Globex Reports Yet Another Significant Option Deal for Base Metals Property in Quebec
Globex Mining Enterprises Inc. (CA: GMX – $0.76 & US: GLBXF – $0.57 & GER: G1MN – €0.52) announces a new option deal, in addition to updates presented by existing option and royalty partners.
Yet another transaction has been completed to vend an early-stage exploration asset to a joint venture partner. The option deal enables junior explorer Burin Gold Corp. [BURG] to acquire 100% ownership of the Dalhousie Project. Located in Quebec, Dalhousie is considered an excellent prospect for the discovery of nickel, copper and cobalt resources.
Limited historical drilling was completed within the property in the 1980s. Globex completed a geophysical program in 2007 that identified multiple conductive features within the property area that commonly associated with mineral deposits for these metals. Mineralized outcrops have been encountered in proximity to these targets, which have never been tested in thorough exploration activity. Historic chip samples included assay values of 3.79% copper, 0.90% nickel and 0.28% cobalt.
The terms of the transaction include total payments to Globex of $1.5 million in cash plus 4,000,000 shares of Burin, structured over a 4-year term. Globex will receive the first installment of $100,000 plus one million Burin shares upon signing of the final contract. Burin also agrees to fund at least $5 million in exploration activity during the term of the agreement. Globex retains a 3% GMR on the property, of which Burin may buy back 1% for $1 million.
Burin plans to begin exploration work at Dalhousie this summer. Historical data will be reviewed to determine priority drill targets for a program to be launched later this year. Down hole geophysics will also be employed as part of this program to gain greater perspective on the structural controls related to mineralization.
Gold Production Underway at Fayolle Project Expected to Generate Royalty Income to Globex
Last week an important milestone was achieved by IAMGOLD Corporation [IAG] at the Fayolle Project in Quebec. IAMGOLD secured its mining license in March of this year. Open-pit mining has commenced and ore is now being processed at the Westwood mill facility. Gold production in the range of 10 – 15,000 ounces is anticipated during the remainder of this year. Globex retains a 2% NSR on certain parts of Fayolle and will therefore be the recipient of cash royalty payments from IAMGOLD.
Globex also holds a 2% NSR on the neighboring Destorbelle Gold property. In addition, the Company controls 100% ownership of the Victoria gold property located to the southeast. This property and royalty leverage builds the potential shareholder value as the Fayolle mine gains traction and perhaps focuses additional interest elsewhere in the area.
In an unrelated update, Globex highlighted that a mineral resource estimate for the Flordin Gold Project was recently announced by Abcourt Mines Inc. Based on more than 73,000m of drilling work, a Measured & Indicated resource of 1,758,000 tonnes was presented with an average grade of 2.38g/t gold, along with Inferred resources of 570,000 tonnes with an average grade of 3.23g/t gold. This substantial gold deposit demonstrates the potential for gold endowment of this part of Quebec and potentially Globex’s adjoining gold bearing property.
The exploration success achieved by Abcourt enhances the value of the neighboring Cameron Gold project, immediately adjacent and on strike to the Flordin Gold deposit. The Cameron Gold property is 100% owned by Globex. Moreover, the gold mineralization reported by Abcourt is localized around the Cameron Gold Fault structure. This feature extends onto Globex’s Cameron Gold property. Historical drilling by previous operators also confirmed the presence of gold mineralization. The success achieved by its neighbor highlights the attraction for the exploration opportunity of the Cameron Gold property.
Royalty Partner Manganese X Energy Reports Progress Advancing Battery Hill Deposit
Another promising update was also presented this month by Manganese X Energy Corp [MN]. The Battery Hill project was originally acquired from Globex with the expectation to advance the manganese deposit through to production. This ambition is now a step closer as Manganese X has completed an infill drilling program comprised of 36 drill holes. This work confirmed historic resources and encountered new, previously undiscovered zones of the deposit. It also served to increase the drill density, upgrading the confidence of the grade and distribution of resources. Highlighted among the drill core assay results, one interval of more than 29m is mineralized with an average of 14.4% manganese oxide. In another drill hole, a section spanning 80.3m is mineralized with 11.5% manganese oxide. There were many other noteworthy intervals reported from this drill program.
The results will now be incorporated into an updated resource estimate. This in turn will be part of a pending prefeasibility study to evaluate the potential economic implications prior to the decision on advancing through to mine development. While all of this work is entirely funded by Manganese X, Globex is a beneficiary of a successful outcome as it retains a 1% GMR royalty directly, plus owns a significant share position of Electric Royalties, which in turn also holds a 2% GMR on Battery Hill.
The ongoing work by many independent royalty and option partners contributes to the value proposition of Globex. This is best illustrated by the progress to commercial production at the Fayolle Gold project by IAMGOLD, which in turn will generate recurring royalty payments to Globex for the life of the mine.
The latest transaction, optioning ownership of the Dalhousie project to Burin, adds to a long list of joint-venture deals in process that contribute cash and shares of partner companies on a scheduled term structure. These deals have enabled Globex to amass a lavishly funded treasury and build a proprietary portfolio of shareholdings in its partners.
Meanwhile, ongoing active exploration efforts underway at dozens of projects by other companies will focus greater attention on property assets held by Globex in close proximity. The impressive roster of attractive property holdings controlled by Globex represents a speculative endowment with the potential to generate blockbuster deals in the future. Smallcaps Recommendation: BUY.
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