First Class Metals shares fell on Friday after completing a discounted placing to fund working capital and exploration activities.
Earlier this year, we wrote that, despite the attractiveness of First Class Metal’s assets, they were in danger of having to raise funds again in 2024, and the placing level could well be beneath 3p. That article can be read here.
First Class Metals has now completed two placings beneath 3p in just two weeks, and the amounts are far less than the placings in 2023, which raised £600,000 and £1,000,000.
Today’s placing raised gross proceeds of £256,500 at 2.7p, a 16% discount to yesterday’s closing price. The prior placing 17 July raised £85,000 at 2.8p.
The funds will be allocated to the ongoing ‘potentially significant impact exploration programme’ at the Hemlo gold project’s Dead Otter Trend North. Helmo is First Class Metal’s flagship project.
“In light of the recent announcements regarding the high priority status of the Dead Otter Trend, it was considered wise to take advantage of the crews and equipment already mobilised at the site to increase both the number and scope of stripping sites,” said James Knowles, FCM’s Executive Chairman.
“We believe that the Dead Otter project holds transformative potential for FCM’s future, and completing this capital raise promptly will allow significant additional work this summer, thus enhancing our understanding of the geology and the target’s true potential.”
With FCM shares now down 52% year-to-date, shareholders will certainly hope the recent fundraises can facilitate material progress over the summer.