Toronto-listed Global Energy Metals (TSXC:GEMC) has reached an agreement to acquire two cobalt projects based just c.150km east of Tesla’s Gigafactory in Nevada. The firm now has the option to take an 85pc position in the highly prospective Lovelock cobalt mine and Treasure Box project in Churchill County. The transaction with local firm Nevada Sunrise is now subject to the acceptance of the TSX Venture Exchange.
The final terms of the deal have changed since the signing of a letter of intent back in September. For example, Global Energy was originally due to take an 80pc position in the projects rather than 85pc. Furthermore, required exploration payments have been cut considerably from $2.5m to $1m. Global Energy must meet this obligation within three years of its option being exercised.
To acquire its stakes, Global Energy must issue $200,000 worth of its shares to Nevada Sunrise. These will be priced at the greater of $0.15 or the volume weighted average of the closing price of Global Energy’s shares for the 20 trading days immediately before executing the option. Global Energy will also have to make a $75,000 cash payment and several additional share transfers to Nevada at predetermined dates over the next two years.
The two projects produced a limited amount of high-grade cobalt, nickel and copper in the 1880s. According to Global Energy, the average grades of a 200-tonne shipment in 1886 came in at an impressive 14pc cobalt and 12pc nickel. However, the projects and their surrounding areas are yet to be thoroughly explored using modern drilling techniques.
Churchill County hosts excellent infrastructure and several copper-gold projects. It also shows strong enrichment in cobalt, nickel and copper. Global Energy said this makes the region very attractive for further exploration and expansion through other attractive growth opportunities. The business has already identified eight diamond drill targets and has carried out geological mapping, chip and channel sampling, and geophysics.
Lovelock and Treasure Box location map
Speaking to Mining Maven, Global Energy’s chief executive said he was ‘happy to report’ that the firm has secured the definitive agreement.
‘I am also excited to reveal that we were able to secure better terms and a slightly larger stake than originally drafted in our letter of intent,’ he added. ‘The acquisition of the Nevada cobalt projects is another significant milestone for GEMC. This transaction exposes the Company and its shareholders to a wealth of exploration opportunities in another top-tier mining district with proven mineral endowment. GEMC believes that the sizeable property package it has locked up in the heart of a very prolific and proven district, hosts the potential for significant cobalt exploration upside.’
Global Energy focuses on offering security of supply of cobalt, which is a critical material in the rapidly growing rechargeable battery market. It is building a diversified global portfolio of assets in the sector, including project stakes, projects and other supply sources.
The business’s flagship asset is the Millennium Project in the world-renowned Mt. Isa region of Queensland, Australia. It executed the final agreements to take a 100pc interest in the project in November.
Millennium is a multi-zone, near-surface cobalt-copper sulphide system with several kilometres of potential strike length. It is located near established mining, transport, and processing infrastructure and offers easy access to a very skilled workforce.
The growth-stage site contains a defined zone of cobalt-copper mineralisation. Here, a 2016 JORC Resource estimate identified 3.1MMts of inferred resources containing 0.14pc cobalt and 0.34pc copper with gold credits.
Global Energy is now looking at ways to increase the size of its deposit. Results from a first phase exploration campaign at two zones called Millennium North and Millennium South exceeded grade and thickness expectations. The firm will now carry out a second phase of drilling to examine both areas further.
Alongside Millennium, Global Energy has acquired two further discovery sites called Mt. Dorothy and Cobalt Ridge. These are collectively known as the ‘Mt. Isa projects’. The areas expand Global Energy’s Australian land position by nearly twenty times but have yet to be exploited. Exploration to date has returned high-grade cobalt intercepts at both, allowing Global Energy to line up numerous targets for further investigation and test work to define a resource.
Finally, the business currently owns 70pc of the Werner Lake cobalt mine in Ontario Canada. It joint venture partner Marquee Resources is enjoying much success in its ongoing exploration campaign at the asset.
Author: Daniel Flynn
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