Boreal Metals Corp. (TSX-V: BMX) is pleased to announce the execution of a definitive agreement (the "Agreement") with EMX Royalty Corporation ("EMX") (NYSE American: EMX, TSXV: EMX) for the acquisition of the Guldgruvan cobalt project ("Guldgruvan" or the "Project") by Boreal Energy Metals Corp. ("BEMC"), a newly created and wholly owned subsidiary of Boreal.
The Guldgruvan nr 101 license contains the historic Los Cobalt Mine, one of the better known historic cobalt producers in the region, and is also the region where nickel was first discovered and recognized as an element in 17511. Cobalt, copper, and nickel were mined on the property in the 1600's to 1750's. In addition to these metals, gold, silver, zinc, and lead are also present in zones of mineralization. Following the Company's growth strategy to acquire past producing projects, Guldgruvan, has undergone only limited modern exploration.
"Boreal continues its exploration project growth strategy with the addition of the Guldgruvan Project. Through the acquisition of two significant past producing cobalt assets, Boreal is well positioned in the region as Scandinavian Battery Companies are moving forward to lead Europe's emerging battery production sector," stated Karl Antonius, President and CEO. "Boreal believes the acquisition delivers significant benefits to its shareholders. Guldgruvan complements the previously announced acquisition of Modum, which combined further builds the foundation for Boreal's strong base metal and cobalt exploration in Scandinavia."
Transaction Commercial Terms
The agreement with Boreal contains the following commercial terms:
- Subject to regulatory approval, at closing, EMX will transfer its Guldgruvan exploration licenses to BEMC.
- At closing, BEMC will issue to EMX Royalty Corp common shares of BEMC that will bring EMX's share of equity ownership in BEMC to 5.9%; BEMC will have the continuing obligation to issue additional shares of BEMC to EMX to maintain its 5.9% interest in BEMC, at no additional cost to EMX, until BEMC has raised CDN$3,000,000 in equity. Thereafter, EMX will have the right to participate pro-rata in future financings at its own cost to maintain its 5.9% interest in BEMC. The issuance of BEMC shares to EMX, as set forth in the definitive agreement, is subject to receipt of TSX Venture Exchange approval.
- EMX will be granted an uncapped 3% net smelter return ("NSR") royalty on the Project, of which a 1% NSR royalty may be purchased by BEMC on or before the fifth anniversary of the closing date in 0.5% increments for a total of USD$2,500,000 in cash and common shares of BEMC stock.
- EMX will receive annual advance royalty ("AAR") payments of USD$20,000, commencing on the second anniversary of the closing, with each AAR payment increasing by USD$5,000 per year until reaching USD$60,000 per year.
- EMX will also be reimbursed for its acquisition costs and previous expenditures on the Project.
- The issuance of BEMC shares to EMX, as set forth in the Agreement, is subject to TSX Ventures Exchange approval.
The Nordic Region and Battery Metals Market
The Nordic region is host to 26 active mines and seven smelters. This region has excellent infrastructure including deep-water ports with year-round ice-free harbors, extensive roads, rail, and access to skilled workforce, mining universities, and support services.
Northvolt AB (www.northvolt.com) has selected a location near Skelleftea, in northern Sweden to build Europe's biggest battery factory. Northvolt and Scania, a division of Volkswagen Truck & Bus GmbH, announced on January 25, 2018 they have jointly agreed to develop and commercialize battery cell technology for heavy commercial vehicles2. Northvolt plans on using raw materials that will be responsibly and efficiently sourced as close to the mines as possible, especially from the mineral-rich Nordic peninsula. The use of locally sourced materials avoids conflict minerals in the supply chain.
Cobalt has many uses, but over half of the total global demand comes from the chemical sector which uses cobalt, among other applications, for metallic cathodes in rechargeable batteries3 specifically, lithium cobalt oxide (LiCoO2) is used in lithium ion battery cathodes. Nickel-cadmium (NiCd) and nickel metal hydride (NiMH) batteries also use cobalt to improve the oxidation of nickel. In addition to battery usage in mobile devices, battery technologies for electric vehicles, coupled with a worldwide shortage of ethically-sourced cobalt, have helped drive a multifold increase in the price of cobalt as the global race to source rechargeable battery metals continues to increase worldwide demand.
Overview of Guldgruvan Project
The 2,383 Ha Guldgruvan cobalt project is located near the town of Los, Sweden. The Project is accessible year-round, with robust infrastructure including paved roads, power, and skilled labour in nearby municipalities. The Guldgruvan nr 101 license contains numerous historical workings, test pits and shallow drill holes in addition to five major mining sites, which were the focus of historical production.
Widespread cobalt-bearing copper and subordinate nickel-zinc-gold-silver mineralization occurs in sulphide disseminations, vein-infill, and shear zones within Proterozoic mafic and felsic metavolcanic rocks at Guldgruvan. The cobalt-bearing occurrences define a series of parallel north-northwest trending zones of mineralization that extend for at least six kilometers across the claim package.
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