First Class Metals [LON: FCM] is a London-listed miner with a very respectable portfolio of projects located in Canada and covering gold, nickel and lithium. In the space available it is not possible to really do enough justice to each of these, so we will be mentioning a few in passing. Prospective investors are encouraged to take a closer look at some of the other projects under exploration.
First Class Metals continues to expand its portfolio of projects, notably picking up Sunbeam, an historic gold mine that was producing between 1898 and 1905. The company plans to expand its knowledge of the mineralisation at Sunbeam, a mine known to have produced between 50-70,000 tonnes of gold at a 13.0 g/t.
Nickel is also a big part of the portfolio: there has been an ongoing drill program over last summer at West Pickle Lake, which is a JV earn-in project with Palladium One. First Class Metals has further prospects in this area which it controls 100% so there is scope here for further wins for the team as it puts it ‘close-ology’ strategy into practice (acquiring claims in proximity to large scale discoveries which may also be producing mines.
Under the terms of the JV with Palladium One, the latter has the option to earn-in to an 80% interest in the claims subject to a three year work program commitment. Work on site has already identified a new high-grade nickel sulphide zone on West Pickle Lake that remains open in multiple directions.
An update was released on West Pickle Lake in February with assay results that included strike length to over 600 metres, and 3.9% Ni and 2.5% Cu.
First Class Metals has a substantial share holding from Power Metal Canada, which owns over 25% of the company. For investors it represents quite a diversified play, across not just gold but also nickel and lithium. Like other quality smaller miners, we think this remains oversold at this point. The gold exposure should prove beneficial medium term, but we also like the presence of intriguing projects like West Pickle Lake which provide that nickel boost.
On the lithium front the company has a project at Zig-Zag, where it completed an earn-in last month. This is located in a proven hard rock lithium district less than 100km from Armstrong in NW Ontario, in the Seymour Lake area. This is a district already proven to be prospective for hard rock, pegmatite-hosted lithium. It is also a mere 10.5km from Green Technology Metals’ Seymour Project as well as several other hard rock lithium properties. Historic grades have been encountered at Zig-Zag of up to 1.68% lithium over 7m, and 0.168% tantalum over 2.54m.With the completion of the earn in at Zig-Zag, First Class Metals is poised to begin actual exploration this summer. Based off our call with management, stripping, trenching and drilling are anticipated imminently. We’d also expect some positive news flow from this resource before the end of the drilling season. This is certainly shaping up to be potentially one of the more interesting projects under the FCM umbrella.
At time of writing shares have been rallying, and while down 11% YTD we think there is scope here for some considerable gains in 2023. We think 18-19p should be eminently achievable as sentiment comes back into gold and battery metals mining.
