Globex Mining Turns Profitable – Continued Solid Results Expected in 2018
Globex Mining Enterprises Inc. (TSX: GMX – $0.41 & OTCQX: GLBXF – $0.33 & Fra: G1MN – €0.26) is a North American focused exploration and development project generator. The Company has an exceptionally well-diversified portfolio of assets, with exposure to a wide range of commodities.
The Company reported revenues for 2017 of $3,682,752 compared to revenues of $1,714,730 in 2016, up a whopping 114%. Moreover, net income in 2017 reached $754,886 compared to a net loss of $712,193 in 2016. A more that solid achievement, which is mainly the result of an increase of $2,262,815 in option and metal royalty income, as well as an offset in expenses.
As zinc prices have been trending higher to achieve multi-year highs, Nyrstar has also been successful in increasing total production output at the mines, and the total royalty payable has been increasing in tandem. Globex reported that it received the highest monthly payment so far in January, amounting to USD $177,179. While the royalty will vary from month to month, the trend is certainly positive and this cash stream is a solid contribution to the healthy balance sheet for the Company. Globex estimates it will receive net revenues of more than CDN $2 million just from the Nyrstar royalty in 2018.
Unlike investments in traditional junior resource companies where most investors speculate on the outcome of one or two projects, Globex has a much lower downside as it puts its eggs in multiple baskets, allowing them to significantly reduce the risk of the mineral exploration and development business.
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.
With several positive updates already reported early in 2018, Globex is off to a very good start. As a specialist in securing acquisitions, with its strong balance sheet, the Company should continue to be effective in restocking its property portfolio to build for the future.
Based on these calculations, we reiterate our buy recommendation for Globex Mining Enterprises with a price target of $1.16, which is 182% above today’s stock price.
Download the fourth quarter 2017 Globex Mining Company Report.
|Smallcaps.us Advice: Buy||Price Target: $2.87||Latest Company Report (pdf)|
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Thanks for the update. In the interview with Jack Stoch a few months ago he was expecting an important deal in Q1. Do you know if this deal is postponed or is it not going to take place?
Hi Deva Daniël,
Thank you for your question. Nothing has been announced about that deal yet. So we’re not quite sure if negotiations are still ongoing there. Sorry that I can’t be more of help.