Announcing Execution of Definitive Agreement to Acquire Second Cobalt Project IN Sweden
NEWS RELEASE
FEBRUARY 9, 2018
www.borealmetals.com page y 1
ANNOUNCING EXECUTION OF DEFINITIVE AGREEMENT TO
ACQUIRE SECOND COBALT PROJECT IN SWEDEN
Vancouver, B.C., February 9, 2018. Boreal Metals Corp. (“ Boreal” or the “Company”)
(TSXV:BMX) is pleased to announce the execution of a definitive agreement (the “Agreement”)
with EMX Royalty Corporation (“EMX”) (NYSE American: EMX, TSXV: EMX) for the acquisition of
the Guldgruvan cobalt project (“Guldgruvan” or the “Project”) by Boreal Energy Metals Corp.
(“BEMC”), a newly created and wholly owned subsidiary of Boreal.
The Guldgruvan nr 101 license contains the historic Los Cobalt Mine, one of the better known
historic cobalt producers in the region, and is also the region where nickel was first discovered
and recognized as an element in 17511. Cobalt, copper, and nickel were mined on the property
in the 1600’s to 1750’s. In addition to these metals, gold, silver, zinc, and lead are also present
in zones of mineralization. Following the Company’s growth strategy to acquire past producing
projects, Guldgruvan, has undergone only limited modern exploration.
“Boreal continues its exploration project growth strategy with the addition of the Guldgruvan
Project. Through the acquisition of two significant past producing cobalt assets, Boreal is well
positioned in the region as Scandinavian Battery Companies are moving forward to lead Europe’s
emerging battery production sector,” stated Karl Antonius, President and CEO. “Boreal believes
the acquisition delivers significant benefits to its shareholders. Guldgruvan complements the
previously announced acquisition of Modum, which combined further builds the foundation for
Boreal’s strong base metal and cobalt exploration in Scandinavia.”
Transaction Commercial Terms
The agreement with Boreal contains the following commercial terms:
• Subject to regulatory approval, at closing, EMX will transfer its Guldgruvan exploration
licenses to BEMC.
• At closing, BEMC will issue to EMX Royalty Corp common shares of BEMC that will bring
EMX’s share of equity ownership in BEM C to 5.9%; BEMC will have the continuing
obligation to issue additional shares of BEMC to EMX to maintain its 5.9% interest in
1 Cronstedt, Axel F. (1754). “Fortsättning af rön och försök, Gjorde Med en Malm en Malm-art frän Los Kobolt Grufvor.” Kongl. Svenska
Veenskapas Academians Handlingar. 15: 38-45.
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BEMC, at no additional cost to EMX, until BEMC has raised CDN$3,000,000 in equity.
Thereafter, EMX will have the right to participate pro-rata in future financings at its own
cost to maintain its 5.9% interest in BEMC. The issuance of BEMC shares to EMX, as set
forth in the definitive agreement, is subject to receipt of TSX Venture Exchange approval.
• EMX will be granted an uncapped 3% net smelter return (“NSR”) royalty on the Project,
of which a 1% NSR royalty may be purchased by BEMC on or before the fifth anniversary
of the closing date in 0.5% increments for a total of USD$2,500,000 in cash and common
shares of BEMC stock.
• EMX will receive annual advance royalty (“AAR”) payments of USD$20,000, commencing
on the second anniversary of the closing, with each AAR payment increasing by
USD$5,000 per year until reaching USD$60,000 per year.
• EMX will also be reimbursed for its acquisition costs and previous expenditures on the
Project.
• The issuance of BEMC shares to EMX, as set forth in the Agreement, is subject to TSX
Ventures Exchange approval.
Figure 1. Location of Boreal’s Key Projects
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The Nordic Region and Battery Metals Market
The Nordic region is host to 26 active mines and seven smelters. This region has excellent
infrastructure including deep-water ports with year-round ice-free harbors, extensive roads, rail,
and access to skilled workforce, mining universities, and support services.
Northvolt AB (www.northvolt.com) has selected a location near Skelleftea, in northern Sweden
to build Europe’s biggest battery factory. Northvolt and Scania, a division of Volkswagen Truck
& Bus GmbH, announced on January 25, 2018 they have jointly agreed to develop and
commercialize battery cell technology for heavy commercial vehicles2. Northvolt plans on using
raw materials that will be responsibly and efficiently sourced as close to the mines as possible,
especially from the mineral-rich Nordic peninsula. The use of locally sourced materials avoids
conflict minerals in the supply chain.
