Global Energy Metals Corp (TSX-V:GEMC) announced that it has entered into a non-binding letter of intent with a subsidiary of Fulcrum Metals to acquire a 0.5% royalty on net smelter returns on Fulcrum's Charlot-Neely, Fontaine Lake, Snowbird and South Pendleton uranium projects located in Saskatchewan, Canada.
The company said it will also be granted a two-year option to acquire a 19.9% interest in the projects.
The projects total more than 59,000 hectares and are located close to the rim of the Athabasca Basin, a district known for high-grade uranium.
Uranium samples of up to 6.22% at Charlot-Neely and 1.44% at Fontaine Lake have been returned.
“In a world transitioning towards cleaner and greener energy solutions, one element takes center stage: uranium. This is a right time, right jurisdiction, right commodity scenario that aligns Global Energy Metals with uranium’s pivotal role in the global energy landscape,” Global Energy Metals CEO Mitchell Smith said in a statement.
“Taking a non-operating interest option and royalty on a highly prospective portfolio of Canadian uranium assets fits well with Global Energy Metals’ ongoing strategy of providing our investors investment exposure to new energy metals critical to an electrified future.”
Smith added that the company will work with Fulcrum to further evaluate options for the projects, including securing a strategic operational partner to advance them.
Agreement terms
Global Energy Metals will acquire the net smelter royalty and option in exchange for the issuance of 5 million shares at C$0.06 per share to Fulcrum.
To exercise the option, Global Energy Metals will pay Fulcrum $1 million in cash and shares at a minimum deemed issue price equal to not less than the Discounted Market price at the time a definitive agreement is announced.
If the option is not exercised after one year, Fulcrum is entitled to $50,000 in cash and $125,000 in Global Energy Metal shares at a deemed price per share equal to the floor price.
Additional details of the agreement can be found here.
Global Energy Metals offers investment exposure to the growing rechargeable battery and electric vehicle (EV) market by building a diversified global portfolio of exploration and growth-stage battery mineral assets.