Globex Acquires Significant Royalty Package Related to the Rouyn Merger Project
Earlier this summer Globex Mining Enterprises Inc. (CA: GMX – $0.98 & US: GLBXF – $0.79 & GER: G1MN – €0.66) reported what appeared to be a relatively minor transaction to acquire the Rouyn Merger gold property in Quebec. Comprising 49 claims, covering an area of more than 1,500 hectares, Rouyn Merger is situated within the prolific Abitibi Greenstone Belt. This world famous gold producing district is highlighted by the Cadillac Break structural trend. Rouyn Merger straddles this important geological feature. Approximately 6.5kms of the Cadillac Break extends along strike through the property area. Several known gold bearing zones in proximity to this structure have been identified that serve as primary exploration targets.
Following the reported transaction, the Company commenced a thorough review of historical exploration data. This work included an airborne geophysical survey completed in 2015 by a previous operator. Compilation of a 3D model of the property is in process to identify drilling targets. Appealing prospects are emerging within relatively shallow structural zones encountered during previous drilling work. Globex opted to update the data with a higher resolution aeromag survey generated by a closer flight pattern. The results of this program are expected within two weeks and will further augment the target selection process.
As part of the review, Globex also tracked down the decedents of two prospectors, who owned a 2% Gross Metal royalty on the Rouyn Merger Gold Property and some other interests within the Abitibi Greenstone Belt. This week, Globex reported that it has purchased this royalty package held by the Quebec prospectors. The Company, issued 150,000 common shares in payment for this acquisition.
New Royalty Package Compliments Existing Holdings within the Abitibi Greenstone Belt
The royalty interests purchased through this transaction enable the Company to cancel the outstanding obligation on the Rouyn Merger property. By doing so, Globex adds to the value of the project because the deal effectively makes this property more attractive for a potential JV deal or outright sale of the asset to a third party. The only other outstanding royalty currently held against the property is a 1% NSR that was retained by IAMGOLD Corporation when it sold the project to Globex. Click here to view map.
Following this deal, Globex now also controls royalty leverage to the northwest on a group of claims held by Falco Resources Ltd. This land package is highlighted by the underlying Flavian tonalite, an attractive target area notable for hosting several high grade gold deposits. Numerous showings of gold and base metals mineralization have been encountered within the plutonic and volcanic host rock within the royalty property area.
Of greater interest, Globex’s new royalty holdings also include the Heva-Hosco gold project owned by Hecla Quebec Inc. Located adjacent to the eastern boundary of the Rouyn Merger property, the advanced Heva-Hosco project includes compliant gold resources amounting to 1,278,000 ounces of gold (M&I) plus a further combined Inferred resource of 879,000 ounces. Hecla believes further upside potential to expand this resource may be demonstrated through future exploration plans. As the published gold resources for the project increase, the value of the 2% GMR royalty will also increase along with the potential that a significant mining operation may be established.
Globex actively manages its property holdings, complimented by a substantial suite of royalty interests. Successful exploration programs often contribute to attract JV partners or enable the assets to be sold to a third party for a higher value. This integrated strategy is illustrated by the ongoing evolution of the Rouyn Merger project. The transaction to secure this package of additional royalty holdings builds a complimentary value opportunity.
Globex is now preparing to launch an exploration program. Data compilation continues, to assemble a more coherent model of the underlying geology. The Company also plans to update surface mapping before the first snowfall of the season begins. This work is well timed as the ideal conditions for completion of a drill program are often during the winter months in this part of Quebec.
The Company also controls several other royalty interests elsewhere in the district. These royalties provide leverage to many different metals and minerals in this productive mining camp. Several of the projects covered by these royalty interests are advanced and many include past producing mine workings. The prospect that these individual properties may achieve production in the years ahead contributes to the value proposition for the royalty portfolio.
A patient strategy to build leverage in one of the most exciting exploration districts in Canada continues to pay off for Globex shareholders. The acquisition of the Rouyn Merger property and the subsequent transaction to secure royalty interests were achieved at minimal cost. However, this process to advance the core holdings may generate significant value that establishes the foundation for a premium transaction involving this project in the future. A successful transaction history throughout the year has already established momentum for Globex as one of the most attractive junior mining stocks. The Company is well-positioned to continue this winning streak. Smallcaps Recommendation: BUY.
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