project information

The project portfolio totals over 59k hectares targeting major structures along strike from historic Uranium mines and projects that have attracted significant investment. Discoveries such as the Arrow discovery (4.3m tonnes at 0.83% U308) and Triple R discovery (2.7m tonnes at 1.94% U308) have proved the concept of exploring along structure outside of the Athabasca basin.

Charlot-Neely Lake

·    Totalling 16,372 hectares located in Northern region of the Athabasca Basin along the Black Bay Fault.

·    Covers 20km of the major Black Bay fault structure which is associated within 10km of 14 historic Uranium mines of the established Beaverlodge District.

·    Includes over 16km of historical EM conductors.

·    Several historical uranium showings with grab samples up to 6.22% and trenching samples up to 0.15%.

·    The Property contains vein-hosted uranium mineralisation characteristics of the Beaverlodge area with potential for unconformity-style mineralisation at depth - unconformity deposits are known to be larger and contain higher uranium grades.

·    Extensive radioactivity throughout the property including new radioactive hotspots identified in 2023 located along and near structural lineaments is attributed to shear-hosted and vein-type uranium mineralisation. The presence of off-scale radiation (>65,535 cps), yellow, Uranium-oxide-stained fractures with sub-one percent uranium, and strong hematite alteration is considered typical of structurally - controlled uranium mineralisation.

·    Sampling in 2023 returned numerous anomalous uranium samples including over 5,510ppm Uranium and scintillometer measurements of > 65,535 cps at the historical Peacock showing.

·    Sampling exhibits strong hematite alteration along fracture planes and contain alteration overprinting the original rock enriching the sample in finely disseminated uranium - visible yellow uranium oxides are present. The radioactive zone is spatially associated with a large quartz vein and paragneiss/altered pegmatite veining.

·    Evidence of strong deformation, proximity to a major fault (Long Lake Fault), and strong alteration signatures make this a target location for hydrothermal, vein-type uranium mineralisation.

·    Many high cps samples at locations affected by glacially polished outcrops and/or rock conditions that are not conducive to collection of the target material with hammer and chisel. Below this veneer has potential to be higher in grade.

·    Additional recommended work includes prospecting, EM and Magnetic geophysical surveys, geochemical surveys and geological mapping of key showings to advance the project to drill ready stage.

Fontaine Lake Property

·    Covers 5,987 hectares located in the Grease River area, northeast of Lake Athabasca.

·    Several historical uranium sowings of up to 1.44% uranium along with rare earth samples of up to 4,732ppm TREE, 6,940ppm Niobium and 1,170ppm Tantalum.

·    2023 sampling returned scintillometer readings up to 53,000 cps and 7,130ppm Uranium by laboratory assay.

·    The Property contains known vein-hosted uranium mineralization in addition to anomalously radioactive granites (Alaskite-type) generally characteristic of low-grade high-tonnage deposits, comparable to the geological setting of the Rossing deposit in Namibia.

·    Given the large volume of the radioactive granites on and near the property, these rocks are candidates to explain the strongly elevated uranium values observed in the regional lake sediment sample data.

·    Further work recommendations include prospecting to follow up on unexplored radiometric highs to confirm sources of radioactivity which may be masked by radioactive granites; gridded outcrop sampling over strongly radioactive zones in the granite to determine the potential for Alaskite-type mineralization on the Property; and soil or radon geochemical surveys to help delineate prospective structures related to high grade, vein type mineralisation.

Snowbird Project

·    The project covers 32,836 hectares of the largely underexplored Cora Lake and Legs Lake Shear zones between major NE and SW Snowbird faults and the Black Lake Fault, Northern Saskatchewan.

·    The Black Lake structure can be traced for at least 200km across the entire Athabasca Basin and is associated with Cameco's Centennial deposit (up to 33.9m averaging 8.78% U₃O₈ as reported on the Formation Metals website)

·    The project is on trend with the Historic Nisto uranium Mine and notable projects Fir Island held by Forum Energy, Cree Bay held by F3 Uranium, projects held by Kobald Metals, the Black Lake project held by UEC and recent staking by Dennison Mines.

