Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GBLEF) announced that the company has signed a letter of intent to sell a royalty from multiple projects in exchange for cash and stocks from Electric Royalties Ltd.
The royalties come from the Vancouver-based company’s Millennium Cobalt Project, Mount Dorothy Cobalt Project and Cobalt Ridge Project located in Queensland, Australia.
Under the terms of the LOI, in exchange for a 0.5% royalty on the Millennium and Mount Isa projects, Electric Royalties will issue Global Energy Metals 1.15 million shares and pay $150,000 in cash.
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"This commitment by Electric Royalties is a significant endorsement of the Millennium and Mount Isa projects by a mine finance firm focused on minerals core to the new energy economy,” Global Energy CEO Mitchell Smith said in a statement.
“This royalty sales provides Global Energy Metals with an attractive form of financing and short term investments equal to our market cap through the spin-out of a small royalty on a portion of our Australian projects. It also provides an option to fund future development at Millennium in a non-dilutive manner to the company and create an opportunity for cross marketing promotion with a strong royalty partner."
Electric Royalties will also be granted the option within two years to acquire a 0.5% net smelter return royalty on the Millennium Cobalt Project by paying C$500,000, up to which 25% can be paid in shares.
"We are pleased to have the opportunity to collaborate with Global Energy Metals on the development of the Millennium and Mount Isa Projects and the royalties will be an excellent addition to our diversified portfolio of battery mineral royalties,” Electric Royalties CEO Brendan Yurik said.
“The acquisition of this package is consistent with Electric Royalties' objective in establishing a new royalty company with the potential to add considerable value for its shareholders. As this represents our first cobalt royalties we are extremely encouraged by the potential Millennium has in becoming a source of critical material needed to feed the electric revolution."
Global Energy Metals is building a diverse portfolio of exploration and growth-stage cobalt assets. The firm acquires metals and mining companies with a focus on metals in the rechargeable battery market and energy storage sector. It aims to acquire cobalt, lithium, graphite, and other battery metals projects.
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