Attractive Property Acquisition with Leverage to Antimony Reported by Globex Mining
The successful project generator business model employed by Globex Mining Enterprises Inc. (CA: GMX – $0.84 & US: GLBXF – $0.67 & GER: G1MN – €0.54) has resulted in a steady pace of property transactions in recent years. The renewed bull market for mineral resources has certainly contributed favorable conditions for the strategy.
This week Globex announced yet another transaction, as it acquired an advanced property notable for an enriched antimony deposit. Globex purchased 100% ownership of the Bald Hill project, located in New Brunswick. The property is comprised of 26 claims located approximately 60km southeast from the major city of Fredericton. The project area includes the historic antimony deposit along with land holdings surrounding the zone that is believed to represent excellent exploration potential.
In addition, a separate package of 8 claims was also purchased in this deal, adjacent to Globex’s Devil’s Pike gold property (+100,000 oz. Gold). The Company has now established a core operating area within New Brunswick, including ownership of several other projects located nearby.
Leverage to Antimony Builds Diversified Value Proposition
Antimony is considered a strategically important metal. Perhaps 180,000 tons of antimony is produced worldwide each year. China is the dominant producer with roughly 80% of the world supply. However, China has restricted output of certain projects and begun limiting exports. Mine supply is also sourced from a handful of other producing nations including Russia, Bolivia, India and Mexico.
There are multiple industrial and manufacturing processes that demand antimony as a raw material. The most important consumption is related to fabrication of flame retardants incorporated in a variety of consumer goods. Enhanced electrical conductivity has advanced the manufacturing of batteries using antimony. The metal is also combined with lead to form an alloy that is harder and more durable. This alloy is ideal for weapons grade applications and the production of military ordinance.
Since almost all of the antimony consumed in the United States must be imported, the metal is among a group of elements that is deemed critical to US interests. Further evaluation of the strategic importance may determine that the lack of production sources for antimony within North America represents a significant risk. This designation would create added value for advanced antimony deposits such as Bald Hill and serve as an incentive towards mine development.
Historical Exploration Work Outlined Attractive Potential Stibnite Resource Zone
Stibnite (Sb) is a primary mineral of antimony. Deposits enriched in Sb are considered the most important for antimony mining. An attractive Sb resource was outlined at Bald Hill during historical work programs completed by a previous operator. Rockport Mining Corp. conducted advanced fieldwork targeting a surface showing of Sb alteration more than a decade ago. A series of trenches were excavated across the alteration zones. Samples extracted from these trenches achieved high grade assay results, including an interval of two meters with an average grade of 43%Sb. One other high grade interval of 8.18m carried an average grade of 2.9%Sb.
Thereafter, Rockport commenced a drilling program amounting to 3,554m in 16 widely spaced drill holes. Multiple drill holes encountered Sb alteration, including a highlight interval of 4.51m bearing 11.7%Sb. An enriched zone extending roughly 450m along strike was defined from this work. Rockport subsequently filed a technical report for Bald Hill that presented a potential deposit of 725,000 to 1,000,000 tonnes with a grade above 4.11%Sb. This deposit is considered conceptual in nature, and additional work is required to accurately document a mineral resource.
Moreover, Globex has secured access to detailed historical data for the project and surrounding property area, comprising some 16,500 files that will support future exploration efforts at the project. Combined with the previous exploration work, an interpreted strike length for the resource zone extends approximately 700m in strike. This is well beyond the scope of the previous drilling area. The mineralization has been followed by drilling to a depth of 300m within the conceptual shell of the deposit and is open to depth and along strike. In addition, more recent fieldwork completed in 2014 outlined the potential for a larger extension of the strike length with Sb alteration showings encountered in trenching more than a kilometer from the original target area.
Outstanding Discovery for Excellon Resources at Silver City
Excellon Resources Inc [EXN], Globex’s option partner for the Silver City project in Germany, announced more assay results from its 2020 drill program. Especially results from Grauer Wolf target stood out with 1,043 g/t silver equivalent over 1.3 metres (954 g/t Ag, 0.1 g/t Au, 0.7% Pb and 2.0% Zn), within 194 g/t silver equivalent over 8.1 metres.
Ben Pullinger, SVP Geology & Corporate Development at Excellon commented, “This high-grade silver discovery at Grauer Wolf adds a fourth priority area for follow-up in our 2021 drilling program at Silver City. The discovery is on a geological contact that saw little historical mining, opening up a parallel strike for additional potential discoveries. Drilling to date has confirmed high-grade silver mineralization over 12 kilometres of strike within 36 kilometres of strike potential on the project, demonstrating the impressive scale of this epithermal silver system.
In September 2019, Globex vended the property to Excellon. Over the 3-year term of this deal, the total cash payments amount to $500,000, while the total payment in Excellon shares issued to Globex was worth C$1.6 million when the agreement was signed. In addition, Globex retains a Gross Metals Royalty (GMR) of 3% on all precious metals production at Silver City, and a 2.5% on all other metals. The GMR leverage alone may amount to a significant value proposition to Globex shareholders.
With the acquisition of the Bald Hill project, Globex has now established leverage to yet another strategically important resource. This is an advanced prospect with a defined deposit area. Preliminary processing and metallurgical test work has also been completed. Additional exploration work may expand the historic resource zones and build more attractive economic potential.
The Company will look to vend the property in a pending transaction if a deal is presented at favorable terms. Globex has demonstrated the core competence to realize capital gains through partnerships and outright dispositions. This has contributed to the value proposition for the Company through the early phases of this resource bull market. Alternately, Globex may advance further exploration work at Bald Hill, to optimize the resource definition. Preliminary exploration would involve completing a detailed aeromagnetic survey, followed by a program of fieldwork including stripping, mapping and sampling.
As a leading project generator in Canada, Globex now controls an astonishing portfolio of 192 resource interests including and ownership of 71 royalties. Internal diversification to multiple resources has positioned shareholders to a stronger value proposition. With a balance of 96 gold projects, 60 base metals properties, and 36 prospects with leverage to specialty metals such as antimony, the Company is able to participate in the many subsectors that are now at the forefront of investment activity.
It should come as no surprise that shares of Globex have now tripled in value during just the last year. Shareholders are the beneficiary of a long term strategy to build value through successful transactions and successful exploration activity. The royalty portfolio continues to generate income, highlighted by payments received from Nyrstar and the strong zinc spot price. The outlook for further gains is attractive as the resource bull market remains the dominant theme of 2021. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $2.87||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|