First Class Metals has secured an alternative cash offer to replace a funding line from Southport-based 79th Group, which is in administration.
The Lancashire headquartered mining business, which is exploring mineral extraction in Canada, said the new as yet unnamed prospective purchaser is currently undertaking detailed due diligence with the intention to move to binding documentation as soon as possible and that the board is “encouraged by the progress to date”.
Chairman James Knowles said: “Following the withdrawal of the second stage investment from 79th Group earlier this year, it was important for the Board to act decisively. This fundraise provides the financial flexibility to advance our exploration strategy over the coming months, with early summer work aimed at generating meaningful results.”
The business was on the brink of a sale of half its shares to 79th group when its founder was arrested by City of London Police who are investigating a potential fraud.
The Company has also confirmed it has successfully raised gross proceeds of £520,000 through the issue of 26 million new ordinary shares of 0.1p each at a price of 2p per share, representing a discount of approximately 7% to the closing mid-market price of 2.15p on 4 June 2025.
The placing of 25,000,000 new ordinary shares raising £500,000 via Clear Capital Markets Limited their placing agent, with the shares placed with institutional and high net worth investors, and a private subscription of £20,000 by Non-Executive Director Marc Bamber for 1,000,000 new ordinary shares.
The proceeds will strengthen the Company’s working capital position and enable further exploration work across its portfolio. This includes targeted programmes in the early part of the summer focused on refining and defining key targets, which are expected to lead to more invasive fieldwork and drilling in the latter part of the season.
Marc Sale, CEO of First Class Metals, commented: “This potential transaction is not only a strong endorsement of the underlying value in our portfolio, but also as it’s a significant cash deal has the probability to be transformational for the Company. We are confident this is a pivotal moment for First Class Metals as we move decisively to unlock that value for shareholders.”
On 30 April TheBusinessDesk.com reported that 79th Group appointed Quantuma as administrators after a major fraud investigation was launched into its activities by the City of London Police.
The 79th Group, which operated from Southport Business Park, offered high yield loan notes to investors which promise a high interest return over a fixed period.
The business, operated in real estate and also claimed to specialise in the acquisition, management and development of lucrative assets.
According to its annual financial report First Class Metals had a Market Capitalisation of £1.713m at 31st December 2024.
In May, in response to a query from TheBusinessDesk.com, James Knowles, CEO of First Class Metals, said: “Neither First Class Metals nor any of its officers have been contacted by the City of London Police in connection with any investigation.
“The equity investment by Seventy Ninth Group in First Class Metals is a matter of public record. FCM is a separate, independent, publicly listed entity. Our position on this matter has been clearly stated in our public disclosures, which remain accurate and up to date.”
In January First Class Metals described a deal to secure a conditional £2.18m investment The 79th Group as “a pivotal moment” which would provide the financial backing to accelerate its ambitious exploration programme in the mineral-rich Hemlo-Schreiber Greenstone Belt in Ontario, Canada.
Throughout the second half of 2024, First Class Metals’ partnership with 79th Group deepened: by December, after further due diligence and discussions, the initial loan facility was increased to £500,000 in October and to £700,000 by year-end.
These funds were described as “instrumental in fully funding our winter 2024/25 exploration programme” which included geophysical surveys and expanded geochemical sampling at mining sites.
In December 2024, a proposed strategic equity investment by 79th Group would have seen it would acquire approximately a 51.2% equity stake in FCM through a staged investment totalling around £2.18 million, which enabled the full repayment of all outstanding debt previously owed by the company.
David Webster, one of the founders of 79th Group, was appointed as a non executive director of First Class Metals on the 3rd March 2025 but resigned by the 31st of March.
In its annual financial statement the First Class Metals board said: “Whilst 79th Group denies any wrongdoing, the Board has taken a prudent and measured approach in light of these developments.
“We continue to monitor the situation carefully and will assess any further steps in line with our governance standards and the long-term interests of shareholders. At the time of writing, there are no outstanding loans and the company remains focused on advancing its exploration plans independently, with a clear commitment to maintaining stability and discipline in its operation.”
First Class Metals will be holding its Annual General Meeting at its offices in Ribchester on the 9th of June 2025.
