Shares in First Class Metals PLC (LSE:FCM, FRA:WN9), the AIM-listed exploration company focused on gold projects in Ontario, Canada, fell 14% to 1.6p on Monday after it announced £650,000 in revised funding to accelerate drilling at its Sunbeam Gold Project.
The decline reflects the dilutive impact of the financing, which converts a portion of existing debt into new equity at 1.52 pence per share.
The funding comes through amended terms to an existing convertible loan note (CLN), a form of debt that can be converted into shares, originally announced in January 2026.
Of the £650,000 total, £250,000 has been immediately converted into new shares.
The remaining £400,000 carries a 45-day prohibition on conversion, with the possibility of a further 45-day extension, giving the company a window to demonstrate exploration progress before further potential dilution.
The trigger for the accelerated fundraise was the observation of visible gold in drill core at the Sunbeam property, an early-stage but significant indicator that gold mineralisation is present at surface-detectable concentrations.
To soften the impact on existing investors, the company is offering participation on identical terms through a so-called WRAP offer arranged by Winterflood, the securities broker, targeting up to an additional £250,000.
James Knowles, executive chairman, said the find reinforced confidence in the project and that the revised structure allowed the company to "move quickly and decisively" at a critical stage.
Proceeds will be directed primarily at follow-on drilling at Sunbeam, with a particular focus on the Pettigrew area, where the company intends to use structural controls identified at a nearby zone called Roy to guide targeting.
Additional work is planned across the company's broader Ontario portfolio, including follow-up surveying of Very Low Frequency (VLF) anomalies at its North Hemlo property, a geophysical technique used to identify subsurface conductors that may indicate mineralisation.
The company also intends to carry out initial prospecting on newly acquired Rare Earth Elements (REE) properties, though no further details on those assets were provided.
The remainder of the proceeds will support general working capital.