Globex Acquires Strategic Lac Fortune Gold Mine Property
Globex Mining Enterprises Inc. (CA: GMX – $0.32 & US: GLBXF – $0.20 & GER: G1MN – €0.19) has earned a reputation for shrewd and well-timed property acquisitions. This proven track record to build shareholder value through successful transactions has established a portfolio of 190 property holdings. Control of more than 50 royalties held against various properties also contributes to the overall value proposition for the Company.
This week, Globex announced yet another property acquisition to build further leverage in a prolific gold mining district. The Company reported that it has purchased 100% ownership of the Lac Fortune Gold Mine (LFGM) property, located in Quebec. The transaction was completed entirely for share capital. Globex has agreed to issue 250,000 shares in payment for the claim block. The Company also agreed to a 2% Net Smelter Royalty attached to the property, of which 1% may be purchased by Globex at any time for $200,000.
It appears that the acquisition was completed at an optimum time, as this week the spot price for gold has recovered sharply after sustaining a sharp decline earlier in March. Speculative interest for gold exploration stories tends to rise along with the price of gold itself. Globex secured this highly prospective land position at a bargain price even.
Attractive Property Acquisition with Historic Gold Resources
The LFGM property is an attractive prospect on its own merits. The 395 hectares property is located in the midst of the most productive mining district in Quebec, as the famous Cadillac Break passes through the southern edge of the property. An ideal setting for gold exploration, many profitable gold deposits have been outlined in proximity to this structural corridor.
Gold was discovered within the LFGM property area more than 100 years ago. The Lac Fortune gold mine was established in 1910 and commenced production. Thereafter, underground development continued and a total of three surface portals were eventually opened to provide access. The most recent production was halted in the 1960s although periodic exploration work continued intermittently through to the present.
For example, during the 1980s a geological study investigated the underground workings of the Lac Fortune mine, concentrating on the exposed quartz veins. Some drilling work was completed, along with sampling of exposed quartz veins. A report updated in 1987 indicated that extensive gold resources remained, including wide zones of then considered low grade mineralization.
Remnant gold resources documented from the historic mine are believed to be accurate. A deposit amounting to more than 230,000 tonnes of resources with an average grade above 5 g/t gold has been calculated based on estimates of resource zones from the old mine area but only using higher grade values in quartz veins and ignoring wide zones of low grade. This historic deposit will require confirmation work to establish as a compliant resource. Nonetheless it certainly validates the discovery potential for the project area and may serve as a head start for a modern exploration program.
Strategic Fit with Existing Assets Builds Value Proposition
While the transaction value is itself very appealing, the strategic considerations of this acquisition are also important. Globex has patiently acquired several smaller land holdings to assemble the Francoeur/Arntfield Gold Mines project. This includes three packages of claims acquired in December 2018, adding property ownership to the northwest, central, and southern sections of the overall project area.
The LFGM property boundary is situated between existing Globex land holdings. This important block of property locks up additional ownership covering roughly 6 kms of the Cadillac Break. The property may also include extensions of potential gold zones along strike from the adjacent land area. The consolidated project is therefore much more attractive for systematic exploration potential with the inclusion of this key holding.
While LFGM addition comprises a relatively small increase to the total property area, it may indeed represent a much greater overall value proposition for the consolidated project. The prospect of a significant historical gold resource that may be confirmed with additional work is also attractive. As Globex continues to outline new deposit areas and expand the total gold resources for the project, the potential to support an operating gold mine is enhanced.
Integration of New Land Package with Exploration Plans for Overall Project Area
Globex has also secured the data from previous exploration work on the property area by other operators. This information will serve to assist the current exploration team with further insight on where to focus future work programs.
In addition, an aeromag survey covering the entire Francoeur/Arntfield/Lac Fortune gold land package is pending. About 2000 linear kilometers will be targeted for aerial surveying covering the entire mineral package. This work will assist geologists to better understand the structural features and help define future exploration targets. Several high priority target areas of the Francoeur/Arntfield Mines project are currently under advancement by Globex geologists.
Extension to Normal Course Issuer Bid Approved by TSX
In an unrelated news item also reported this month, Globex announced that an extension has been granted for the Normal Course Issuer Bid (NCIB) by the TSX. Renewal of the NCIB enables the Company to continue repurchasing shares for cancellation.
Based on the policy of the TSX, Globex may repurchase on any day up to 25% of the average daily trading volume, which represents up to 4,735 shares but now doubled due to the corona virus outbreak. In total, the Company may repurchase up to 1 million shares under the terms of the NCIB. There are currently 54,381,852 shares issued and outstanding as of March 2020.
This additional buying activity may support a higher overall share price for the stock. The NCIB shall remain in effect until March 12, 2021. The program is an extension to two previously completed NCIB’s form prior years during which Globex repurchased and cancelled a total of 1,583,500 shares.
Chibougamau Intersects Highest Grade Gold To Date
In other news, Chibougamau Independent Mines Inc. (CA:CBG & US:CMAUF & GER:CLL1) completed a four hole drill program on its 100% owned Bateman Bay property, located 8 km east of the Town of Chibougamau, Quebec. The program was very successful, as CBG announced the highest grade gold values to date on the new C-3 copper/gold zone.
Hole BJ-20-29 assayed, in two separate zones between 433m and 444m deep, on average 2.40% Cu, 5.98 g/t Au, 13.03 g/t Ag and 0.024% Co over a core length of 10.65m. Note that true widths are thought to be fifty percent of intersection widths.
Hole BJ-19-27 intersected two mineralized zones returning the following assays: 2.49% Cu, 4.24 g/t Au, 11.1 g/t Ag and 0.014% Co over a core length of 9.25 m and the second zone returning 4.14% Cu, 0.55 g/t Au, 16.2 g/t Ag and 0.017% Co over a core length of 5.55 m.
Very interesting is that Globex retains a 3% Gross Metal Royalty on the Bateman Bay property and most of CBG’s mineral assets.
As the encouraging market action for gold continues to build interest for junior gold explorers, Globex has achieved a transaction to add further value to its Francoeur/Arntfield Mines project.
Globex is advancing Francoeur/Arntfield along the value curve. Key structural target areas and extensions further along strike to known gold zones add to the potential discovery value. This new acquisition, completed in a bargain price range, is perfectly timed to build further speculative upside as the next round of exploration commences at Francoeur/Arntfield.
Meanwhile, the extension granted to enable Globex to continue with its NCIB for another year, provides further support for the market value of the stock. In effect this arrangement demonstrates that management considers the share price undervalued. The NCIB is a definitive step to address that situation. Smallcaps Recommendation: BUY.
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