Globex Mining Adds Another $1,000,000 To Its Bank Account

Globex Mining Enterprises (CA: GMX – $1.18 & US: GLBXF – $0.94 & GER: G1MN – €0.77) is truly on a roll. After vending its Francoeur/Arntfield/Lac Fortune (FALF) gold property and Middle Tennessee Mines Royalty for over $30 million earlier this year, it now has sold its Tarmac Gold Property to Wesdome Gold Mines [WDO] for one million dollars and a 1% Gross Metal Royalty.

Located in Dubuisson Township, Quebec, the Tarmac Gold Property consists of 6 claims covering 94 hectares entirely surrounded by Wesdome’s Kiena Mine Complex and less than 2 kilometers northeast of the Kiena underground mine. Previous drilling by Globex in 1996 returned numerous gold intersections such as holes TM-10 (14.22 g/t Au, 84.1 g/t Ag and 6.49% Cu over 1.2 m) and TM-24 (29.92 g/t Au and 22.4 g/t Ag over 2.24 m).

The Kiena Mine Complex Project is a gold property located in the Province of Québec, in the Abitibi region within the limits of the town of Val-d’Or. As of October 29, 2019, the Kiena Mine Complex property consists of 183 mining claims and one mining concession.

The Complex is a fully permitted, integrated mining and milling infrastructure, which includes a 930 m production shaft and a 2,000 tpd mill. From 1981 to 2013, the mine produced 1.75 million ozs of gold. The bulk of this production came from the S-50 Zone between depths of 100 m and 1,000 m.

In 2013, operations were suspended due to a combination of the declining gold price and lack of developed reserves. The infrastructure has been preserved on care and maintenance status and the underground workings have never been flooded. Since 2015, Wesdome has been continuously exploring the Kiena deposit and in 2016 discovered the Kiena Deep A Zone, which remains a focus of underground exploration.

The goal is to resume mining operations at Kiena in the coming weeks. Although more exploration work will need to be conducted on the claims that Globex sold, it is fair to assume that over time the 1% GMR will provide an additional source of income for Globex.

Adding More Cash to the Balance Sheet

The deal with Wesdome Gold Mines was closed on the heels of Globex’s $15 million sale to Yamana Gold Inc. [YRI] of the Francoeur/Arntfield/Lac Fortune gold property in Abitibi, Québec as well as 30 claims in Beauchastel township and three claims in Malartic township, Québec. The FALF property adjoins Yamana’s Wasamac Gold Mine project.

At the closing of the FALF sale, Globex received an initial payment of $4,000,000 from Yamana, satisfied by Yamana issuing 706,714 shares to Globex at a deemed price of $5.66 per share. Also, Yamana will make the following additional cash payments to Globex on the:
– first anniversary of closing: $3,000,000
– second anniversary of closing: $2,000,000
– third anniversary of closing: $3,000,000
– fourth anniversary of closing: $3,000,000

Moreover, Globex retains a 2% Gross Metal Royalty (GMR) on all mineral production from the properties, of which 0.5% may be purchased by Yamana for $1,500,000.

And in March of this year, Globex reached an agreement to vend the Middle Tennessee Mines Royalty (MTM) to Electric Royalties Ltd [ELEC]. The parties agreed that in return for the royalty, Globex would receive 9 million shares of ELEC (today worth $3.375 million) plus a further 5.5 million common share purchase warrants that enable Globex to purchase additional shares of ELEC at the exercise price of 60 cents per share. Globex is also to receive a total cash payment for the deal of $13.75 million, of which $250,000 has already been paid.

Conclusion

Although Globex’s stock price has already risen 150% since July 2020, there are many positive catalysts in play that support a much higher share price still. By accumulating out of favor properties when resource markets were down, the Company is now fully leveraged to the ongoing resource bull market with one of the most diverse portfolios of attractive projects in the junior mining sector. We’re convinced that many more lucrative property deals are in the pipeline. Smallcaps Recommendation: BUY.

Smallcaps.us Advice: BuyPrice Target: $2.10Latest Company Report (pdf)
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