Globex Shareholders Benefit As Positive Updates By Partner Companies Build Value Expectations
As another busy autumn exploration season draws to a close, work continues at many exploration assets. A flurry of updates have been issued by partner companies on properties that are of interest to shareholders of Globex Mining Enterprises Inc. (CA: GMX – $0.66 & US: GLBXF – $0.48 & GER: G1MN – €0.44).
Last week, a progress update was presented by Maple Gold Mines Ltd [MGM]. Exploration activity is ramping up at several Quebec projects controlled by the company. Three drill rigs have been active through the fall. Two more drill rigs have now been deployed in the field to accelerate ongoing drill programs. This extra effort will ensure Maple remains on track to achieve its ambitious exploration objectives for 2022.
Three drills rigs are currently operating at the Eagle Gold Mine project, where 5000m of drilling work is scheduled to be completed by the end of this month. Maple optioned the Eagle Gold Mine project from Globex in a transaction reported in July 2021. The terms of the deal included payments of $600,000 in cash plus $600,000 of Maple shares, structured during a 5-year term. In addition, Globex retains a 2.5% Gross Metals Royalty (GMR) on the Eagle Gold Mine project and this could become a valuable asset if mining resumes at the property.
The aggressive exploration posture demonstrated by Maple is promising for Globex shareholders. As a minority Maple shareholder, Globex anticipates the value of this investment will increase as property holdings continue to advance.
Escalation of Exploration Effort at Eagle Gold Project Achieves Positive Results
Maple is committed to advance the Quebec properties and expand the gold resources. In July, Maple completed airborne EM and MAG geophysical surveying over the Eagle Gold Mine property. New drill targets were identified that are part of the focus during ongoing drill programs and those planned for early in 2023.
Earlier this summer, positive assay results were presented for the first few drill holes targeting extensions of historic resource zones from the Eagle mine. New styles of gold mineralization were encountered during this round. This encouraging start suggested that perhaps additional gold zones were awaiting discovery that had been overlooked by previous operators of the project.
In August, Maple reported a batch of assay results from drilling at the Eagle Gold Mine project. This was highlighted by an intercept of 11.4 g/t gold over 3m of core. The high-grade results served to validate the potential for the project. The plan was to investigate gold alteration near the deepest elevation of developed historic mine workings. Additional assay results are pending as the final drill holes from the second phase of work are completed.
Maple has also been very active to advance other properties it controls. Two drill rigs are operating at the nearby Telbel property where a total of 6000m of drilling work is to be completed by January 2023. Following the completion of drilling at Eagle Gold Mine and Telbel the drill rigs will be mobilized to the nearby Douay project to commence another exploration program. All of these properties are located within the established Abitibi Greenstone Belt, a famous district of favorable geology and numerous producing mines. Success achieved at any of the projects underway will support the value of the shares held by Globex.
Advancement of Joutel Eagle Gold Project Reported by Orford Mining
Last year, Globex announced a significant transaction, vending three Quebec projects to junior explorer Orford Mining Corporation [ORM]. The properties were consolidated by Orford to form the Joutel Eagle Gold Mine project. This expansive project, spanning 50 square kilometers, features several historical gold and base metals deposits outlined by previous operators along the prolific Casa Berardi gold trend. The total consideration for this transaction amounted to $1,655,000 payable half in cash and half in Orford shares. These payments are structured through several installments during a 5-year term. This week, Globex reported receiving the first-year anniversary transaction payment of $100,000 in cash. A payment of 1,428,571 Orford shares is also due upon approval by the TSXV. Moreover, Globex retains a 3.5% GMR on the property.
Orford agreed to complete significant exploration funding as part of the deal. Geophysical surveying has now been completed across the entire property area. A preliminary drill program was also completed targeting the South Gold Zone of the project. Additional drilling is planned for January 2023. Any successful resource expansion arising from the ongoing exploration work will likely increase the market value of the Orford shares controlled by Globex.
In recognition of the attractive discovery potential in this district, Globex reported acquiring another land position. A package of 18 property claims has been consolidated to form the Mistaouac NE project. This project is situated on strike to the Eagle Northwest property boundary. The Company has identified several attractive drill targets on this new property holding.
Significant Exploration Drilling Completed by Kiboko Gold at Harricana Project
Another Quebec gold project undergoing aggressive exploration activity offers the potential to build shareholder value for Globex. Roughly 8000m of total drilling work was recently completed for the Harricana Project by Kiboko Gold Inc [KIB]. This represents just the first phase of planned drilling for the large asset. Globex holds a 2% NSR covering the property area targeted for the exploration work and most of the zones where gold resources have been identified.
Another phase of 12 drill holes is planned to commence early in January 2023, for a total of 2600m of additional drilling. All of the drilling in both phases is focused at the Fontana area of the project. Upon receipt of drill core assays, Kiboko plans to present a maiden gold resource for the project. This work is contributing towards outlining a potential deposit at Fontana suitable for extraction in an open-pit mine shell.
Azimut and KGHM Deal Potentially Good News
A final piece of interesting information this week was that Azimut Exploration Inc. [AZM] signed a joint venture option agreement with KGHM International Ltd. for its Kukamas Property in the Eeyou Istchee James Bay region of Quebec. KGHM International is a subsidiary of KGHM Polska Miedź S.A, a Polish corporation that has been a major copper and silver producer for more than 50 years, with mining projects in Europe, North America and South America.
Under the Agreement, KGHM International can acquire from Azimut an initial 50% interest in the Property over four years with $5 million in exploration expenditures and can earn an additional 20% interest with a further investment of at least $4.2 million to complete and deliver a preliminary economic assessment study.
Although both companies are unrelated to Globex, this deal is attractive to GMX because the Kukamas property consists of 2 large claim blocks which are separated by a block of 25 claims owned 100% by Globex. On these blocks there are numerous occurrences of gold, copper, silver and iron assaying as high as 36 g/t Au, 62 g/t Ag, 10.96% Cu in grab and trench sampling (see map below). In addition, nearby to the northeast of this claim block, an additional 3 claims enclose two other occurrences of gold and silver where grab and trench samples have returned samples of up to 47.2 g/t Au and 13.6 g/t Ag.
Three different companies were highlighted in recent days, independently advancing projects where Globex retains option (cash and shares) and royalty leverage. Successful exploration activity, funded by other partner companies, is increasing the potential of these projects. The option and royalty holdings offer potential to achieve significant revenue generation in the future with no downside liability to Globex. More exploration announced by royalty partners is always good news for Globex shareholders.
Globex is also continuing to benefit directly from cash and share payments related to previous transactions. The Company remains lavishly funded with no debt on the balance sheet. New properties are frequently acquired to maintain the portfolio of holdings, such as the Mistaouac NE claims highlighted this week.
Even the most promising exploration opportunity is inherently risky. There is never any certainty that a project may be advanced through the value curve to achieve a successful producing mine. However, the prospect for a successful outcome is enhanced through the efforts of numerous companies working independently. Globex has laid the foundation for a longer-term reward with its strategy to acquire highly prospective property assets and the ability to partner with proficient junior explorers in many high-value transactions. Positive news flow issued by these partners enhances the value of retained royalties held by Globex. Smallcaps Recommendation: BUY.
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