·    Mining first occurred at the Nisto uranium Mine in 1950-51. In 1959, Haymac Mines restarted mining and shipped 500 tons of high-grade ore to the Lorado Mill at Uranium City, SK. One shipment of 106 tons of ore graded 1.6% U₃O₈ (Source: Saskatchewan Mineral Deposits Index, Mineral Property #1621).

·    Limited historic airborne surveys include uranium airborne anomalies that have not been followed up on.

·    Limited lake sediment surveys identified a number of highly prospective REE targets and limited rock sampling identified the Bompas Lake uranium occurrence suggesting a significantly wide zone of anomalous mineralisation for which the source of the anomalies had not been identified.

South Pendleton project

·    The project covers 4,115 hectares of the Needles Fall shear Zone, south of the Athabasca basin.

·    Underexplored area that is sparsely mapped.

·    Covers 20km of major faulting.

·    Several airborne uranium squared anomalies are within the property that are yet to be followed up on.

·    Radioactive boulders of upto 7.17% U308 to the North.

·    In an area that is seeing substantial investment and development.

Global Energy Metals Corporation information

GEMC currently holds the following portfolio of representative security and royalty interests:

·    100% interest in Element Minerals Australia Pty Ltd ACN 138 488 909, an Australian company that is the 49% beneficial owner of the Millennium Cobalt-Copper-Gold Project and has a 20% beneficial interest in two neighbouring discovery stage exploration-stage cobalt-copper-gold assets, Mt. Dorothy and Cobalt Ridge, all located in Mount Isa, Australia.  GEMC is free-carried as Metal Bank Ltd earns an 80% interest in Millennium. GEMC is also free-carried on Mt. Dorothy and Cobalt Ridge until a Feasibility Study is produced by JV partner Hammer Metals;

·    100% ownership of U.S. Battery Minerals Corp., which holds an 100% interest in two battery mineral projects, the Lovelock Mine and Treasure Box Project located in Nevada, USA; 

·    10% ownership of Narvik Nikel, which holds an 100% interest in the Råna Nickel-Copper-Cobalt project, Norway. Kingsrose Mining has committed and is earning up to an 80% interest by spending $15 million in project expenditures;

·    13,541,000 common shares in Metal Bank Ltd. representing 3.8% interest in the issued and outstanding equity of Metal Bank Ltd., a publicly traded issuer on the Australian Securities Exchange;

·    2,500,000 common shares in High-Tech Metals Ltd. representing 7.6% interest in the issued and outstanding equity of High-Tech Metals Ltd., a publicly traded issuer on the Australian Securities Exchange;

·    1,350,000 common shares in Electric Royalties Ltd., a publicly traded issuer, representing a 1.4% equity interest in the issued and outstanding equity of Electric Royalties Ltd;

·    637,000 common shares in Sceptre Ventures Inc., representing 5.3% interest in the issued and outstanding equity of Sceptre Ventures Inc., a capital pool company on the TSXV.;

·    257,178 common shares in Marquee Resources Ltd. representing 0.06% interest in the issued and outstanding equity of Marquee Resources Ltd., a publicly traded issuer on the Australian Securities Exchange;

·    50% interest in the Monument Peak Copper-Silver project in Idaho, USA;

·    50% interest in the Chance Lake and Amiral projects in Quebec, Canada;

·    1% NSR royalty on the Råna Nickel-Copper-Cobalt project, Norway;

·    1% NSR royalty on the Mount Dorothy project, Australia; and

·    1% NSR royalty on the Cobalt Ridge project, Australia.

For the year ended 30 June 2023, Global Energy incurred a loss for the year of CAD$4,930,776 with net assets of CAD$4,535,354. The loss is attributed to a write down in some project acquisition costs as GEMC has taken a partner approach to project development. As such these costs are not directly incurred and therefore written down.

Technical Glossary

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.

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

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.