Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GBLEF) told investors it has struck a renegotiated deal over its high-grade cobalt projects in Nevada, USA, which will give it a controlling interest earlier than planned.
The new deal with Nevada Sunrise and Primus Resources will replace and supersede the original option agreement of January last year, in which Global Energy Metals had an option to purchase an undivided 85% interest in the Lovelock and Treasure Box battery minerals project.
READ: Global Energy Metals sees excellent cobalt, copper and gold recovery from metallurgical testwork at Millennium project
The properties sit just 150 kilometres from Tesla's (NASDAQ:TSLA) Gigafactory - the world's largest battery factory.
The assets encompass a historic producer, in which the average of 200 tons shipped in 1886 was 14% cobalt and 12% nickel. They have never been thoroughly explored in modern times, the firm has previously said.
They are also drill-ready and an exploration program is expected to include detailed geological mapping, chip and channel sampling and magnetic surveys.
The new agreement will allow GEMC to explore and develop the asset in a "timely and expedited manner but without the project expenditure outlay and strict timelines originally contemplated", the Vancouver-based company said in a statement on Tuesday.
"Now, more than ever, companies need to adapt to survive the unprecedented and rapidly changing environment we all find ourselves in. For us that means continuing to move forward," said Mitchell Smith, chief executive at GEMC.
He added: "An accelerated ownership stake in the Nevada-based projects provides the company and its shareholders with high-potential, growth-stage exploration projects in a well-established mining district. Additionally it provides the foundation to break free from the over-reliance of critical material imports from China and other competing nations and instead develop a domestic supply of battery metals critical to sustain our national and economic security."
In consideration for entering the accelerated ownership agreement to give GEMC an undivided 85% interest and Nevada Sunrise an undivided 15% interest, Global Energy Metals shall on closing, among other things, pay to Primus US$35,000 in cash, issue to Primus 1 million GEMC shares (after the effect of the recent share consolidation) at a deemed price of C$0.10.
The company will also issue to Nevada Sunrise 750,000 GEMC shares (also after giving effect to the share split), at the deemed price of C$0.10 a share and forego the originally contemplated exploration expenditures of US$$1 million.
The Lovelock project currently consists of 81 unpatented lode claims in the Cottonwood Canyon area of the Stillwater Range totaling around 642 hectares. Treasure Box hosts mine workings from limited copper production, which occurred until early into the 20th century.
GEMC also said in the statement Tuesday that, with immediate effect, Christopher Ecclestone will resign as a member of the board.
He will continue as an advisor and will continue to identify and pursue new opportunities as part of the firm's commitment to operationalize a clear action plan for critical mineral supply chain security through re-use and upcycling opportunities, it added.
Shares in Toronto were unchanged at C$0.015 each.
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