Fulcrum interims: pilot and first Teck-Hughes programme funded, but cash cushion over Yorkville debt is thin

Summary

Fulcrum Metals' interim results today say its 2.4 tonnes-per-day cyanide-free pilot and first Teck-Hughes programme are funded from the first £2.5 million Yorkville loan tranche and a £500,000 equity subscription. The first-half loss widened to £647,532 and June cash stood at £2,731,870. The pilot site in the Greater Toronto Area is not yet secured. Most of the operational news was already public: the 78% laboratory gold recovery, the TDI pilot agreement and the conditional US$20 million Chancery royalty term sheet. What the accounts add is detail on the funding. The convertible loan is being repaid monthly and is due within twelve months unless converted. Share issuance continues, most recently at 7 pence.

Key figures

The announcement

• Management says the pilot facility and initial Teck-Hughes programme are funded from the £500,000 equity subscription and the first £2.5 million Yorkville loan tranche. The second £2.5 million tranche is undrawn and needs Yorkville's prior written consent.
• Phase 3 laboratory testing at Teck-Hughes reached 78% gold recovery, a 31% relative improvement on Phase 1, with recoveries of up to 95% silver and 96% tellurium but only about 20% gallium. The 159-hole auger programme reported average grades of 0.63 g/t gold across the roughly 6.5 million-tonne tailings deposit.
• The TDI piloting agreement is signed and certain major long-lead equipment has been ordered since the period end. Talks on a pilot site in the Greater Toronto Area are at a late stage but not completed. The first programme is expected to process about 12 batches of Teck-Hughes material over four weeks.
• Successful pilot testing is a key condition of the non-binding US$20 million Chancery royalty financing, which would buy a 5% net smelter return royalty on future Teck-Hughes gold. The deal is also subject to due diligence and definitive documentation.
• The first-half loss was £647,532 (2025: £375,019), with administrative expenses of £611,044 (2025: £331,565). Cash was £2,731,870 and the convertible loan liability £2,061,348, all due within one year.
• After the period end, Fulcrum raised £250,000 at 7 pence per share and began trading on OTCQB. The Tully resource update triggered further consideration of 15 million Loyalist shares or cash in lieu, and 5,600,000 Terra North shares were received, subject to 12-month escrow.

Against guidance

On the technical side, delivery has beaten earlier targets. In September 2024 the company said it was aiming for gold recovery above 60%, after Phase 1 results of up to 59%. Laboratory testing has now reached 78%. The 2025 conceptual study's sensitivity case assumed 74% recovery, so laboratory results now exceed that assumption, but they are not yet proven at pilot scale. On funding, the statement that the pilot is funded is new, but it comes without an itemised pilot budget, a commissioning date or the monthly Yorkville repayment schedule. The directors report no material going-concern uncertainty, compared with material uncertainties in the 2023 and 2024 accounts.

What to watch

• Signed Ontario site arrangements, a commissioning timetable, and a costed cash bridge showing the pilot funded after Yorkville repayments without the second tranche.
• Any use of the at-the-market facility, any placing below 7p, or a request to draw the second Yorkville tranche. Each would suggest the funding is tighter than stated.
• First pilot batches: whether gold recovery holds near laboratory levels and what throughput and unit costs are disclosed. These results then feed into the Teck-Hughes 43-101 resource estimate and any definitive Chancery agreement.
• Receipt of the 15 million Loyalist shares or cash in lieu. The Tully resource is cited as about 226,000 ounces in today's results against about 265,000 ounces in the July announcement, a difference worth clarifying.