Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GBLEF) (FRA:5GE1) announced that it has signed a definitive agreement to acquire a strategic interest in the past-producing Råna project in Norway.
Råna is a nickel-copper-cobalt project that includes the past-producing Bruvann nickel mine in northern Norway.
The deal was first announced in February 2021 and includes three exploration licences covering the Bruvann property and a fourth exploration licence to the west, which collectively forms the Råna project.
READ: Global Energy Metals adds highly prospective Råna nickel project in Norway to its battery metals assets
As part of the transaction, GEMC will acquire a 1% net smelter return (NSR) royalty on the property from Chincherinchee Nominee Pty Ltd.
“The signing of this definitive agreement for a strategic interest and royalty on the Råna Project and past-producing Bruvann nickel mine is a major mile-stone for the company and an active step towards our goal of serving the green energy value chain,” GEMC CEO Mitchell Smith said in a statement Tuesday.
Smith told investors that the project is located in “one of the world's most opportune nickel districts,” giving GEMC the strategic benefit of being in a potential future supply source for a burgeoning European battery manufacturing hub in Scandinavia.
According to GEMC, Råna is one of the few drill-ready Class-1 nickel projects globally, with low capex anticipated to get it up and running.
Råna covers 25 square kilometres around the south shore of Ofotfjord, which is ice-free the year-round and two kilometres away from a shipping dock and other infrastructure. The project is also in close proximity to a growing end-user market including FREYR AS, a Norwegian incorporated company that is developing environmentally friendly lithium-ion based battery cell facilities in Norway.
The Råna intrusion hosts the Bruvann nickel, copper and cobalt mine with nearly 9.2 million tons remaining resources in the underground mine.
As per the term sheet, GEMC will issue 3.3 million shares in exchange for 10% interest and a 1% NSR on Råna. GEMC will have a carried interest on the project and will not be responsible for any project costs until the vendor incurs more than C$1.5 million in project expenditures. Shares will be released in batches over a 12-month period.
The vendor or royalty holder has the right to purchase 50% of the NSR for C$1 million before commercial production starts.
GEMC said it intends to work alongside the vendor to attract strategic partners to fund project development at Råna.
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