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Metal Bank (ASX:MBK) -
Source: Metal Bank
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  • Shares in Metal Bank (MBK) have risen after inking up a deal to potentially earn a majority interest in a Queensland copper-cobalt-gold project
  • Under the terms of the deal, Metal Bank could earn an 80 per cent interest in the Millenium project from Global Energy Metals Corporation (GEMC)
  • Metal Bank has six months to take on some extra due diligence work and an initial exploration program at the project before moving ahead with the deal
  • If successful, MBK will start earning its interest in a four-phase plan, with the option to conclude the deal by buying a full interest in Millenium
  • Metal Bank closed 11.11 per cent up to trade at one cent apiece

Metal Bank (MBK) shares rose today after the company inked an option deal to potentially earn a majority interest in a Queensland copper-cobalt-gold project.

The junior explorer struck the deal with TSX Venture Exchange-listed Global Energy Metals Corporation (GEMC) over the Millenium project in Queensland’s Mt Isa region.

The six-month option deal gives MBK time to scope out the project before it makes a decision whether or not to earn its interest in Millenium and form a joint venture (JV) with GEMC over the project.

Metal Bank will first make two $10,000 payments to GEMC ahead of signing the option deal, which is currently slated to before the end of June. One payment will be for GEMC to grant Metal Bank a right of exclusivity of the Millenium project, and the other will be made upon formally signing the option deal.

From here, Metal Bank will have six months to take on some further due diligence over the project and complete a phase-one exploration program to confirm the potential for mineralisation at Millenium.

It’s at this point that Metal Bank will decide to pursue the earn-in and joint venture deal or call off its agreement with GEMC.

If Metal Bank agrees to the earn-in deal, it will then need to issue $250,000 worth of MBK shares to GEMC and fund exploration spending of up to $1 million for the Millenium project. This will secure MBK a 51 per cent interest in the project.

After this point, MBK can then earn an additional 29 per cent interest in the project by issuing another $350,000 worth of shares to GEMC and funding $2 million worth of exploration. This will bolster its interest in the project to 80 per cent.

Alternatively, Metal Bank can choose to buy this additional 29 per cent interest in the project for $1.5 million worth of shares and $1 million in cash, in which case the deal will immediately proceed to the final phase.

In this last phase, GEMC will then have the choice to make MBK buy out the remaining interest in the project in an all-scrip deal, or the two companies will work together on the project as a JV and fund work in proportion to their respective interests.

Why the Millenium project?

According to Metal Bank, the Millenium project is an advanced copper-cobalt-gold project with a resource of 5.9 million tonnes at 1.08 per cent copper equivalent across five mining leases.

Further to this, mineralisation at the project remains open at depth and along strike.

Metal Bank Chair Inés Scotland said Millenium had excellent expansion potential and an accelerated pathway to production.

“The market fundamentals for copper and cobalt are extremely favourable, and we consider there is significant growth potential across the project area,” Ms Scotland said.

“We are excited to be partnering on this project with GEMC, a company advancing and building a diversified global portfolio of exploration and growth-stage battery mineral assets.”

The Mt Isa region that is home to the Millenium project is recognised as a world-class mining region, according to MBK, and holds over a quarter of the world’s lead and zinc reserves, five per cent of global silver resources, and 1.5 per cent of the world’s copper resources.

Metal Bank closed 11.11 per cent up to trade at one cent apiece.

MBK by the numbers
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