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Global Energy Metals eyeing district-scale cobalt development opportunity with Mt. Isa Cobalt projects deal

The firm delivered a transformational near 20-fold increase in the firm's Australian land position
Australia map on the globe
The deal would see the firm significantly increase its cobalt footprint in Australia

Global Energy Metals Corp (CVE:GEMC) revealed it has significantly increased its cobalt footprint in Australia as it unveiled a deal to buy the district scale Mt.Isa cobalt projects.

Notably, it delivers a transformational near 20-fold increase in the firm's Australian land position from 135 hectares at Millennium to 2,560 hectares.

READ: Global Energy Metals reaches "significant milestone" as Werner Lake cobalt project deal conditions are met

GEMC has struck a letter of intent (LOI) with Hammer Metals Ltd (Hammer) setting the terms for the strategic acquisition of the Mount Dorothy cobalt project and the Cobalt Ridge project, collectively known as the Mt Isa projects.

"In addition to advancing the Millennium cobalt project, the acquisition of these district-scale cobalt properties to our cobalt portfolio represents an opportunistic and strategic investment ..."said Mitchell Smith, president and chief executive at GEMC.

"Our alliance with Hammer provides greater depth to our exploration efforts in the region and allows for the defining of a new district-scale cobalt camp.

"The need to source non-conflict future supply of cobalt as feed to the growing demand being fuelled by the surge in production of electric vehicles and battery based consumer electronics has become very apparent.

"This building of a cobalt camp in Australia is a step closer to supply diversification that will further unlock and enhance value for our shareholders and strategic downstream partners."

When the transaction is complete, the firm intends to immediately begin exploration to define drilling targets and define a resource.

Notably, there is also "significant upside exploration potential", said the firm, with cobalt-copper mineralisation previously identified but not exploited, with cobalt being the main target.

WATCH: Global Energy Metals looking to significantly grow resource at Millennium property

After due diligence, should GEMC elect to enter into a definitive agreement with Hammer, it would have the exclusive right to acquire a 100% interest.

There are various terms, including when striking a definite deal, it would pay Hammer C$80,000 and issue the equivalent of C$300,000 of common shares.

It would pay a minimum of C$1mln for exploration within the first two years.

Upon completing a NI 43-101 resource report on either of the two projects, GEMC will issue to Hammer the equivalent of C$250,000 in GEMC shares.

Given their expertise in the region, Hammer will manage the programmes and will be granted a services agreement for a period of time no less than 12 months for local engineering, geological services, permitting and environmental services.

Exploration programmes and budget plans to be applied on the Mt. Isa Cobalt projects, however, will be under the guidance of GEMC.

Historical drilling at Mount Dorothy showed 7 metres at 0.14% Cobalt and 2.55% copper, while rock chip sampling at Cobalt Ridge threw up 0.31% Cobalt, 3.63% copper and 1.25g/t (grams per ton) gold.

Shares in GEMC surged 10% to C$0.165 before dropping back to C$0.16. 

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