Grant of Exploration Permit and Issue of CLN

Medcaw Investments plc has announced the granting of an Early Exploration Permit for its Eagle Lake Gold Project in Ontario, Canada, a significant regulatory milestone that enables the company to commence exploration activities over the next three years across 95 contiguous mining claims. The permit, issued by the Ontario Ministry of Energy and Mines on March 19, 2026, is a crucial step in the company's proposed reverse takeover (RTO) of 90% of Wedgetail Mining Ltd, which holds the project. The transaction is valued at £4.17 million, comprising £170,000 in cash and £4.0 million in shares, and is contingent upon several conditions, including shareholder approval and an equity fundraise. Additionally, Medcaw has issued £24,000 in unsecured Convertible Loan Notes (CLNs) to an adviser, which will convert into ordinary shares at £0.01 per share upon completion of the RTO.

The Eagle Lake Gold Project, located in the Buchan Bay Area of the District of Kenora, Ontario, spans approximately 1,986 hectares within the Wabigoon Greenstone Belt, a region known for its significant gold mineralisation. Historical drilling between 1982 and 1985 revealed multiple gold-bearing zones, with notable intersections including 3.05 metres at 7.54 g/t gold. Recent sampling in 2025 has returned three samples exceeding 25 g/t gold, further highlighting the project's potential. The granting of the exploration permit is a material de-risking milestone that allows Medcaw to advance its planned exploration programme, which is expected to include systematic early-stage exploration work on the project’s claims.

Medcaw's financial position remains tenuous, with a current market capitalisation of GBP 608,630. The issuance of the CLNs, while providing immediate liquidity, raises concerns regarding dilution risk. Upon conversion, the CLNs will result in the issuance of additional shares, potentially impacting existing shareholders. The conversion price of £0.01 per share is significantly lower than the proposed share price of 1.5 pence for the RTO, indicating a substantial dilution effect. The company’s reliance on external financing to meet the conditions of the RTO, including an equity fundraise, further complicates its financial outlook. Given the current market cap, Medcaw will need to secure sufficient funding to cover not only the cash component of the acquisition but also to support its exploration activities over the next three years.

In terms of valuation, Medcaw's market cap places it in the AIM micro-cap tier, making it essential to compare it with similarly sized gold exploration companies. However, finding direct peers that meet all criteria proves challenging due to the company's unique position. One potential peer is Goliath Resources Limited (TSXV:GOT), which is also focused on gold exploration and operates within a comparable market cap range. Another peer is Goldshore Resources Inc (TSXV:GSHR), which, while slightly larger, operates in the same commodity space. A third peer, although slightly smaller, is Newcore Gold Ltd (TSXV:NCAU), which also focuses on gold exploration. These comparisons highlight the relative valuation metrics that Medcaw must navigate as it seeks to establish its position in the market.

The execution track record of Medcaw is still in its early stages, with the company having only recently announced the RTO and the granting of the exploration permit. The timeline for the completion of the RTO is set for October 31, 2026, which adds a layer of urgency to the company’s activities. The successful completion of the RTO and the subsequent admission to trading on AIM are critical milestones that will determine the company's ability to advance its exploration plans. The management's ability to meet these timelines will be closely scrutinised by investors, particularly given the historical context of mining companies that often face delays and regulatory hurdles.

One specific risk arising from this announcement is the potential for delays in the completion of the RTO and the necessary equity fundraise. The requirement for shareholder approval, along with the completion of due diligence and the execution of a definitive share purchase agreement, introduces uncertainty into the timeline. Furthermore, the temporary suspension of trading in Medcaw's shares pending the publication of an AIM admission document adds to the volatility and risk profile of the investment. Investors will need to monitor these developments closely, as any setbacks could significantly impact the company's operational plans and financial stability.

Looking ahead, the next expected catalyst for Medcaw is the completion of the RTO, which is anticipated to be followed by the initiation of exploration activities at the Eagle Lake Gold Project. The company has indicated that it plans to commence its initial work programme as soon as the RTO is completed, which will be a critical step in demonstrating the project's viability and potential for resource development. The timeline for this catalyst is contingent upon meeting the conditions outlined in the RTO agreement, with a long-stop date set for October 31, 2026.

In conclusion, the announcement of the granting of the exploration permit and the issuance of CLNs represents a moderate step forward for Medcaw Investments plc. While the permit is a significant regulatory milestone that de-risks the project and allows for planned exploration, the company faces substantial challenges related to funding, dilution risk, and execution timelines. The reliance on external financing and the need for shareholder approval for the RTO further complicate the outlook. Overall, this announcement is classified as moderate in terms of materiality, as it does not fundamentally alter the company’s valuation but does provide a clearer path for future exploration efforts.

Key insights

• ●Eagle Lake Gold Project spans 1,986 hectares in Ontario.
• ●Convertible Loan Notes issued will dilute existing shareholders.
• ●RTO completion is required for exploration to commence.

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