Introduction

On 14 July 2025, First Class Metals PLC (AIM: FCM) announced a non-binding Memorandum of Understanding with Valereum Plc (AQSE: VLRM) to explore a regulated token model for funding its Ontario exploration projects. According to the RNS, this collaboration represents one of the first serious attempts by a UK-listed resource company to apply project-level tokenisation to mineral exploration. While blockchain-based tokenisation of real-world assets has taken off in areas like fund management and real estate globally, its use in early-stage mining remains largely untested, especially at this scale.

This initiative also underlines how forward-looking the management at First Class Metals PLC is. By pioneering a tokenised funding route, they aim to position the company at the forefront of responsible, transparent exploration finance. Retail investors stand to benefit from clearer insight into exactly what they’re funding and how returns flow, while the plc’s share count stays fixed, protecting existing equity and aligning with the board’s commitment to innovation and shareholder value.

The Players

First Class Metals is a UK-listed minerals exploration and development company operating in northwest Ontario, Canada. It holds 100% ownership of seven claim blocks covering over 180 km² along a 150 km strike of the Hemlo–Schreiber–Dayohessarah greenstone belt, targeting gold, base metals and rare earth element mineralisation. Flagship projects include North Hemlo’s multi-commodity targets, the West Pickle Lake nickel–copper–PGM joint venture, Sunbeam gold, Zigzag lithium–tantalum and Esa rare earths, all advanced through systematic sampling, geophysics and phased drilling programmes.

Exploration to date has been financed via equity placings and occasional debt facilities, including Director loans. While these methods provide reliable funding, they require lengthy regulatory processes, dilute existing shareholders and can delay follow-up work when rapid action on promising results is most crucial.

Valereum is a Gibraltar-based fintech and digital-asset infrastructure provider focused on tokenising real-world assets. It operates technology and marketplace platforms, offers regulated token issuance with built-in Know your Customer (KYC) and Anti-Money Laundering (AML) compliance, fiat-to-crypto rails and custody services, and advises on token programmes for fund management and fintech clients.

Together, the two companies plan to establish project-specific special purpose vehicles and issue compliant digital tokens to fund a portion of development costs. This hybrid model aims to accelerate capital raises, broaden access for global investors, enhance transparency through on-chain reporting and preserve the parent company’s equity base, all within an ESG-aligned framework.

What Is Tokenisation?

Tokenisation, in this context, refers to the creation of digital tokens on a blockchain that represent a specific economic interest in a real-world asset, in this case, a mining exploration project. These tokens are issued by a special-purpose vehicle (SPV) set up to hold and manage a single project. Unlike traditional company shares, which give holders general ownership of the entire business, these tokens are tied to one defined project and its associated revenues or eventual sale proceeds. They can be securely bought, held or traded on a regulated digital platform, giving investors direct exposure to the performance of that asset.

This structure allows companies to raise capital for individual projects without issuing new shares or diluting ownership at the plc level. For investors, it offers clarity and control: the ability to back specific mineral projects with full transparency, knowing exactly where their funds are allocated and how returns will be generated. Token holders benefit from blockchain’s built-in efficiency and traceability, while companies gain access to faster, more flexible funding from a broader pool of global investors.

How the MOU Proposes to Work

According to the Memorandum of Understanding, First Class Metals will identify one or more exploration projects to be transferred into separate special-purpose vehicles (SPVs). Each SPV will serve as a standalone entity dedicated to a single asset. Valereum will then support the issuance of fully compliant digital tokens from these SPVs, using its regulated infrastructure to ensure KYC and AML requirements are met before any tokens are offered to investors.

The tokens will be sold to raise part of the funding needed to progress exploration activities, such as drilling, sampling and technical studies, without requiring First Class Metals to issue new plc shares. This approach ring-fences funding at the project level, giving token holders direct exposure to the potential success and returns of that specific asset. Meanwhile, the company retains a controlling interest in the SPV, allowing it to benefit from any long-term upside, all while preserving shareholder value and maintaining strategic control.

Investor Mechanics and Non-Dilutive Funding

Token investors will receive a contractual right to share in the revenues generated by a specific SPV. This could include income from ore sales, proceeds from a joint-venture agreement, or profits from an eventual asset sale. The key distinction is that these tokens are issued at the project level, not by the parent company. As a result, the capital raised through token sales does not require issuing new shares in First Class Metals, meaning existing shareholders retain their full ownership percentage in the plc.

