Global Energy Metals Corp (TSX-V:GEMC) announced it has entered into a non-binding letter of intent with NeoLithica to acquire a royalty and option on its Peace River lithium project in Alberta.
Per the agreement, Global Energy Metals would be granted an 18-month option to acquire a 19.9% interest and a 1% Net Smelter Return royalty in the project.
NeoLithica is focused on developing lithium resources using direct lithium extraction (DLE) and refining technologies, in line with Canada's critical minerals strategy.
The Peace River lithium project spans 377,508 hectares and hosts an inferred resource estimate of 10 million tonnes of lithium carbonate equivalent (LCE) at an average grade of 70.0 mg/L.
Under the agreement, Global Energy Metals will issue 2 million shares at a deemed price of C$0.05 per share and make an immediate cash payment of $10,000 to secure the option.
To exercise the option within the 18-month period, the company will be required to pay NeoLithica $1.5 million in a combination of cash and shares.
NeoLithica will remain the operator, maintaining the project while advancing its development.
It has a staged plan to establish itself as a sustainable lithium producer, having completed resource definition and regulatory steps in 2023.
In early 2025, NeoLithica will conduct pilot demonstrations and a Preliminary Economic Assessment, followed by drilling and reservoir evaluations to refine extraction methods and advance toward a Pre-feasibility Study.
Mitchell Smith, Global Energy Metals CEO, highlighted that lithium projects are emerging as a promising solution to meet the growing demand for battery-grade lithium amid the energy transition.
“Taking a non-operating interest option and royalty on a highly prospective lithium brine asset offers excellent optionality against a realistic current background of depressed lithium pricing and global cost inflation,” Smith said.
“We see Peace River as an important Canadian project that has the potential to be a strategic source of lithium as the global supply chain rebalances over time, driven by the growing criticality of locally sourced, ethically produced lithium needed to support the energy transition.”
Barry Caplan, NeoLithica president, added: “Global Energy will be a valuable partner and help evaluate options for NeoLithica and work with us in securing a strategic operational partner to apply their technical and jurisdictional expertise to advance this North American lithium project when demand for lithium surges, driven primarily by the electric vehicle revolution and the growing need for renewable energy storage systems.”