Global Energy Metals Corporation (GEMC) announced that it was poised to further increase its ownership of Electric Royalties as it announced a deal to create a new 1% net smelter royalty (NSR) on the Rana nickel-cobalt-copper project in Norway.
The project, which includes the past producing Bruvann nickel mine which was in production from 1989 until 2002, is jointly held by GEMC and Scandinavian Resource Holdings (SRH) and lies on the Ofoten Fjord.
A letter of intent has now been signed between Electric Royalties and SRH to create the new royalty on four exploration licenses totaling 25 square kilometers (sq km) in the Råna mafic-ultramafic intrusion, said GEMC.
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Electric Royalties is creating the 1% NSR on the Råna project for a total consideration of 2 million of its shares and C$100,000 cash payable to GEMC and SRH in proportion to their ownership.
The past producing Bruvann nickel-copper-cobalt (Ni-Cu-Co) mine was shut down in 2002 due to low nickel prices after processing 8.2 million tonnes of ore at an average grade of 0.52% nickel, 0.1% copper and 0.02% cobalt, but there are significant historical resources remaining.
"We are excited to partner again with Electric Royalties and strengthen our ownership in their company while benefiting further from the added exposure our shareholders will gain through Electric’s impressive royalty portfolio and the raw materials that are building an electrified future," said Mitchell Smith, CEO of Global Energy Metals.
"We see Electric as the perfect partner to strengthen awareness about the Rana Project and attract further investment to advance this important class-1 sulphide nickel project."
Brendan Yurik, CEO of Electric Royalties, added: "We are very pleased to add Rana to our royalty portfolio as it represents our first exposure to nickel. Furthermore, we are excited about the potential of the mine’s restart as well as the prospectivity of the surrounding land package."
He also noted: "Market conditions have now changed and nickel prices are more than double what they were when the mine shut down."
In July, 2020, Global Energy Metals revealed that it had struck a definitive purchase agreement to sell a portfolio of royalty interests to Electric Royalties on the Millennium Cobalt project, the Mt Dorothy Cobalt Project and the Cobalt Ridge Project in Queensland, Australia.
"Through the meaningful stake in Electric Royalties, Global Energy will have added exposure to the strong and diversified energy mineral asset royalty portfolio that ERL holds in lithium, vanadium, manganese, cobalt, and graphite, as well as the added benefit of like-minded corporate objectives and growth mandate in a strong critical minerals and clean energy price environment," Smith had said.
Global Energy Metals offers investors 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.
Contact the author at giles@proactiveinvestors.com