Globex Option Partners Set to Advance Exploration Activities
The successful business model for Globex Mining Enterprises Inc. (CA: GMX – $0.91 & US: GLBXF – $0.68 & GER: G1MN – €0.66) is founded by a diverse suite of property holdings. The Company demonstrate time and again its capacity to identify and acquire attractive exploration prospects that offer leverage to a host of mineral resources. These land positions are often secured at bargain values through staking. Others are picked up after previous operators failed to recognize the potential and allowed existing claims to expire. Thereafter, Globex is often positioned to vend these assets to motivated joint-venture partners at premium transaction values.
The current roster of land holdings includes 119 properties with leverage to precious and base metals plus a variety of CRITICAL ELEMENTS. Many of these projects are currently advancing through deals previously arranged with option partners. Globex also controls royalty leverage on 91 different projects.
This week, the Company reported a new transaction involving an option deal for a resource property. Updates were also presented for existing deals which have the potential to build further value for Globex shareholders.
Option Deal for Lac Escale Project
Rising demand for lithium and other lesser known elements has contributed to higher prices for these metals. This in turn is supporting a wave of junior exploration activity in the drive to establish new deposits that may eventually become development prospects for future mining. In northern Quebec, a staking boom has been underway for properties with leverage to potential lithium-cesium-tantalum resources hosted within pegmatites. This latest surge in activity to the north has led to the completion of an option deal involving Globex. The Company reported this week that it has closed a transaction to option the Lac Escale project to Brunswick Exploration Inc [BRW].
Lac Escale was assembled from a cluster of 81 claims. This substantial land position is located within the James Bay region of Northern Quebec. Several mineralized areas have also been identified within the property bearing gold and base-metals.
Globex arranged this option deal enabling Brunswick to acquire 100% ownership in the claims group for a total consideration of $500,000. The payments shall be issued half in cash and half in Brunswick common shares. Brunswick also committed to fund at least $1 million of exploration activity to advance the property. The transaction payments and exploration expenditures are structured over a 3-year term. Globex was given the first payment of $50,000 within five days of the agreement closing date.
Upon completion of the option agreement, Globex will retain a 3% GMR of which 1% may be purchased by Brunswick for $1 million. In addition, Brunswick agreed to pay Globex an annual advance royalty of $100,000 in cash once total exploration funding has surpassed $4 million, or after the 5th anniversary of the royalty agreement (whichever comes first).
Orford Set to Commence Second Phase of Drilling at Joutel Eagle Property
This week, Orford Mining Corp [ORM] reported that a drill rig has been mobilized to the Joutel Eagle Property. The company had indicated that another phase of drilling work was planned for the early part of this year in a previous update. With the arrival of the rig on site, Orford will begin Phase 2 of its exploration strategy.
About 2000 meters of total drilling work scheduled during this round.
The Joutel Eagle project was acquired by Orford through an option deal with Globex announced in November of 2021. Under the terms of the agreement, Orford is required to fund a total of $2,775,000 in exploration activity structured over a five-year term. The first phase of exploration at the project by Orford involved geophysical surveying, including detailed interpretation of historic resource zones. A drilling program commenced shortly afterwards with about 1500m of total drilling completed in 2022. This work focused on the South Gold Zone of the property. Broad sections of gold alteration were reported from this phase, including an interval of 20.65m bearing an average of 2.0g/t gold.
The current round of exploration work will also focus on the South Gold Zone to follow up on the successful drilling from last year. Expectations to encounter additional broad zones of gold mineralization at this target will build the resource clout for the project. Orford aspires to compile an updated gold resource estimate for the property that documents a larger overall gold endowment for the project. Globex retains a 3.5% GMR on the property.
Manganese X Reaches Midway Point of Drilling Program
On addition, Manganese X Energy Corp. [MN], announced that it is approaching the midway point of the pre-feasibility study in-fill and step-out drilling program at its wholly owned Battery Hill Project located near Woodstock, New Brunswick.
An aggregate of 16 NQ diamond drill holes totaling 2,208 metres have been completed of the planned 4,725 metre, 31-hole program. The goal of the drill program is to in-fill and expand the Measured and Indicated resources in preparation for the pre-feasibility study (“PFS”) by upgrading the Inferred category resource included in the Preliminary Economic Assessment (“PEA”) mine plan.
The North American battery industry is going to require its own supply chain for manganese. The continent, however, has no current high-purity manganese processing capacity to supply a large number of batteries gigafactories and cathode plants currently under development. Manganese is a stabilizing component in the cathodes of nickel-manganese-cobalt lithium-ion batteries used in electric vehicles.
The Company is methodically fulfilling its mission to become the first publicly traded mining Company in Canada and the US to commercialize high-purity EV compliant manganese.
This property was acquired from Globex in an option deal enabling Manganese X to earn 100% ownership in the project. Globex was paid a significant minority interest of shares in its partner Manganese X under the terms of this deal, and also retains a 1% GMR on the project. Globex also retains a large share position in Electric Royalties which also has Gross Metal Royalty on the project.
Globex has arranged many successful property transactions over the last few years. The Company always seems to be positioned with attractive projects at the right time and at the right place to participate in exploration booms that arise. This is in part due to the visionary strategy to acquire the diverse asset base with leverage to so many different metals and minerals. It is also reflective of the skills demonstrated by management to find great projects when they are out of the spotlight and available at the bargain values. Eventually the cycle comes back around and these same property assets may be suddenly highly valued by another company looking for an acquisition.
The option deal for the Lac Escale Project is just the latest of a series of transactions in which Globex was able to capture a capital gain for a project while also retaining royalty leverage through a JV arrangement. The property will advance through ongoing exploration activity funded by Brunswick. Potential mineral resources defined on the property will add value to the retained royalty. The outlook remains extremely encouraging for Globex shareholders. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $2.87||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|