Global Energy Metals Corp (TSX-V:GEMC) and Electric Royalties Ltd (TSX-V:ELEC, OTC:ELECF) have inked a deal on the Rana nickel project in Norway that sees GEMC increase its position in Electric, which will gain a 1% net smelter return (NSR) royalty on the project.
According to a statement, Electric will issue 2 million shares and pay $100,000 in cash to GEMC and its partner Scandinavian Resource Holdings (SRH) in proportion to their respective project ownership.
In return, the company will receive a 1% NSR on four exploration licenses totaling 25 square kilometres at the Råna mafic-ultramafic intrusion in northern Norway, which includes the past producing Bruvann nickel mine.
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“Under-explored, historically producing nickel mines like Rana in tier 1 jurisdictions are an excellent place to search for future nickel supply to fill the looming supply-demand gap in an ESG friendly way and with less risk than greenfield projects,” Electric Royalties CEO Brendan Yurik said in a statement.
“This transaction with Electric Royalties is another example of GEMC executing on strategy and providing shareholders with increased exposure to the raw materials that are powering an electrified future,” GEMC CEO Mitchell Smith added.
In addition to the agreement, the companies announced that Metals One PLC has signed a definitive term sheet with SRH to acquire 90% of the Rana nickel project held by SRH through a share, cash and project level expenditure transaction.
Metals One is a private UK-registered company that plans to complete listing in London during the first quarter of 2022, according to GEMC.
As part of the agreement, Metals One will be committing to a £1 million exploration work program within the first 12 months with plans to release an updated resource within the next 12 to 24 months. GEMC will maintain a 10% interest in the project and be carried on project level expenditures of up to $1.5 million.
“The added benefit of having Metals One PLC transact with SRH and commit to a healthy exploration budget aimed at advancing this class-1 nickel sulphide project is also very encouraging,” GEMC’s Smith told investors. “We look forward to working alongside all parties in developing this exciting project at a time when downstream users race to control more supply of raw materials that are key to transitioning to low-carbon energy sources, with nickel one of the key metals used in lithium-ion batteries for electric vehicles.”
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Electric CEO Yurik added that the firm is “very excited to see how this modern exploration work proceeds as there is lots of upside and value remaining to be unlocked at the Rana nickel project”.
Yurik said that Electric is expecting “major updates” on more than 60% of its portfolio in 2022.
Electric Royalties has a growing portfolio of 18 royalties, including one royalty that currently generates revenue.
GEMC has copper, nickel and cobalt projects in Canada, Australia, Norway and the United States.
Contact Angela at angela@proactiveinvestors.com
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