Globex Raises Funds at 54% Premium

Globex Raises Funds at 54% Premium post image

Globex Mining Enterprises (TSX: GMX – $0.48 & OTCQX: GLBXF – $0.39 & Fra: G1MN – €0.34), a well-known project generator that owns a well-diversified portfolio of North American mid-stage exploration, development and royalty properties, has completed a private placement of 1,119,718 shares at a price of $0.71 per share for total proceeds of $795,000. The transaction price represents an astonishing 54 percent premium to Globex’ previous day closing price of $0.46.

This premium is a testament of the significant undervaluation of Globex’ stock price and the solid confidence of the new investor that better times are ahead.

Meanwhile, several properties of Globex that have been optioned to third parties continue to be advanced, which is also good news for the Company as it typically receives a mix of cash, shares, and royalties from its option partners.

Nyrstar’s Mid Tennessee Mine Back in Production

Nyrstar’s (OTC – NYRSY) Mid Tennessee zinc mine is back in operation since May 2017. It was shut down in 2015 due to low zinc prices. Now that zinc has significantly recovered to $1.23 per pound, up 50% from $0.82 per pound last year in March, Nyrstar restarted mining and processing operations.

Globex is entitled to a 1.4% royalty when LME zinc prices are at or over US$1.10 per lb, and a 1% royalty when the zinc price is between US$0.90 and US$1.09 per lb.

Mid Tennessee is scheduled to reach full production capacity of 50kt per annum of zinc concentrate by November 2017. At full capacity, Globex anticipates receiving royalty payments from Nyrstar of over $1.5 million per year.

In May 2017, Nyrstar also published an updated resource for its Mid Tennessee mine.

Tonnes
(million)
Zn Grade
(%)
Proven Reserves 0.06 4.40
Probable Reserves 2.32 3.50
Total Reserves 2.38 3.50
Measured Resource 0.14 4.00
Indicated Resource 3.27 3.50
Total M & I 3.41 3.50
Inferred Resource 16.32 3.40
Mid Tennessee resource update. Source: Company press release.

Drill Rigs Turning at Multiple Properties

RJK Explorations Ltd. (TSX-V: RJX.A) reported additional results from its ongoing 5,000 meters drill program on the Maude Lake Gold property, located northeast of Matheson, Ontario.

Attractive initial results were published back in March 2017. Now hole RJK-17-06 assayed 12.6 meters grading 4.50 g/t Au.

Hole
Number
From
(meters)
To
(meters)
Length
(meters)
Au Grade
(g/t)
RJK 17-06 390.6 392.4 1.8 1.15
  399.5 401.0 1.5 1.66
  425.2 437.8 12.6 4.50
including
425.2 425.6 0.4 121.00
  545.3 549.7 4.4 3.04
Maude Lake property drill results. Source: Company press release.

Hole RJK-17-06 was drilled to test historic hole 85-06, which at the time reported 17.56 g/t Au over 8.08 m. It intersected the gold zone at approximately the same elevation as the intersection in 85-06 but 15 meters to the north.

RJK is currently also drilling a 1,000 meters hole on Maude Lake to test a large geophysical anomaly in an area that has never been drilled before.

In May 2016, Globex signed an Option Agreement with RJK, under which the latter may earn a 100% interest in the Maud Lake Property by making ongoing annual payments of $250,000 (the next payment is due on July 16, 2017) and reserving a 2.5% Gross Metal Royalty for Globex, 1% of which may be purchased for $2 million.

Also Tres-Or Resources Ltd. (TSX-V: TRS) reported results from its first phase drill program at its Fontana Gold Project in Quebec. Results from the first two drill holes are as follows:

Hole
Number
From
(meters)
To
(meters)
Length
(meters)
Au Grade
(g/t)
F17-01 52.50 53.00 0.50 46.11
  215.45 216.45 1.00 10.41
F17-02 69.00 76.00 7.00 2.99
including
71.00 72.00 1.00 15.91
  224.00 226.00 2.00 0.88
Fontana Gold property drill results. Source: Company press release.

This first part of the drill program was intended to confirm strong gold mineralization reported from the Hooper and Bunkhouse Zones based on historical drilling. Some of the best reported intersections from more than 300 historical drill holes at Fontana are from near the intersection of the Hooper and Bunkhouse zones, including 17.5 g/t Au over 38.1 m (192.9 m to 231.1 m in drill hole JB200B) and 17.1 g/t Au over 13.7 m (165.6 m to 179.4 m in drill hole JB200).

The drill program has completed 4 holes totaling 897 m to date. Results from the 3rd and 4th holes will be provided when available.

