The company announced today that it will acquire 100% of the Millennium cobalt property and the neighbouring Mt. Isa cobalt projects after it struck a deal with partner Hammer Metals.
"Ultimately what this does is make us a leading cobalt developer in the region," chief executive officer Mitchell Smith told Proactive Investors. "This is a fantastic asset."
"Hammer is going to work with us to look at other properties in the region, given their technical and jurisdictional expertise."
READ: Global Energy Metals positions itself as leading cobalt explorer in Mt Isa region with acquisition
The metal at play here is cobalt: a silverish-gray metal, is an essential ingredient in lithium-ion batteries that power smartphones as well as plug-in electric vehicles.
And according to Smith, the demand for it will continue.
"Cobalt is here to stay," says Smith adding that while there is some substitution going on, much of it is still a long ways out. "There's a need for diversified supply. The Millennium asset provides opportunities for future supply for downstream partners."
The Millennium asset provided some bright news for the company lately, as it completed phase one drilling with further high-grade cobalt finds.
The project in Queensland covers a sulphide-rich mineralized zone containing cobalt, copper and gold.
Global supply of cobalt is shifting
Globally, much of the world’s cobalt production is produced by the Democratic Republic of Congo (DRC), accounting for more than half the world’s 123,000-ton production in 2016, according to Natural Resources Canada. China and Canada followed, each contributing roughly 6% of supply, followed by Russia and Australia.
But that figure is shifting, and smaller players have a clear opportunity to benefit, particularly in light of the challenging environment of the DRC, which comes with political risks and conflict. In addition to this, Chinese firms dominate the mining industry there.
Eyes are turning to Australia and Canada. For Global Energy Metals, that’s welcome news.
Specifics of the deal
In 2017, Global Energy Metals signed an agreement deal with Hammer Metals, which allowed it to acquire a 75% stake by spending C$2.5mln within three years. In March this year, it had spent at least C$500,000 and owned a 25% interest.
To acquire the balance of the Millennium property and the Mt. Isa projects, Global Energy Metals will pay Hammer shares equal to 19.9% of the issued share capital.
Next on the to-do list includes re-commencing exploration and expansion of the project, in order to get a current resource estimate as well as identify new opportunities.
"The initial work program, that just concluded at Millennium, has only just begun to highlight the potential for the project to be part of a much larger regional cobalt play across the Mt. Isa region of Queensland Australia," said Smith.
"We want to fast-track this as much as possible," he added.
Continuing to build the team
Global Energy Metals has also bolstered its team in recent weeks, with the appointment of Giulio T. Bonifacio and Bassam Moubarak as strategic advisors.
In the case of Bonifacio, he was the founder, president and director of Nevada Copper since its inception in 2005 until February 2018 and has led and directed efforts at many stages of development including exploration, development, permitting and construction. Bonifacio has experience in operations, capital markets, project finance and mergers and acquisitions.
"Having someone as seasoned as Mr. Bonifacio with his international network of bankers, fund managers, analysts, and high net-worth stakeholders along with his extensive operational knowledge will be a great asset to Global Energy Metals," said Smith.
Moubarak, a Chartered Professional Accountant, has been active in the restructuring and refinancing of a number of junior resource companies over the past decade.
He has served as an officer and director of several mining and exploration companies. His most recent role was as Chief Financial Officer of Lithium X of which he was pivotal in the execution of its takeover by the Hong Kong acquisition vehicle NextView. He also served as CFO of Goldrock Mines Corp. where he played a key role in its sale to Fortuna Silver Mines Inc.
“Bassam brings knowledge and experience in resource development and financing that will be invaluable to Global Energy Metals and I believe will prove to be paramount to our success in the Company's cobalt focused growth strategy," said Smith.
For now, its full speed ahead for Global Energy Metals, as it continues its path of developing a diversified global portfolio of cobalt assets in safe, mining-friendly jurisdictions.