Once token holders have received their agreed return, typically capped at a predefined multiple of their original investment, any remaining profits from the project flow back to the plc through its retained stake in the SPV. This creates a scenario where successful exploration not only delivers returns to token investors but also enhances the net asset value of First Class Metals itself, all without shareholder dilution. For retail investors, this structure offers the potential for both project-specific returns and a stronger overall company valuation.

A Hypothetical Case Study

Imagine First Class Metals selects its Zigzag project, which targets lithium and tantalum, for tokenised funding. The company establishes a special-purpose vehicle (SPV) for Zigzag and issues $2 million worth of compliant digital tokens through Valereum’s infrastructure. These tokens represent a capped right to a share of future revenues from the Zigzag project, such as from an eventual offtake deal or a joint venture agreement.

Token holders receive their investment back plus an agreed return, let’s say 2×, from the SPV's future income. Once this return is met, any additional profits from Zigzag flow back to First Class Metals, which retains a majority stake in the SPV. The plc hasn’t issued a single new share, meaning existing shareholders keep full ownership. Meanwhile, the funds raised accelerate drilling, technical studies, and potential resource definition, boosting the value of both the project and the company.

Why It Matters

This collaboration marks a potential turning point in how early-stage mineral exploration is financed. For retail investors, it offers direct access to specific projects with greater transparency on how their funds are allocated and how returns are generated. Because the funding is executed through tokenised SPVs rather than share placings, capital can be raised more efficiently, often in days rather than months, thanks to automated KYC processes and digital settlement infrastructure. Investors no longer need to rely solely on diluted plc equity to gain exposure to high-risk, high-reward exploration assets.

Importantly, the token structure can be designed to reflect modern ESG principles, embedding environmental and social safeguards into the investment model. This aligns with broader shifts in global capital markets, where responsible finance is increasingly prioritised. With the real-world asset tokenisation market forecast to exceed (US$16 trillion) by 2030, early engagement with such models offers retail investors not just potential financial upside, but a chance to participate in the next phase of digital transformation in resource funding.

Potential Risks and Considerations

While the MOU represents an exciting step forward, it is important to note that it is non-binding and exploratory in nature. There is no guarantee that a tokenisation programme will ultimately proceed, and if it does, its structure and execution may evolve over time. Regulatory approvals, technical integration, and investor uptake are all potential hurdles. As with any blockchain-based initiative, compliance and legal clarity will be critical, particularly when dealing with real-world assets and cross-border funding flows.

It’s also worth remembering that exploration remains a high-risk sector. Even with funding secured, drilling programmes may not deliver economic results, timelines can slip, and commodity price movements can quickly shift project economics. Retail investors should assess any token offering with the same scrutiny they would apply to traditional investments—paying close attention to return caps, governance structures, and the allocation of risk. Further, despite its interest in tokenisation, First Class Metals has reaffirmed that it remains fundamentally committed to its core mission: advancing high-potential mineral projects through disciplined, responsible exploration.

Next Steps and What to Watch

In the coming weeks, First Class Metals and Valereum are expected to move from concept to implementation. This will include selecting specific exploration assets for tokenisation, outlining the legal structure of each special purpose vehicle, and detailing the terms of the token offerings. These decisions will define how much capital is raised, what rights and returns token holders receive, and how the overall structure aligns with regulatory frameworks in both the UK and Gibraltar. Investors should also expect updates on token issuance platforms and how tokenised interests will be traded or accessed.

For retail investors, this is a crucial period to observe. Announcements concerning token tranche sizes, development timelines and partnership updates will provide insight into how the market is responding. Reactions from both the traditional mining sector and the blockchain community will help gauge demand for this hybrid model. Investors should watch closely for regulatory disclosures, investor presentations, and any early indicators of deal structure. The way these pilots unfold will shape how scalable and repeatable this model could become, not just for First Class Metals, but across the small-cap exploration space.

Conclusion

This MOU between First Class Metals and Valereum represents a bold step into a new era of resource funding. By combining real-world exploration with blockchain-based financial infrastructure, the two companies are aiming to pioneer a faster, more transparent and non-dilutive funding route. If successful, this model could serve as a blueprint for how junior mining companies raise capital in the years ahead, preserving equity while broadening access to a new generation of digitally, native investors.

For retail participants, understanding this framework early may offer more than just an investment opportunity, it may offer a front-row seat to one of the most innovative shifts in resource finance. With ESG, digital assets, and real-world tokenisation converging, this collaboration puts First Class Metals at the forefront of a potentially transformative funding revolution, while staying grounded in its core mission: responsible, discovery-led mineral exploration.