Australian exploration and development company Hammer Metals Ltd has signed a Letter of Intent with TSXV-listed Global Energy Metals Corp. (GEMC) to divest 100% interest in 8 non-contiguous blocks within Hammer’s Mount Isa portfolio subject to a 60-day due diligence period.
Managing Director of Hammer Metals, Alex Hewlett, also commented: “We are very pleased to be strengthening our partnership with GEMC and combining efforts to build a new cobalt camp in the Mt. Isa mining district. This strategic alliance offers shareholders of both companies extensive possibilities for growth and aligns well with Hammer’s strategy by leveraging our infrastructure and proven operational expertise that will be key in furthering the exploration and development potential in this important cobalt rich region.”
President & CEO of GEMC, Mitchell Smith, commented on the building of an Australian cobalt district. He said: “In addition to advancing the Millennium Cobalt Project, the acquisition of these district-scale cobalt properties to our cobalt portfolio represents an opportunistic and strategic investment consistent with the company’s cobalt focused supply mandate. Our alliance with Hammer provides greater depth to our exploration efforts in the region and allows for the defining of a new district-scale cobalt camp. The need to source non-conflict future supply of cobalt as feed to the growing demand being fuelled by the surge in production of electric vehicles and battery based consumer electronics has become very apparent. This building of a cobalt camp in Australia is a step closer to supply diversification that will further unlock and enhance value for our shareholders and strategic downstream partners.”
Letter of Intent Terms
The terms of the proposed LoI state that subject to the satisfaction of certain conditions, including, but not limited to, completion of due diligence, negotiation of definitive documentation in respect of the transaction, and the receipt of any required regulatory approvals, including the approval of the TSX Venture Exchange, GEMC would have the right to acquire 100% of certain rights and interests known as the Cobalt Ridge and Mt. Dorothy projects (the Mt. Isa Projects) located in Queensland, Australia. Upon completing its due diligence and upon meeting the aforementioned conditions, should GEMC elect to enter into a definitive agreement with Hammer, GEMC would have the exclusive right to acquire a 100% interest in the Mt. Isa Projects by:
- Issuing to Hammer a cash payment of AUS$80 000 on execution of the Definitive Agreement;
- Issuing to Hammer the equivalent of AUS$300 000 in common shares in the capital of GEMC at a deemed issue price determined by the greater of AUS$0.25 or the 5-day average price per share from the final acceptance by the TSXV of the transaction (the Closing Date);
- Within the first 24 months from the Closing Date, agree to incur a minimum cumulative exploration expenditure on the properties in the amount of AUS$1 000 000;
- Should GEMC fail to make the required exploration expenditures, GEMC will issue to Hammer a cash payment of AUS$100 000 and the equivalent of AUS$250 000 in common shares in the capital of GEMC;
- The parties will also agree to a 1.5% Net Smelter Royalty (NSR) in favour of Hammer; and
- Upon completing a NI 43-101 compliant resource report on either of the two projects, GEMC will issue to Hammer the equivalent of AUS$250 000 in common shares in the capital of GEMC. All GEMC shares issued pursuant to the transaction will be subject to a statutory hold period of four months and one day following the date of issuance thereof and the deemed issue price determined by the 5-day average price per share from the date of issuance. In addition, the ordinary shares of GEMC to be issued will be subject to a contractual lock-up period of twelve months following their issue to Hammer, during which these shares may not be transferred.
Read the article online at: https://www.globalminingreview.com/finance-business/16032018/hammer-metals-to-divest-mt-dorothy-and-cobalt-ridge-tenements-to-global-energy-metals/