Enforcer Gold Corp (TSX-V: VEIN), which is advancing Globex’ (TSX: GMX – $0.54 & OTCQX: GLBXF – $0.39 & Fra: G1MN – €0.35) Montalembert high-grade gold property, raised close to $5 million in a non-brokered private placement. The additional cash injection makes Enforcer a very well-financed company, knowing that it already had more than $3.6 million in the bank late January 2017.
Enforcer Gold issued: 8,701,200 units at a price of $0.20 per unit, for proceeds of $1,740,240; and 12,960,000 “flow-through” common shares, at a price of $0.25 per flow-through share, for proceeds of $3,240,000. Each unit consists of one common share and one-half of one common share purchase warrant. With each warrant, one common share of the company can be acquired at a price of $0.30 for a period of 24 months.
Flow-through shares entered the Canadian tax code about 30 years ago. It’s a tax-based financing incentive that is available to certain corporations in the mining, oil & gas, renewable energy, and energy conservation sectors.
Canada’s Income Tax Act allows companies to agree that they will transfer or “renounce” their exploration expenses to individual investors. Companies that have revenue may not wish to do this, since they’ll want to apply those expenses against their income to reduce or eliminate their own tax liabilities. However, a junior exploration mining company doesn’t need those expenses (deductions) because they’re likely not profitable and won’t be facing any income tax. It therefore makes sense to pass on those expenses to individual investors, who will happily apply them against their personal incomes.
The company intends to use the proceeds of the financing for exploration on the high-grade Montalembert Gold Project located in Quebec’s prolific Abitibi greenstone belt and for general working purposes.
Enforcer Gold is earning a 100% stake in the 7300-square hectare Montalembert project. In order to do so, Enforcer is 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, if Enforcer is successful and it earns a 100% interest in the property, Globex retains a 3.5% gross metal royalty, except for the first 150,000 ounces of gold production, where it retains a 6.5% gross metal royalty.
Work At Montalembert Started
Enforcer Gold has committed over $2.2 million to fund its 2017 exploration program which includes; data compilation, ground and airborne geophysics, stripping of overburden, mapping, prospecting, channel sampling, RC and diamond drilling.
In fact, it recently completed a very high resolution aeromagnetic survey over the entire 7,300-hectare property. Over 1,800 line kilometers were flown at a 50-meter line spacing. The detailed magnetic coverage will be a major tool for Enforcer’s exploration team in delineating structural features of folding, shearing and faulting, which the company believes are key controls to gold mineralization on the property.
Once interpretation of the new high-definition magnetic data is completed, prospecting crews will set out to ground-truth anomalies in preparation for follow-up exploration including diamond drilling.
The program will begin in a couple of weeks with surface work near the Galena and No. 2 veins and will include increasing the exposure of the veins along their north and south strike directions with accompanying additional channel sampling. As of June, Enforcer anticipates drilling 6,000 to 8,000 meters using a diamond drill rig and up to 1,000 meters using a reverse circulation rig. Drilling will initially test four high-priority targets based on the company’s review of historical data.
Steve Roebuck, the President and CEO of Enforcer Gold, commented, “The property is underexplored in terms of modern exploration techniques, and the high-grade showings – two recent channel samples from the Galena vein assayed 510.79 grams per tonne Au over 1 meter and 118.79 grams per tonne Au over 1 meter – have not received the level of investigation commensurate with their potential. The 2017 program is designed to explore the property in a methodical and systematic way, increasing our knowledge of the controls to mineralization in area and expanding and prioritizing targets for diamond drilling.”
Deane-Cadillac Property Agreement
In another noteworthy event, Khalkos Exploration (TSX-V: KAS) obtained the exclusive right from Globex to acquire 100% of the Deane-Cadillac property, located in Cadillac Township, Quebec.
To obtain 100% of this property’s mining rights, Khalkos will need to issue 175,000 common shares and pay an amount of $10,000. Globex will keep a 2% Gross Metal Royalty.
The Deane-Cadillac property is constituted of three claims covering an area of 143 hectares. They are adjacent to Khalkos’ existing Malartic mining camp (see map below). Thanks to this acquisition, Khalkos now controls 85 continuous claims, in one of the most active gold mining camps in Canada.
In fact, The Malartic property is located close to major gold producers in the heart of the Cadillac deformation zone. It is located at only 2 km from the Lapa mine and 20 km from the Laronde mine (both owned by Agnico Eagle), and 11 km from the Canadian Malartic mine (owned by Yamana and Agnico Eagle).
In historical drilling, the Deane-Cadillac claims have assayed 3.43 g/t Au over 0.80 m and 19.50 g/t Au over 0.30 m. These showings were located in the same sequence of sedimentary rocks as the Sediment Zone present on Khalkos’ claims. Selected samples from the Sediment Zone yielded gold grades up to 28.60 g/t while historical drilling undertaken in 1985 intersected up to 32.60 g/t Au over 2.40 m including 124.00 g/t Au over 0.70 m.
Khalkos plans to commence work on the Globex claims during the upcoming summer months.
Both the excellent financing from Enforcer Gold, as well as the new agreement with Khalkos, prove once again the value of Globex’ property portfolio. Globex is advancing those properties, either to production or to ready them for optioning, joint venturing, or outright sale to a third party resource company.
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. Recommendation BUY.
|Smallcaps.us Advice: Buy||Price Target: $1.21||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|