Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GBLEF) closed the sale of a 0.5% gross metal royalty on a trio of Australian-based cobalt projects to Electric Royalties Inc, it announced Tuesday.
The company sold the royalty on the Millennium, Mt Dorothy and Cobalt Ridge cobalt projects, which are located in the state of Queensland.
Under the terms of the sale, Electric Royalties will issue Global Energy Metals 1.15 million shares in the company in addition to a C$150,000 cash payment.
READ: Global Energy Metals executing on portfolio-wide, comprehensive development strategy for its cobalt, nickel and copper projects
Electric Royalties was also granted a call option to acquire a 0.5% royalty on the net smelter returns form the Millennium project in exchange for C$500,000, of which 25% can be satisfied in Electric Royalty shares at its discretion.
If Electric Royalties chooses to exercise the option, it may also choose to increase the Millennium NSR by another 1% by paying C$1 million, of which 25% can be paid in shares.
The option is valid for a two-year period from the closing date.
"We are pleased by this first monetization of our Australian-based battery mineral asset portfolio,” GEMC CEO Mitchell Smith told shareholders in a statement.
“The initial 1,150,000 shares in Electric Royalties, equating to approximately a 2.5% interest in ELEC, will provide our shareholders with a way to participate in an aggressive and rapidly growing royalty company focused on minerals core to the electric revolution.”
The cash component from the sale will also allow GEMC to push forward its plan to diversify its exposure to the battery minerals supply chain and allow it to further capitalize on the shift to electric mobility and new forms of clean energy storage, which is driven by accelerated efforts to reduce the world’s dependence on fossil fuels, Smith added.
Through its wholly-owned subsidiary, Element Minerals Australia PTY, Global Energy Metals has a portfolio of 2,560 hectares across the Mount Isa and Cloncurry mining districts in northwest Queensland. The land package contains a number of properties, including the aforementioned cobalt projects, with significant cobalt, copper, gold and base metal exploration potential.
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