Global Energy Metals buys cobalt project near Tesla gigafactory
In its quest to become a niche supplier of cobalt, Global Energy Metals (GEMC:TSX.V) announced it has signed an agreement with Nevada Sunrise Gold Corp to acquire an 85% interest in the Lovelock cobalt mine and the Treasure Box project, located in Churchill County, Nevada.
In a media statement, the Vancouver-based junior said management was keen on buying these projects given that they are located only 150 kilometres east of Sparks Nevada, home to – Tesla's Gigafactory 1.
The Stillwater Range also hosts operating copper-gold mines and, although limited, there has been some production of high-grade cobalt and nickel since the 1880s.
“The general average of the 200 tons shipped in 1886 averaged 14 percent cobalt and 12 percent nickel,” the miner’s press release reads.
Global Energy Metals said it has identified eight diamond drill targets in addition to geological mapping, chip, and channel sampling and geophysics.
“The acquisition of the Nevada cobalt projects is another significant milestone for GEMC. This transaction exposes the company and its shareholders to a wealth of exploration opportunities in another top-tier mining district with proven mineral endowment. GEMC believes that the sizeable property package it has locked up in the heart of a very prolific and proven district, hosts the potential for significant cobalt exploration upside,” the firm’s President and CEO, Mitchell Smith, said in the media brief.
Under the terms of the agreement, Smith’s company is required to issue to Nevada Sunrise a number of common shares in the capital of Global as is equal to $200,000 at a deemed price per share equal to the greater of: (a) $0.15; and (b) the Volume Weighted Average of the closing price of the company's shares for the 20 trading days immediately prior to the execution of the deal.
It also has to assume all future cash to the underlying vendor subject to an existing 2% net smelter royalty and reimburse Nevada Sunrise for the issue by Nevada Sunrise of Nevada Sunrise common shares to the underlying vendor.
Finally, it has to incur in expenditures totaling $1 million by the third anniversary of the effective date of the signing of the agreement.