Shares in First Class Metals fell to 1.8p, down from 2.13p at the previous close, after the exploration company announced a £1 million convertible loan funding agreement.
The AIM-listed firm said the funds would support drilling at its Sunbeam gold project in Ontario and provide general working capital. The first £350,000 tranche is expected to be drawn shortly, with further tranches available over the next 12 months.
The interest-free loan notes can be converted into shares at 82% of the lowest volume-weighted average price over a recent five-day period. The company also retains the right to redeem the notes early at 125% of face value.
Warrants will be issued alongside each tranche. The first tranche includes 4.8 million warrants exercisable at 2.55p per share, a 20% premium to the day before the deal was signed.
Executive chairman James Knowles said the funding was “a deliberate and strategic step” to ensure the company could advance its projects at the right time, with frozen ground conditions now allowing drilling at Sunbeam.
The company also confirmed it would make a final CAD$100,000 payment to secure full ownership of the Kerrs Gold Property.