Global Energy Metals Corporation (CVE:GEMC) (OTCQB:GBLEF) has entered into a definitive purchase agreement to sell a portfolio of royalty interests to Electric Royalties Ltd (CVE:ELEC) on the Millennium Cobalt Project, the Mt Dorothy Cobalt Project and the Cobalt Ridge Project in Queensland, Australia.
"The closing of this royalty transaction and major endorsement by this new electric-metals royalty company underpins another step in the company's strategy to create value from its strategic battery mineral portfolio," said GEMC CEO Mitchell Smith in a statement Thursday.
"Through the meaningful stake in Electric Royalties, Global Energy will have added exposure to the strong and diversified energy mineral asset royalty portfolio that ERL holds in lithium, vanadium, manganese, cobalt, and graphite, as well as the added benefit of like-minded corporate objectives and growth mandate in a strong critical minerals and clean energy price environment."
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In consideration for a 0.5% gross metal royalty on Millennium and the Mount Isa projects, Electric Royalties will issue 1.15 million shares to GEMC and make a C$150,000 cash payment. The consideration shares will be escrowed and have a staged vesting period over 18 months.
Vancouver-based GEMC also said that Electric Royalties has been granted a call option (First Option), exercisable at any time, for a period of two years from the effective date, to acquire a 0.5% royalty on the Net Smelter Returns (NSR) from the Millennium Cobalt Project, by paying C$500,000 to GEMC, payable up to 25% in shares of Electric Royalties at its election.
Upon exercise of the First Option, Electric Royalties will have a call option to increase the Millennium NSR by a further 1% by paying C$1 million to GEMC, payable up to 25% in shares of Electric Royalties at its election.
The option is exercisable on the earlier of the third anniversary of the closing date and six months from the date that a preliminary economic analysis or similar study on the Millennium Project is provided to Electric Royalties.
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