Cobalt has many uses, but over half of the total global demand comes from the chemical sector
which uses cobalt, among other applications, for metallic cathodes in rechargeable batteries3
specifically, lithium cobalt oxide (LiCoO2) is used in lithium ion battery cathodes. Nickel-cadmium
(NiCd) and nickel metal hydride (NiMH) batteries also use cobalt to improve the oxidation of
nickel. In addition to battery usage in mobile devices, battery technologies for electric vehicles,
coupled with a worldwide shortage of ethically-sourced cobalt, have helped drive a multifold
increase in the price of cobalt as the global race to source rechargeable battery metals continues
to increase worldwide demand.
Overview of Guldgruvan Project
The 2,383 Ha Guldgruvan cobalt project is located near the town of Los, Sweden. The Project is
accessible year-round, with robust infrastructure including paved roads, power, and skilled
labour in nearby municipalities. The Guldgruvan nr 101 license contains numerous historical
workings, test pits and shallow drill holes in addition to five major mining sites, which were the
focus of historical production.
Widespread cobalt-bearing copper and subordinate nickel-zinc-gold-silver mineralization occurs
in sulphide disseminations, vein-infill, and shear zones within Proterozoic mafic and felsic
metavolcanic rocks at Guldgruvan. The cobalt-bearing occurrences define a series of parallel
2 https://www.reuters.com/article/northvolt-scania/vws-scania-backs-northvolts-5-bln-swedish-battery-plant-idUSL8N1PJ4YZ
3 https://www.thebalance.com/metal-profile-cobalt-2340131
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north-northwest trending zones of mineralization that extend for at least six kilometers across
the claim package.
Figure 2. Boreal’s Guldgruvan Land Position and historical mine workings
About Boreal Metals Corp.
Boreal is a mineral exploration company focused on the discovery of Zinc, Copper, Silver, Gold
and Cobalt deposits in exceptional, historical mining project areas spanning Sweden and
Norway. The Company aims to discover new economic mineral deposits in known mining
districts that have seen little or no modern exploration techniques. The Company is led by an
experienced management team and technical team, with successful track records in mineral
discovery, mining development and financing.
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Qualified Person
Daniel MacNeil, P.Geo, a Qualified Person as defined by National Instrument 43-101, has read
and approved all technical and scientific information related to the Modum project contained in
this news release. Mr. MacNeil is Vice President Exploration for Boreal Metals Corp.
On behalf of Boreal Metals Corporation
Karl Antonius, President
For more information on Boreal please visit the Company website at www.borealmetals.com or
contact Alexandra Woodyer Sherron at +1.604.922.8810 or [email protected].
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains certain statements that may be deemed “forward-looking statements”. Forward-looking statements are statements
that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “antic ipates”, “believes”, “intends”,
“estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur.
Although Boreal Metals Corp. believes the expectations expressed in such forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance, are subject to risks and uncertainties, and actual results or reali ties may differ
materially from those in the forward-looking statements. Such material risks and uncertainties include, but are not limited to, Boreal Metals
Corp.’s ability to raise sufficient capital to fund its obligations under its property option agreements, to maintain its min eral tenures and
concessions in good standing, to explore and develop its projects, to repay its debt and for general working capital purposes; changes in economic
conditions or financial markets; the ability of Boreal Metals Corp. to obtain the necessary permits and consents required to explore, drill and
develop the projects and if obtained, to obtain such permits and consents in a timely fashion relative to Boreal Metals Corp.’s plans and business
objectives for the projects; the general ability of Boreal Metals Corp. to drill test its projects and find mineral resources; if any mineral resources
are discovered or acquired, the Company’s ability to monetize any such mineral resources; and changes in environmental and ot her laws or
regulations that could have an impact on the Company’s operations. Forward-looking statements are based on the reasonable beliefs, estimates
and opinions of Boreal Metals Corp.’s management on the date the statements are made. Except as required by law, Boreal Metal s Corp.
undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other
factors, should change.