Global Energy Metals Corp (CVE:GEMC) (OTCMKTS:GLBEF) (FRA:5GE2) has now struck the formal six-month option deal with Australian exploration group Metal Bank Limited (ASX:MBK) on the former's Millennium copper, cobalt and gold project in Mount Isa, Queensland.
As reported earlier this month, Metal Bank, in the six months, will carry out further due diligence and sole-fund an initial exploration program, after which it will have the right to earn up to an 80% stake.
"The option agreement with MBK is another significant milestone in our ability to execute our strategic business plan," said Mitchell Smith, CEO of Global Energy Metals.
"We are excited to be partnering with MBK to advance Millennium while we continue to focus on strengthening our understanding of the potential at Lovelock and Treasure Box, our cobalt-copper-nickel projects in Nevada, and evaluating other opportunities within our strong and diverse portfolio of battery metal assets. We look forward to updating the market on other developments in the near future as MBK commences its exploration program at Millennium."
Millennium 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, 19 kilometres (km) 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). The asset also includes the Corella and Federal prospects, along a zone of significant surface copper, cobalt, gold anomalism and historical workings, which are untested by drilling.
If MBK elects to earn up to an 80% interest, this will be done 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. 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$2 million.
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.
Inés Scotland, MBK Chair, told investors: "The option on the Millennium project represents an excellent growth opportunity for MBK and its shareholders, providing us with exclusive rights to an advanced copper-cobalt asset of significant size in close proximity to processing solutions and excellent infrastructure."
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