High Resolution Airborne Magnetometer Survey at Globex Property Builds Expectations
Work was recently halted at mining projects across Canada for several weeks due to the COVID-19 outbreak. Following these delays, explorers and mining companies are now resuming operations in Quebec. This week, Globex Mining Enterprises Inc. (CA: GMX – $0.35 & US: GLBXF – $0.25 & GER: G1MN – €0.22) has responded with a plan to immediately commence the next stage of work at its Francoeur/Arntfield/Lac Fortune Gold Mines project.
The Company announced that it will begin a geophysical program targeting the entire consolidated property area. Spanning an area of 4,155 hectares, the project has never before been surveyed in its entirety in a single geophysical program. In addition, surface mapping, sampling and prospecting work will continue with the ‘boots on the ground’ approach that is an important part of early stage exploration.
Of note, the flight plan for the airborne magnetometer survey is to be completed such that 25-meter spacing is achieved between each pass. This will enable the creation of an exceptionally high resolution MAG image to be produced for the property. The combined over flight pattern for this program will amount to 2,000 kilometers of surveying.
Interpretation of Survey Data Will Highlight Attractive Structural Targets
The MAG survey is employed to outline and distinguish between various rock units below the surface. Structural features and shear zones may also be identified. This is important because the distribution of gold related alteration is often enriched within specific rock formations, or in proximity to structural features. Historic mine workings and gold showings provide clues for the geological factors that contributed to the endowment of gold alteration within the project area.
Interpretation of this high resolution survey will then assist geologists to better understand the correlation between these geological features in relationship to established gold showings and historical gold deposits on the property package. Thereafter the geologists may plan future exploration work with greater confidence.
The investment to create the high resolution survey will provide an extremely detailed image that clearly defines structural areas of interest. Untested property targets may be identified bearing geological similarities to the defined gold zones already established on the property.
Previous exploration work completed by various former operators frequently proceeded without an understanding of what was going on just beyond the property boundaries. The various land holdings that have been assembled to create the consolidated project area may now be advanced using a systematic and integrated exploration strategy.
Considering the success that Globex has achieved so far to outline new gold zones, the decision to proceed with a high resolution survey will provide a much greater fundamental understanding of the project going forward. For the first time, the geologists will have the opportunity to intuitively compare all of the known gold showings to structural features and better interpret where to look for the next discovery.
Globex is also busy on a number of other projects. In Ontario, for example, a drill permit application has been submitted for a program of six drill holes at the 100% owned Laguerre-Knutson property located near Larder Lake. Once the approval has been received, Globex will target a down-dip extension to the Knutson gold zone. Historical sampling of this target has already identified high grade gold showings at surface.
Royalty Partners Advancing Exploration, Development, and Mining
While the Francoeur/Arntfield/Lac Fortune Gold Mines project remains the flagship exploration program advancing for Globex, several other projects are also resuming activity. Globex currently controls 192 mineral properties, with diversification to a variety of minerals and metals. A roster of 50 royalty interests add further value, including the Mid-Tennessee Mines zinc project currently operated by Nyrstar NV. Globex is entitled to a 1.4% royalty when LME zinc prices are at or over US$1.10 per lb, and a 1% royalty when the zinc price is between US$0.90 and US$1.09 per lb. Since 2010, Globex has received royalties from Nyrstar totaling more than US$6 million. Currently the price of zinc is climbing back up towards the $0.90 per pound level, so the royalty stream could resume quickly.
Last week, IAMGOLD acquired the Fayolle gold deposit and has plans to quickly begin production. A near surface, high grade indicated gold resource of more than 110,000 ounces has been defined at Fayolle. The deposit is planned for development by an open pit. This would also generate royalty income payable to Globex from all gold mined from the project.
At the Nordeau Claims in Quebec, another royalty project optioned to O3 Mining (formerly Chalice), surface stripping and drilling programs are planned. The Nordeau claims were consolidated into the larger East Cadillac project controlled by O3 Mining. A second drill rig has been mobilized to this project, and the overall program on O3’s Val D’Or area assets has been tripled to 150,000 meters of drilling work planned.
Renforth Resources is advancing planning for a mini-bulk sample program to commence at the New Alger gold project. Globex holds a royalty on all gold production from this asset.
Meanwhile, Nippon Dragon is engaged with underground sampling at the Romec 1 property. Approximately $33 million has been invested in exploration and rehabilitation of the mine infrastructure at this property. In anticipation of resuming active mining, Nippon Dragon is now in discussion with potential contractors. Globex holds a royalty on all gold production from Romec 1.
Finally, in Nevada, Eros Resources has received a ‘Finding of non-significant impact’ from the EPA regarding the Bell Mountain royalty property. This is an important regulatory confirmation to allow further development work to proceed.
Gold deposits are often concentrated within specific rock units, or in proximity to structural features. Structure serves as the plumbing for subsurface fluids, and these conduits enable gold to mobilize into the favorable rocks in proximity. The geological imaging that enables geologists to ‘see’ specific details far below surface is thus a valuable information source. By observing the setting for known gold zones and then outlining similar areas in untested rock elsewhere on the property, an intuitive strategy is useful for planning future targets.
Given the large size of the Francoeur/Arntfield/ Lac Fortune Gold Mines project, including several past-producing mines and the large inventory of identified gold showings, the luxury of a detailed, high resolution MAG survey will illuminate promising geological units to focus exploration activity. This work vastly improves the odds for successful exploration. The longer term objective is to successfully define a larger gold deposit area that may be attractive for mine development. Each step that moves Globex further along to that objective creates additional shareholder value.
As one of the most successful project generator in Canada, Globex is ideally positioned to deliver effective exploration and also to engage in successful transactions. The activity underway at several other projects, largely funded by partners, also contributes to the value proposition. With such an extensive portfolio of assets, Globex has done well to recruit partners to advance properties and secure royalty leverage. And the steady progress underway across a variety of properties creates the potential to achieve new discoveries and build greater resources. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $2.87||Latest Company Report (pdf)|
|For important disclosures, please read our disclaimer.|