Global Energy Metals Corp. signed a letter of intent to acquire the Mount Dorothy and Cobalt Ridge cobalt projects in Queensland, Australia, collectively known as the Mount Isa cobalt projects, from Hammer Metals Ltd.
The company noted in its March 14 release that the deal will expand its Australian landholding from the 135 hectares at the Millennium cobalt property to 2,560 hectares in the region. Global Energy Metals is acquiring a 75% interest in Millennium from Hammer Metals under a September 2017 option agreement.
Subject to various conditions including due diligence, Global Energy Metals expects to acquire the Mount Isa cobalt projects by paying A$80,000 in cash on execution of a definitive deal and issuing A$300,000 worth of shares.
The company will then spend at least A$1 million on exploration of the properties within 24 months, and will issue another A$250,000 worth of shares if it defines National Instrument 43-101-compliant resources at either project.
Hammer Metals, which will also retain a 1.5% net smelter royalty, will manage the exploration programs and will secure a services agreement for at least 12 months.
"The need to source non-conflict future supply of cobalt as feed to the growing demand being fueled by the surge in production of electric vehicles and battery based consumer electronics has become very apparent," Global Energy Metals President and CEO Mitchell Smith commented.
