Complete ownership of Millennium, a 3.1-million-ton cobalt-copper project in the Mount Isa region of Queensland, Australia, gives GEMC full control of future development at the site.
Cobalt is the dominant economic metal within the deposit and, with the strengthening price of the energy metal, GEMC will remodel the deposit on a cobalt-equivalent basis.
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The outright acquisition of Millennium adds an exciting scalable cobalt-dominant project to GEMC’s portfolio of assets, according to CEO Mitchell Smith.
“(Our) strong understanding of the potential for the high-grade Millennium project and surrounding land package, together with Hammer's extensive jurisdictional experience in Mount Isa, positions GEMC well to bring the project closer to development and deliver significant value to our shareholders,” Smith said in a statement.
Under the terms of the deal, GEMC issued Hammer nearly 19.3 million shares, giving Hammer 19.9% ownership of the junior company. Hammer will also have the right to nominate a person to GEMC’s board of directors so long as it maintains a 10% interest in the company.
All shares issued as part of the transaction are subject to a hold period of four months plus one day from the date of issuance. In addition, Hammer’s shares are also subject to a voluntary pooling agreement that sees 20% of the shares released in concurrence with the transaction, an additional 40% on December 27, 2019 and the remaining 40% released in a year’s time on June 27.
The release of Hammer’s shares will be accelerated if the trading price of GEMC’s shares cross certain thresholds over a consecutive ten-day period, the company said.
Shares of GEMC slipped 7.6% on Thursday afternoon to trade at C$0.06.
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