"The western world is in short supply of strategic minerals, such as copper, zinc, nickel, rare earths and graphite, to power the energy transition, with recent geo-political events putting security of supply into sharp focus," AEX CEO Eldur Olafsson said.
"Southern Greenland is one of the few remaining under-explored frontiers for these vital minerals. Our exploration work so far has given us confidence that South Greenland has the potential to host world-class deposits of strategic minerals," he said.
The deal to establish the special purpose vehicle is in the form of a non-binding heads of terms and comes after more than a year of discussions.
Subject to the negotiation of final terms, ACAM is expected to invest GBP18 million (US$22 million) in exchange for a 49% shareholding in the SPV, with AEX holding the majority stake and managerial and operational control, AEX said. The company's gold assets are excluded from the JV.
And AEX expects its own contribution to be its non-precious mineral licences as well as GBP18.7 million. There is also the option for further funding of GBP10 million upon achievement of certain milestones.
AEX's strategic mineral assets cover an area of 7,615.85 kilometres2 in Southern Greenland.
"This deal puts a concrete initial value on the non-precious mineral assets in our portfolio for the first time. To reflect the broader mineral potential in AEX's portfolio, we will be changing the company's name to Amaroq Minerals Limited in the near future," Olafsson said.
AEX's share price was C$70 (US$54.66) on June 12, having risen 3% day on day. The company has a market capitalization of C$123.97 million.
