Globex Shareholders Benefit as Partner Companies Report Encouraging Results
Advancement of the Mont Sorcier iron ore project has remained the focus for Vanadium One Iron Corp [VONE] throughout the year. This week the company issued an update on progress for an extensive infill drilling program at the property. A total of 34 drill holes have been completed in this program targeting the North Zone of the deposit area. Assay results were reported for the first five drill holes of the program. Consistent results were achieved in this drilling work, with magnetite content reported in the mid-20% range. The resource zones were mineralized with attractive grades of iron oxide up to 38.2% and 0.20% vanadium content across wide intervals of drill core in each hole.
This initial success rate is encouraging to confirm the grade and thickness expectations for the North Zone. VENE has now decided to complete another 11 drill holes amounting to 4500m of drilling work at the property. In support of the various activities to advance Mont Sorcier, Vanadium One also announced the appointment of Clinton Swemmer to serve as Vice President Technical Services. Swemmer has been involved at a senior level to advance development of several large mining projects during his career.
Globex Mining Enterprises Inc. (CA: GMX – $0.93 & US: GLBXF – $0.76 & GER: G1MN – €0.63) retains a 1% Gross Metals Iron Royalty on the Mont Sorcier property. As VONE works to upgrade classification and confidence of the resource and commences long term studies, the project advances further along the path towards mine development. This could create a revenue stream payable to Globex for its royalty held in perpetuity on the property. Moreover, Globex would also benefit as it maintains a significant 16.2% ownership in shares of Electric Royalties Ltd (ER), which in its turn also holds a 1% GMR against the Mont Sorcier property vanadium production.
Royalty Partner Maple Gold Mines Plans Drilling Program Following Review of Geological Model
Earlier this summer, Globex announced that a transaction had been arranged with Maple Gold Mines [MGM] to option the Eagle Mine Property in Quebec. The deal involved a land package of 77 hectares including the formerly producing Eagle gold mine. A remnant historical gold resource was previously outlined at the project with additional exploration potential. As part of this transaction, MGM agreed to fund at least $1.2 million in exploration expenditures and pay Globex $1.2 million to earn 100% ownership of the project. Globex retains a 2.5% GMR on all future production from the property.
Maple Gold Mines completed a three-dimensional geological and structural model for the Eagle Mine Property. Potential extensions to previously mined gold zones were identified. Additional discovery potential was presented for potential sub-parallel veins in proximity to the historic workings that had never been tested by the prior operator. The study also reviewed previous exploration data and identified targets where high-grade gold intercepts had not been properly advanced in follow up work.
Only limited exploration activity has been completed at the property since operations were halted at the Eagle Gold Mine in 1993. MGM believes the project offers exceptional discovery potential. The company is planning a drill program of between 2,500 and 3,000 meters. This work will begin testing some of the advanced targets that were developed. The program is entirely funded by Maple. A successful outcome to expand the gold resources of the project would support the potential to restart mining operations. This of course will be of interest to Globex shareholders as the subsequent income stream would be generated through the retained royalty for all gold produced at this mine. Globex also anticipates receipt of several additional cash payments from Maple as part of the original transaction agreement.
Additional Assay Results Reported by Partner Extend High Grade Discovery Zone at NewMetal Project
The NewMetal project is another Quebec-based property featuring historic mine workings. Part of this property was assembled from land holdings acquired from Globex by Starr Peak Mining Ltd [STE]. This transaction netted a high value block of Starr Peak shares (1,200,000 shares) and $100,000 to Globex, in addition to the retained 2.5% royalty held on the property.
Starr Peak commenced an aggressive exploration program at NewMetal. Drill targets were selected based on interpretation of geophysical surveying along with scrutiny of historic data from previous operators of the property. In July the company reported several high grade polymetallic intervals had been achieved in the first drill holes. This prompted Starr Peak to expand the scale of the program and the total budgeted drilling work was increased to 60,000 meters.
This week, another batch of attractive assay results were presented by Starr Peak. Once again, wide intervals, including some high-grade mineralization were reported. The results included a section of 7.85m of drill core with an average grade of 10.42% ZnEQ from the Deep Zone of the deposit. The polymetallic deposit is highlighted by various grades of zinc, copper, gold and silver content.
The attractive results generated so far in this program have encouraged Starr Peak to further expand on the scale of the exploration effort. The company announced that the total drilling budget will now be increased to cover 80,000 meters. This represents an enormous commitment of drilling work for a junior explorer. It demonstrates the confidence that a much more significant discovery may yet be achieved at the project. Globex is a beneficiary of this ambitious drilling. If a compelling deposit is outlined to restart mining operations, the retained royalty interest will generate a meaningful revenue stream from the project.
A large volume of positive news flow was reported to start off this month by various companies operating independently. Globex was not involved directly and did not contribute any of the funding to support the specific advancement at these projects. However, the Company is a beneficiary of the progress reported at all three of the projects highlighted due to its retained royalty leverage on these properties. This is the strength of the Globex business model to assemble the diverse suite of royalties held on so many properties, with leverage to so many different resources. A significant investment of time and money is required to develop a producing mine. By maintaining royalty leverage to a large number of projects, Globex is able to participate in the successful outcome of this work without the ongoing requirement to provide funding.
With many of the current royalty partners demonstrating an aggressive posture towards mine development, the prospect of achieving production at these projects is enhanced. The value of the royalties increases as the underlying property assets are advanced. Active work programs on behalf of royalty partner companies are good for Globex shareholders.
Meanwhile, Globex remains abundantly financed to carry on its ambitions to acquire and advance property holdings. The Company has secured a significant windfall of payments in cash and shares so far this year through a strategy of transaction activity.
Globex maintains one of the largest property portfolios in the junior mining sector. The suite of property and royalty holdings currently comprised of 201 packages. This combination of a vibrant mix of property and royalty holdings and the lavishly funded treasury (+/- $28 million) has contributed to a strong market performance this year although the current downturn in the share price in most large and small mining stocks including Globex provides an exceptional opportunity to acquire Globex shares at a significant discounted to value. With so many active projects currently advancing, the speculative upside for this Company remains exceptional. Smallcaps Recommendation: BUY.
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