Fulcrum Metals plc has signed a non-binding US$20 million (£15m) royalty financing term sheet and a £200,000 subscription with Chancery Royalty Ltd for its Teck-Hughes tailings project in Ontario, Canada.
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Under the proposals, Chancery receives a 5% net smelter royalty over Teck-Hughes gold production while Fulcrum retains the right to repurchase 2% of the royalty for US$10m.
Chancery will also make a £200,000 subscription for 2,352,942 new ordinary shares, at 8.5p per share in Fulcrum, equal to 1.5% of the enlarged share capital.
The investor has also received warrants over a further 2,352,942 ordinary shares, exercisable at 11 pence per share, for a period of two years.
The proposed funding will progress Teck-Hughes towards commercial production, subject to successful pilot-scale testing, technical studies and permitting.
Fulcrum said that definitive agreements were subject to successful pilot-scale testing and usual conditions.
Chief executive officer Ryan Mee added: “We see Chancery as an ambitious and growth-oriented royalty company and welcome them as a shareholder and a potential long-term funding partner.
“Fulcrum is creating a scalable mine waste recovery platform, underpinned by the planned deployment of a standalone pilot facility and through exclusive rights to Extrakt [Process Solutions]’s cyanide-free technology across the Timmins and Kirkland Lake mining districts.
“Teck-Hughes, with its initial conceptual production profile of approximately 12,000 ounces of gold per annum, represents the first step in executing that broader strategy.
“As we evaluate potential sites for pilot plant deployment, we believe the combination of our platform approach and growing relationship with Chancery could provide a strong foundation to unlock a wider pipeline of mine waste opportunities to create long-term value together.”