Globex Mining Enterprises Inc. (TSX:GMX – $0.54 & OTCQX:GLBXF – $0.43 & Fra:G1MN – €0.40) is a North American focused exploration and development project generator. A project generator’s business model is to acquire mineral properties, and to advance them, either to production or to ready them for optioning, joint venturing, or outright sale to a third party resource company.
The Company has been active for many decades and has proven that it can survive the downturns in the market. In fact, downturns are often the Company’s best years to acquire assets. During the past commodities crisis, Globex acquired many assets almost for free, that are now already generating income.
Unlike investments in traditional junior resource companies where most investors speculate on the outcome of one or two projects, Globex has a much lower downside as it puts its eggs in multiple baskets, allowing them to significantly reduce the inherent risk of the mineral exploration and development business.
Therefore, an investment in Globex is ideal for investors seeking exposure to the commodities markets and the resource sector without having to bet on the outcome of a single or handful of projects.
Revenues in the third quarter of 2016, ended September 30, 2016, were $452,305 compared to $31,569 in the third quarter of 2015. Based on these numbers the commodities rebound is obvious. Moreover, Globex’s royalty income is expected to significantly rise in the following quarters, as a number of projects are expected to be taken (back) into production.
Due to the solid outlook for commodities, we expect that Globex will experience much more optioning activity the coming quarters and that a few of its projects will be brought (back) into production, which will generate royalty income. All in all, we’re convinced that there will be several catalysts for Globex’ share price to rise over the next 12 months.
Based on our outlook and calculations, we initiate coverage of Globex Mining Enterprises with a buy recommendation and a price target of $1.10, which is 103% above today’s stock price.
|Download the third quarter 2016 Globex Mining Company Report.|
|Smallcaps.us Advice: Buy||Price Target: $1.19||Latest Company Report (pdf)|
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