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Global Energy Metals set to advance its Millennium copper, cobalt and gold project as it strikes option deal with Australia's Metal Bank Ltd

The company has struck a binding term sheet with MBK on an exclusive six month option period

Global Energy Metals Corp -
MBK chair Inés Scotland said the 'market fundamentals for copper and cobalt are extremely favourable and we consider there is significant growth potential across the project area'

Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GLBEF) has announced an option deal with experienced Australian exploration group Metal Bank Limited (ASX:MBK), which will advance the former's Millennium copper, cobalt and gold project in Mount Isa, Queensland.

The company has struck a binding term sheet with MBK on an exclusive six month option period, in which the latter will carry out further due diligence and sole-fund an initial exploration program.

READ: Global Energy Metals boosts Lovelock drill program to 2,000 metres to encompass nearby Treasure Box project

After that, MBK will have the right to earn up to an 80% interest in the project.

Mitchell Smith, the CEO of Global Energy Metals, told investors that the deal presented an "excellent opportunity for successful exploration and development of a highly prospective battery metal project". 

"Additionally, it provides GEMC with continued exposure to the project through both maintained project level ownership and a sizeable equity interest in Metal Bank," he said.

"Led by Inés Scotland, Guy Robertson, Sue-Ann Higgins and Rhys Davies, the Metal Bank team has a track record of global success including several discoveries that have proceeded to mine development and project sale generating billions of dollars.

"This extensive experience, transactional know-how and industry pedigree that will be put to use by the MBK team to aggressively advance the Millennium project is a significant opportunity for Global Energy Metals and its shareholders."

The Millennium asset contains an inferred copper-equivalent resource of 5.89 million tonnes (Mt) across five mining leases and has substantial growth upside.

It sits in the Mount Isa region, 19km from the Rocklands copper-cobalt project, which hosts 55.4Mt grading 0.64% copper, 0.15 g/t gold, 290 parts per million (ppm) cobalt (0.90% copper-equivalent).

Inés Scotland, MBK chair, noted: "The market fundamentals for copper and cobalt are extremely favourable and we consider there is significant growth potential across the project area. We are excited to be partnering on this project with GEMC, a company advancing and building a diversified global portfolio of exploration and growth-stage battery mineral assets."

The option will begin, subject to MBK and GEMC finalising and signing a formal agreement before June 30, 2021.

GEMC has granted MBK a right of exclusivity for A$10,000 and the Australian company will make a further A$10,000 payment to GEMC upon signing.

If MBK elects to earn up to an 80% interest, this will be over two phases.

In phase 2, MBK can earn a 51% interest by issuing MBK shares to GEMC worth A$250,000 and sole funding exploration expenditure of A$1 million (m).

In Phase 3, MBK can earn a further 29% interest (taking its total interest to 80%) by issuing shares worth A$350,000 to GEMC and sole funding expenditure of A$2m.

There is also a fourth phase, in which GEMC can choose that MBK buy out its remaining 20% interest for shares in MBK at a value to be agreed. If not, both parties will fund expenditures in proportion to their respective interests.

The term sheet also includes a buy-out option at the end of  the second phase, which will allow MBK to acquire an additional 29% (taking its total interest to 80%) for A$1.5 million of MBK shares and A$1 million in cash, with the joint venture then proceeding immediately to the fourth phase.

The Millennium project is an advanced asset with a large defined zone of copper-cobalt mineralisation that remains open for expansion at depth and along strike.

Contact the author at giles@proactiveinvestors.com

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