Metal Energy acquires SourceRock lithium brine project, Ontario
Metal Energy Corp. [MERG-TSXV; MEEEF-OTCQB] acquired a new project (SourceRock) prospective for lithium (Li) brines in the Thunder Bay-Nipigon area of Northwestern Ontario. The project is exceptionally large, covering 913 km2 within an area measuring approximately 10 to 20 km wide by 95 km long.
“The SourceRock Li brine project covers a dominant land position of untested regional lithium brine targets within the Proterozoic Sibley sedimentary basin that is on a regional-scale equivalent in size to Chile’s Salar de Atacama central salt body, the largest Li brine producing jurisdiction in the world. Not only do we have a large aerial coverage, SourceRock covers the deepest parts of the basin with sedimentary thickness ranging from 500 m to 1,000 metres, enhancing Li brine prospectivity.
“Exploration in the area has reported considerable evidence of supersaturated saline solutions within the basin sediments and even the underlying Li-pegmatite-rich basement rocks. Halite (sodium, Na) and sylvite (potassium, K) veins, bedded layers, interstitial cements, and even encrustations on drill core and drill rods have all been mentioned in a variety of reports. Both Na and K are important pathfinders for Li within brine solutions, and higher concentrations of each of these elements supports the potential for higher concentrations of Li. With drill permits already in hand, we are very excited to advance the SourceRock project with our first drill program,” said James Sykes, CEO.
SourceRock is a drill-ready project with an exploration permit already in hand from the Ontario Ministry of Mines for up to 20 drill pads. Initial geophysical data compilation has already identified saline brine drill targets on the project. The company is currently engaged with local indigenous groups, communities and stakeholders, and anticipates a drill program to commence after sufficient and meaningful consultation has been completed.
On June 16, 2023, Metal Energy entered into an option agreement with an arm’s-length vendor to acquire an undivided 100% interest in SourceRock. Upon execution of the option agreement, the company completed a $50,000 cash payment to the vendor and committed to a staking program valued at greater than $100,000 representing 2,000 claim units registered under the company.
Under the remaining terms of the agreement, the company must issue 3 million common shares of Metal Energy upon acceptance of the option agreement by the TSX Venture Exchange; 1.5 million warrants to the vendor. Each warrant is exercisable to acquire one common share of the company at an exercise price of 10 cents per share. The warrants will expire after 36 months from the effective date; and $500,000 worth of common shares on or before the first anniversary of the effective date.
Metal Energy will be the operator of the project and as such will have the rights and responsibility to execute all work programs on the project.
The vendor has retained a 3% net smelter returns royalty as part of the option agreement. The company has the right to purchase 1 per cent of the royalty for $500,000 up until the fourth anniversary of the effective date. Upon completion of the first 1% of the royalty, the company retains the right to purchase the remaining 2% of the royalty for $5-million up until the 10th anniversary of the effective date.
SourceRock encompasses 91,288 hectares within the Proterozoic Sibley sedimentary basin, Thunder Bay-Nipigon area, Ontario. The project has excellent access to infrastructure and capacity that has supported previous exploration programs and mine development, including year-round highway, railway and seaport access, with power and natural gas lines crossing the project.