PERTH (miningweekly.com) – Junior explorer Hammer Metals has taken the decision to divest of its Mt Dorothy and Cobalt Ridge tenements, in Queensland.
The company on Friday announced a letter of intent with TSX-V-listed Global Energy Metals Corporation (GEMC) to divest of its interest in the eight non-contiguous sub blocks within its Mount Isa portfolio.
Hammer will receive an up-front consideration of C$80 000 cash on signing, as well as C$300 000 in common shares in GEMC at 25c each, or the five-day average price per share from final TSX-V acceptance of transaction.
“We are very pleased to be strengthening our partnership with GEMC and combining efforts to build a new cobalt camp in the Mt Isa mining district,” said Hammer MD Alex Hewlett.
“This strategic alliance offers shareholders of both companies extensive possibilities for growth and aligns well with Hammer’s strategy by leveraging our infrastructure and proven operational expertise that will be key in furthering the exploration and development potential in this important cobalt-rich region.”
Under the terms of the agreement GEMC will spend C$1-million on exploration in the first 24 months from acquiring the project, and should the company fail to do this, GEMC will issue Hammer a cash payment of C$100 000 and the equivalent of C$250 000 in common shares.
The parties have also agreed to a 1.5% net smelter royalty for Hammer, as well as a further C$250 000 in shares from GEMC once a compliant resource has been estimated.