Tres-Or was granted an option in 2011 to acquire Globex’ interest in the Fontana Gold Project, being a 75% interest in 16 claims and a 100% interest in a further 6 claims. Globex retains a 3% Gross Metals Royalty on all claims and the 75% interest in the 16 claims optioned by Globex is also subject to a 15% Net Profits Interest (NPI).

In order to exercise the option, Tres-Or is required to pay Globex $300,000 (paid) and is also required to purchase the NPI from Globex for a total of $1,200,000 (partially paid).

Finally, at the East Cadillac Gold Project in Quebec, which is optioned by Chalice Gold Mines Limited (TSX-V: CXN), drills have been employed since a few weeks.

No actual results have been published yet, Chalice did indicate that early stage drilling has intersected high-grade gold within broader zones of lower-grade mineralization.

Also, in April an airborne magnetic-electromagnetic survey was flown over the property to discover additional high priority structural positions.

Interestingly, a mineral resource estimate was recently published by Chalice for the Nordeau West gold deposit one of two deposits on the Globex claims.

Chalice has an option to earn a 100% interest in the Nordeau property from Globex Mining in exchange for cash payments totaling $590,000 over 4 years ($120,000 received to date), undertaking $2,500,000 in exploration over 4 years and a 3% Gross Metal Royalty.

Pre-Drilling Activities on Other Properties

Enforcer Gold (TSX-V: VEIN), which is earning a 100% interest in the 7300-square hectare Montalembert project in Quebec, commenced a ground Induced Polarization (“IP”) geophysical survey at the property. The 45 line-km survey will cover an approximately 1.5 x 1.5 km (0.87 square miles) area over the main Galena and No 2 vein gold bearing vein systems.

IP is one of the most useful geophysical methods in mineral exploration due to its ability to detect and characterize sub-surface disseminated mineralization. It can be particularly useful in mapping the extension of a conductive mineralized zone under overburden cover, making it a valuable tool to aid in drill targeting. The 45 line-km survey is expected to be completed ahead of the start of an extensive drill program.

In order for Enforcer Gold to obtain a 100% stake in the property, it’s required to:
• Pay Globex $2.6 million over a four year period;
• Issue Globex 8.5 million shares of Enforcer’s common stock; and
• Undertake $15 million in work.

Moreover, should Enforcer acquire the property, Globex will retain a Gross Metal Royalty (GMR) of 6% on the first 150,000 ounces of gold produced (9,000 ounces) and 3.5% GMR thereafter.

Finally, back in April 2017 Khalkos Exploration (TSX-V: KAS) obtained the exclusive right from Globex to acquire 100% of the Deane-Cadillac property, located in Quebec.

Only a few weeks later, Khalkos entered into an option agreement with Dundee Precious Metals Inc. wherein Dundee may earn up to 71% interest in Khalkos’ Malartic property, which includes Globex’ three royalty claims, by incurring exploration expenditures totaling $6 million. It is expected that Dundee will conduct work on Globex’ claims.

To obtain 100% of this property’s mining rights, Khalkos issued 175,000 shares and pay an amount of $10,000 to Globex. Globex retains a 2% Gross Metal Royalty.

Conclusion

The proceeds of the private placement will be used to advance some of the Company’s most attractive properties to ready them for optioning, joint venturing, or outright sale to a third party.

The adjacent Francoeur-Arntfield gold properties, for example, demonstrate the potential for a large tonnage low grade near surface gold deposit. The Company will conduct several hundreds of meters of trenching. In addition, it will map, strip and channel sample a large outcrop area in an initial exploration program.

At the Normetmar zinc deposit in Quebec, Globex has begun acquiring and compiling data from previous work conducted on the property with the intention of initiating an exploration program this summer.

Several more projects are scheduled to be advanced during the coming months.

The expected royalties from Nyrstar’s Mid Tennessee mine will most definitely also contribute to Globex’ expansion of its already diverse asset portfolio. Most likely, they will also make Globex profitable, similar to the previous quarter, an exception among many companies in the mining industry. Recommendation BUY.

Smallcaps.us Advice: BuyPrice Target: $1.08Latest Company Report (pdf)
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2 comments… add one
  • Chris Johnson July 16, 2017, 1:02 am

    John,

    The market still hasn’t recognized the real value of TGEN. We are ahead of the game and when it happens, TGEN will explode like a bomb(go up in price).

  • John Peters (editor) July 16, 2017, 11:57 am

    Hi Chris,

    You are absolutely correct. Tecogen is a tremendously undervalued company. It has a solid business, which is growing and in addition it has several projects under development that could make it a world class player.

    Be a bit more patient. We will get there!!

    Cheers,

    John

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