Chancery Royalty has signed a non-binding term sheet to provide $20m (£14.93m) in royalty financing to Fulcrum Metals, as part of a move to expand its presence in cyanide-free gold recovery from historic mine tailings in Ontario, Canada.
The proposed agreement includes a 5% net smelter return royalty (NSR) on gold production from Fulcrum’s Teck-Hughes project in Kirkland Lake.
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Fulcrum would be able to repurchase 2% of the royalty for $10m under the terms outlined.
Alongside the royalty financing, Chancery Royalty has agreed to a strategic equity investment of £200,000 in Fulcrum Metals at 8.5p per share.
The investment and royalty agreement remain subject to definitive documentation, successful pilot-scale testing of the cyanide-free technology, and other conditions.
Chancery Royalty CEO Jeremy Gray said: “Fulcrum is strategically positioned to deliver both the near-term production and the long-term growth Chancery looks for in a partner. Its innovative, cyanide-free approach to metal recovery and commitment to environmental remediation fit our differentiated platform for sustainable growth.”
Fulcrum is building a separate pilot plant in Toronto to test a cyanide-free process for extracting gold and critical minerals from mine waste.
The pilot is intended to demonstrate how the approach could operate at commercial scale and be replicated across other tailings sites and through partnerships with third parties.
Fulcrum Metals CEO Ryan Mee said: “We see Chancery as an ambitious and growth-oriented royalty company and welcome them as a shareholder and a potential long-term funding partner. The proposed royalty financing provides a framework to advance Teck-Hughes from pilot-scale validation towards commercial production.”
Chancery Royalty indicated that the transaction provides an opportunity for exposure to Fulcrum’s project and its broader mine-waste recovery platform.
The deal structure also gives Chancery a right of first refusal over royalties arising from other mine waste projects across Fulcrum’s Kirkland Lake portfolio for two years.
Chancery Royalty is based in Bermuda and holds four producing and near-producing gold and silver royalties in the US, Brazil, Canada and Finland, with an additional agreement in Ethiopia.
The company has forecast an increase in gold equivalent ounces from around 4,000 in 2027 to more than 28,000 within four years.
