EMX Royalty Corp. [EMX-TSXV, NYSE American] has executed an agreement to sell three nickel-copper-cobalt projects in Norway to Pursuit Minerals Ltd. [PUR-ASX], a battery metals-focused company which trades on the Australian Stock Exchange.
The Espedalen, Hosanger, and Sigdal projects each contain magmatic nickel-copper-cobalt sulfide deposits, associated with mafic-ultramafic intrusive complexes in southern Norway. Platinum group elements (PGEs) and gold are also enriched in some of the deposits although historic sampling for PGEs and gold was limited their endowments remain poorly documented.
Each of the projects host areas of historic mining and drill-defined zones of sulfide mineralization. Nickel mining in the Espedalen area, for example, was intermittently active from 1848 to 1918. In that time, 100,000 tonnes of nickel was produced, averaging 1.0% nickel, 0.4% copper and 0.6% cobalt.
The agreement provides EMX with an equity interest in Pursuit, a 3% net smelter return royalty on each of the three projects, and other considerations, including annual advance royalty and milestone payments. Pursuit may also issue up to 9.9% of its issued and outstanding shares to EMX as certain conditions of the agreement are satisfied.
EMX shares advanced on the news, rising 1.9% or $0.05 to $2.65. The shares are currently trading in a 52-week range of $1.43 and $2.77.
EMX is a precious and base metals royalty company with a diversified portfolio of royalty, mineral property and investment interests spanning five continents. Its two key assets are the Leeville royalty in Nevada and Timok Project royalty in Serbia. Those projects are the focus of exploration and development by Nevada Gold Mines LLC and Zijin Mining Group Ltd., respectively.
The Norwegian projects being sold to Pursuit occur amongst a cluster of nickel deposits and mafic intrusive complexes that is considered to be the eastern extension of the same trend that hosts the Voisey’s Bay nickel deposits in Labrador, Canada.
Pusuit will have an option to acquire 100% project interests in the Espedalen, Hosanger, and Sigdal projects under the following terms:
Upon execution of the agreement, Pusuit will make cash a cash payment of $25,000 and issue 20 million shares to EMX.
Pursuit will then have a 12-month option period during which it must spend a minimum of $250,000 on the projects.
Once that option is exercised, Pursuit will issue up to 20 million shares, capped at 9.9% of its issued and outstanding shares.
By exercising the option, Pursuit will vest a 100% interest in each project, with EMX retaining a 3% NSR royalty, 1% of which may be purchased by Pursuit under certain conditions. AAR will commence on the second anniversary of the agreement, starting at $25,000 per project and increasing at $5,000 annually.
On the second anniversary of the agreement, Pursuit will issue to EMX another tranche of shares equal in cash value to the 20 million Pursuit shares issued to exercise the option (as determined by the price of the shares when issued at the exercise of the option).
If the option is exercised, Pursuit will commit another $500,000 in exploration expenses by the second anniversary and drill at least 1,000 metres per project each year until a pre-feasibility study is completed.
Milestone payments of $500,000 will be made to EMX upon each of the following milestones: a) completion of a preliminary economic assessment, b) delivery of a positive feasibility study.