Canadian cobalt developer Global Energy Metals (TSX-V:GEMC) revealed that it has increased the size of its recently-announced $500,000 private fundraise by $250,000 on Wednesday in response to high demand. On Friday, the firm - which is raising the money to support a phase one exploration programme at its two projects near Tesla’s Gigafactory in Nevada - said it will now issue 16,270,000 units to raise a total of $813,500 in the oversubscribed placing.
Each unit distributed in the non-brokered, private placement will comprise one $0.05 share and one three-year warrant exercisable at $0.10. Upon first announcing the raise last week, Global Energy said it had also approved the settlement of up to $181,500 of debt by issuing shares at $0.05 each to certain creditors.
The company, which announced plans to co-list in London earlier this year, will use its placing proceeds to advance its Lovelock and Treasure Box projects ‘immediately’. The two properties are located in Churchill County, around 150km east of the Tesla Gigafactory in Sparks, Nevada. Lovelock covers around 1,400 acres and is said to have produced 500ts of cobalt and nickel mineralisation between 1883 and 1890 when it was last in operation. Global Energy believes exploration work and modern drilling techniques could unlock a large amount of potential value at the site.
Treasure Box, meanwhile, is adjacent to Lovelock and hosts mine workings from limited copper production, which occurred until early into the 20th century. A historical diamond drill hole at the asset reportedly intersected 1.52pc copper over 85ft, with mineralisation beginning at surface.
Last month, Global Energy announced that it had made its first option payment towards acquiring an 85pc stake in both Lovelock and Treasure Box. It issued 384,627 of its shares to the projects’ current owner Nevada Sunrise and paid $20,000 to the underlying vendor.
Speaking to MiningMaven in February, Global Energy’s chief executive Mitchell Smith said the acquisition gives the business a low-cost entry to an exciting jurisdiction close to the world’s largest battery factory:
‘Some of the grades at these sites are exceptional. Historically, grades were reported as high as 14-15pc cobalt, which is just unheard of. It shows there is a real opportunity in this significant land package covering two past producing mines. Given our proximity to Tesla, this could really provide us with unique access to the growing demand for domestic cobalt supply in the US.’
In its March update, Global Energy also said it is reviewing exploration plans for Lovelock and Treasure Box. It said its first-stage exploration programme would assist it with an ongoing, extensive review and reinterpretation of historical data at both sites.
‘There has been a tremendous amount of attention placed on the US for it to stop being merely a bystander in the global battery arms race and start developing more domestic supplies of battery metals such as cobalt, nickel and copper to supply its homegrown battery factories, including Nevada-based Gigafactory 1,’ said Smith. ‘The Lovelock and Treasure Box projects are prime examples of US-based battery metal projects that are very prospective and strategically located in close proximity to a domestic end-user with a large appetite for the critical materials used in EV and energy storage technology.’
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
The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
Catalyst Information Services Ltd, the owner of MiningMaven.com, owns a position in the stock(s) and/or financial instrument(s) mentioned in the piece.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance