Globex News Flow Highlighted by $645,000 Payment from Transaction Partner
Like the gift that keeps on giving, Globex Mining Enterprises Inc. (CA: GMX – $0.90 & US: GLBXF – $0.68 & GER: G1MN – €0.63) shareholders continue to benefit from previously arranged property transactions as partner companies work independently to advance these projects. The deal structure for these projects usually involves additional payments of cash and shares to Globex for several years following a transaction.
As active exploration successfully expands the documented resources, the potential is enhanced for development of producing mines. Thereafter the usually retained royalty leverage becomes a valuable component for Globex.
Already this month, two partner companies have provided updates involving projects vended by Globex last year. Emperor Metals Inc. [AUOZ] is planning a major drilling campaign at the Duquesne West / Ottoman Property and has issued a significant payment to Globex as part of the transaction to secure this project. Meanwhile, Maple Gold Mines Ltd. [MGM] has been engaged in ambitious exploration activity at the Eagle Gold Mine project. Another batch of assay results was reported by Maple, along with commentary to suggest that ongoing drilling work is expected to yield further progress to outline a much larger resource. These updates in turn build on the bullish outlook for Globex shareholders.
Option Payment Issued by Emperor Metals to Globex
The last two years were exceptional in the corporate evolution for Globex. Several high-value transactions were announced that involve option payments to the Company, structured over several years. These deals also ensured commitments by partner companies to continue funding exploration work. This week, Globex reported it has received a scheduled installment payment from Emperor that was due as part of the Duquesne West / Ottoman property option deal announced late last year. Under the terms of the deal, Emperor is required to issue a series of payments totaling $10 million in cash plus 15 million shares, structured over a 5-year term.
The payment reported by Globex this week included $450,000 in cash plus 1.5 million shares of Emperor, currently worth $195,000. These installments are paid to Duparquet Assets Limited, a private company jointly held by Globex and Geoconseils Jack Stoch Ltd. (owned by the current CEO and President of Globex). The payments to Duparquet are shared on a 50-50 basis with Globex based on the ownership structure of the property prior to the transaction with Emperor. A Gross Metals Royalty of 3% is also retained on the property.
Emperor also agreed to fund at least $12 million in exploration expenditures on the property during the term. The company is planning a drilling program to commence in the second quarter of this year as the first phase of that commitment. There is a historical inferred mineral resource documented by a previous operator of the property that reported 727,000 ounces of gold. An updated compliant resource report shall be compiled by Emperor prior to the end of the option term. If the combined gold resources documented for the project amount to at least one million ounces of gold a further payment of 2.5 million Emperor Shares shall be issued to Globex.
Ongoing Exploration at Eagle Gold Mine Property Achieves Notable Gold Values
Historic gold production within the Abitibi Greenstone Belt of Quebec is well documented. The district ranks among the top mining regions in Canada. Maple Gold endeavored to assemble core exploration property interests based in part on the track record of successful mine development in the area. Joint-venture partnerships for the Douay and Joutel Gold Mine projects had been arranged with Agnico-Eagle Mines Limited. Thereafter the company advanced through an option deal with Globex to acquire 100% ownership of the Eagle Gold Mine project as an adjoining land package.
Each of these three gold projects is highlighted by established gold resources and extensive infrastructure, including historic mine workings. Maple is now in the midst of an aggressive exploration effort spanning all three properties. Successful exploration activity builds the gold resources for the core area and supports the longer term objective for Maple to re-establish active gold mining operations.
Maple now reported additional assay results from ongoing drilling at the Eagle Gold Mine property area. The full assay results have now been received for five drill holes completed so far. Among the notable intervals, one section of drill core spanning 7.8 meters averaged an impressive 10.3g/t gold. This included a higher grade subinterval of 41.1g/t gold that was encountered within a meter of drill core. No fewer than seven separate gold-bearing intercepts were identified within 120m of this drill core. The target section was located down dip from previously mined areas.
This successful extension of the resource further to depth supports the outlook by Maple that additional gold horizons exist beyond the historical mine resources of the project. Assay results are pending for about 20% of the drilling completed in 2022. A large additional potential resource area remains to be tested as work continues this year.
Recently completed option agreements vending the Eagle Gold Mine and Duquesne West / Ottoman projects both included substantial payments of cash and shares to Globex. The Company earns significant capital gains through the full term of these deals. In addition, JV partners have committed to continue aggressive exploration programs that may increase the mineral resources of the properties. This in turn builds the value proposition for the retained royalties held on the projects in perpetuity.
Globex is also accumulating a proprietary portfolio of shares of partner companies that are issued through the transaction payments. Successful exploration activity reported by JV partners contributes to increase the market value of these shares, again benefiting Globex shareholders.
The corporate treasury is strengthened with each transaction payment recorded by Globex. This financial clout enables funding for subsequent property acquisitions to maintain the pipeline of attractive exploration assets available for the next round of deals in the future. Smallcaps Recommendation: BUY.
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