Global Energy Metals Corporation (GEMC), a multi-jurisdictional, multi-commodity critical mineral exploration and development company, has entered into a non-binding Letter of Intent (LOI) to acquire an 18-month option for a 19.9% interest and a 1% Net Smelter Return (NSR) royalty over NeoLithica’s Peace River Lithium Project.
The transaction is subject to approval by the TSX Venture Exchange (TSXV).
NeoLithica is a lithium resource development company based in Calgary, Alberta, focused on integrating direct lithium extraction (DLE) and refining technologies to produce battery-grade lithium compounds.
The Peace River Lithium Project, located in northwest Alberta, covers 377,508 hectares (1,458 square miles) of lithium-brine mineral licences. It encompasses lithium-rich aquifers extending across a 165-km corridor and hosts an inferred mineral resource estimate of 10 million tonnes of lithium carbonate equivalent (LCE) at an average grade of 70.0 mg/L.
Under the terms of the LOI, Global Energy Metals has secured the option to acquire from NeoLithica a 19.9% interest in the Peace River Lithium Project, along with a 1% NSR royalty. To secure the option, GEMC will make an immediate non-refundable cash payment of C$10,000, which will be used for brine testing at the project site.
Upon TSXV approval, GEMC will issue C$100,000 worth of common shares at a deemed value of $0.05 per share, amounting to 2,000,000 GEMC shares.
If the option remains unexercised on the 12-month anniversary of the Effective Date, NeoLithica will be entitled to a C$100,000 cash payment. GEMC may exercise the option at its discretion within 18 months of the Effective Date by making an additional C$250,000 cash payment and, at its election, providing C$1.25m in cash and/or GEMC common shares. The share price will be determined as the greater of either the five-day volume-weighted average price (VWAP) one business day before TSXV approval of the option exercise or a minimum floor price of $0.075 per share.
The Peace River Lithium Project is located in a region known for thick, extensive, lithium-brine aquifers associated with carbonate reef formations in the Leduc Formation of the Devonian Woodbend Group. Extraction will involve drilling and pumping brine from depths of approximately 2,250m.
After lithium is extracted, the brine will be reinjected into an overlying porous aquifer, preserving the concentration of lithium in the primary producing zones. The project consists of 50 contiguous lithium-brine licences issued by the Alberta Energy Ministry, covering the Leduc Formation’s fringing reef and the overlying Wabamun Formation, which was deposited in a shallow inland sea along the Peace River Arch.
NeoLithica holds 100% ownership of these licences, and the Wabamun Formation, which contains lithium-brine with similar chemistry to the Leduc Formation, may be added to NeoLithica’s NI 43-101 resource estimation in the future.
GEMC CEO and director Mitchell Smith said: “Taking a non-operating interest option and royalty on a highly prospective lithium brine asset offers excellent optionality against a realistic current background of depressed lithium pricing and global cost inflation.
“We see Peace River as an important Canadian project that has the potential to be a strategic source of lithium as the global supply chain rebalances over time, driven by the growing criticality of locally sourced, ethically produced lithium needed to support the energy transition.”
