Globex Partner Granted Conditional Approval for Significant Property Transaction to Move Forward
The Province of Quebec has been ravaged by intense forest fires this year, curtailing work activity by junior explorers that may have been active in these areas. The crisis appears to be winding down and access has been restored in most of the affected regions. This is good news for the junior mining sector, and also represents perfect timing for a transaction involving Globex Mining Enterprises Inc. (CA: GMX – $0.83 & US: GLBXF – $0.63 & GER: G1MN – €0.56). This week, Burin Gold [BURG] reported that the TSX Venture Exchange has granted conditional approval for the option deal to acquire the Dalhousie project from Globex.
The Dalhousie property was assembled from a group of 32 claims, located in the Matagami mining camp of Quebec. Historical drilling results presented by previous operators confirmed copper, nickel and cobalt mineralization within the property area. Interpretation of geophysical data for the property also outlined promising target areas that have never been tested. Given the industrial demand for these metals related to electric vehicle production in the years ahead, Burin aspires to define a new deposit within the property that may be suitable for mine development.
With conditional approval in hand, Burin plans to commence fieldwork at the property this summer. Based on the results of this activity, the company will be able to select drilling targets and plan the first comprehensive drilling program at Dalhousie in many years. Globex will begin receiving the payments of cash and shares as scheduled in the transaction reported last month, including a payment of $100,000 in cash plus the commitment from Burin to complete at least $1 million of exploration work in the first year. The total transaction value includes $1.5 million in cash plus 4 million shares of Burin payable to Globex over a term of four years.
Globex Royalty Partner Engages in Discussion to Secure Mine Development Funding
An update regarding project financing was also presented by Cerrado Gold Inc [CERT]. Ongoing discussions with the UK Export Credit Agency (UKEF) have been underway to secure a financing package for Cerrado. An Expression of Interest (EOI) has now been reported for up to $420 million in total project financing for two advanced projects controlled by the company. One of these projects is the Mont Sorcier property in Quebec, held through its wholly owned subsidiary Voyager Metals Inc. A large resource of iron and vanadium has been defined at Mont Sorcier and a positive PEA was presented for the project in 2022.
Cerrado is working towards establishing a producing mine at Mont Sorcier. Securing development capital is one of the most critical challenges that an aspiring junior miner must successfully achieve. The EOI is not a legally binding contract. There are conditions attached that Cerrado must resolve to qualify for the loan, including completing a Definitive Feasibility Study for Mont Sorcier, and arranging an offtake agreement for the metal that will be produced. This support from the UKEF is certainly a validation of the project as Cerrado moves ahead to resolve the related conditions involved in the process to approve this financing package.
All of this is excellent news for Globex, as the Company holds a 1% GMR on iron production from the Mont Sorcier property. In addition, Globex also holds a significant position of Electric Royalties shares, and is therefore leveraged to the 1% royalty on vanadium production that Electric Royalties holds on the project.
Cartier Delivers Impressive Assay Results as Exploration Continues at Chimo Mine Project
Another independent royalty partner provided positive news regarding the advancement of a potential mine development. Exploration activity underway at the Chimo Mine project has encountered promising gold values, as reported by Cartier Resources Inc [ECR]. Assay results were presented for a total of six drill holes which targeted the West Nordeau and Chimo Mine sectors of the project. Highlighting this data, an interval spanning fifteen meters of drill core was mineralized with an average grade of 3.2 g/t gold. Within this section, a higher grade subinterval of 6 g/t gold was also identified within 3m of core. This drill hole was notable in that it significantly extended the established gold resources at the West Nordeau sector a further 175m to depth. Attractive results encountered at the Chimo Mine sector included a subinterval of 9g/t gold within a one-meter section.
Cartier recently presented a positive PEA for the project outlining a scenario to produce upwards of 116,000 ounces of gold per year during an estimated mine life of 9.7 years. This was based on compliant gold resources including 720,000 ounces Indicated plus more than 1.6 million ounces inferred. The ongoing exploration effort may enable the company to increase the overall resources for the project, adding further clout for potential mine development. Globex retains a 3% GMR on the consolidated property holdings of this project.
Globex has been active as a project generator for many years with a successful track record to arrange transactions establishing partnerships with aspiring junior explorers. Thereafter the projects undergo exploration as funded by partner companies, along with other important milestones to support a potential mine development. Each individual achievement thereafter by partner companies to advance a project further along the development curve builds the value proposition for Globex in tandem. The success reported by three project partners this month demonstrates the attraction potential of this strategy.
At the early phase of the spectrum, Burin is now embarking on its plan to discover new resources at the Dalhousie Property. With the approval granted for the option deal, Burin may now embark on fieldwork and prospecting programs. The first drilling activity at the prospect in many years is slated to commence shortly afterwards. Globex anticipates receiving payments of cash and shares through the transaction, and will also be rewarded on the back end with a 3% GMR held on the property if successful mine development is achieved. Cerrado and Cartier are more advanced players in the same process, with a similar favorable outcome for Globex if a mining gets underway on the properties.
Dozens of other partnerships have been established and Globex remains a beneficiary to this success without bearing any financial liability to participate in the activity. Royalties are held in perpetuity for these projects. A large proprietary portfolio of shares in its partners has also been assembled by the Company. The prospect for successful mine developments arising from these partnerships in the years ahead would therefore contribute significant shareholder value, directly from the royalty income and indirectly as the value of the share portfolio is enhanced. Smallcaps Recommendation: BUY.
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|Price Target: $2.87
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