New Property Transactions Provide More Cash and Growth Potential for Globex Mining
The steady pace of successful transaction activity in recent years has provided the foundation of strong growth for Globex Mining Enterprises Inc. (CA: GMX – $1.13 & US: GLBXF – $0.88 & GER: G1MN – €0.75). A portfolio of attractive property assets assembled by the Company is like the gift that keeps on giving for shareholders. Many of these projects are now advancing through exploration programs funded by transaction partners. Globex retains royalty interests held on these properties to capture additional value through mine development opportunities. The strategy has paid off for Globex shareholders as new deals continue to be arranged and previously reported transactions move ahead.
This week, Globex reported two more property transactions, in which it vended resource projects to partner companies. Both properties are located in Quebec, the core operating area for the Company. Globex ensured that a cash payment is received on the front end of these deals, along with payment of shares in the partner companies. The share ownership component also continues to serve as a successful value creation vehicle, as partner companies successfully advance the properties. A retained royalty held in perpetuity on each of these properties may also contribute future value if economic opportunities are eventually realized through mine development.
Rapid Transaction Secured for Uranium Property Acquired Late Last Year
The most significant of these transactions this week involved the sale of the Des Herbiers uranium claims to Australian junior Infini Resources Pty Ltd. Perhaps the most interesting aspect to this deal is that this land package of 66 claims in Quebec had only recently been staked by Globex in November 2021.
Extensive previous exploration work had been completed within the project area by previous operators. This led to the presentation of a compliant resource report for the property, documenting 162,153,000 tonnes with Indicated and Inferred resources amounting to 43,953,000 pounds of U3O8. Numerous other areas of uranium mineralization have also been identified at the property. Therefore the significant overall uranium resource may yet be expanded with further exploration work.
Under the terms of the agreement, Infini Resources shall pay $100,000 in cash to Globex within 30 days. An additional payment of $200,000 is due within 30 days of receiving the Conditional Admission Letter from the securities authorities. A component of Infini Resources shares is involved, following the IPO on a public exchange. This payment shall amount to $300,000 value in shares at listing price for the IPO of the stock. Globex also retains an attractive 3% Gross Metals Royalty on the project.
Given that many of the transactions achieved by Globex involved properties held by the Company for many years, the rapid turnaround to deliver this latest deal is exceptional. The deal represents an excellent return on investment with future growth potential. As a newly listed company, shares of Infini may rapidly increase in price as this uranium property advances. This in turn would build value for Globex. Plus the retained GMR held by Globex provides back-end leverage to a successful outcome.
Transaction Announced to Vend Rare Earth Elements Exploration Prospect
Globex also reported an agreement to vend the Coconut Club rare earth elements (REE) property to Australia-based REEgenerate Pty Ltd. The property is located east of Kipawa, Quebec.
A radiometric anomaly spanning a surface extension of 2.5kms had been defined on the property. Preliminary sampling work at Coconut Club outlined a large area of alteration bearing REE. A program of shallow drilling was the launched by Globex in 2010. This work encountered elevated values of REE within the target area. Encouraging content of light REE included Neodymium and Praseodymium. The more valuable heavy REE, including Europium and Dysprosium, were also reported near surface within this large target area. Other valuable elements including thorium, uranium and niobium were encountered during this program.
REEgenerate has agreed to pay $10,670 in cash, plus $20,000 in shares to Globex. The project was held as a non-core asset and therefore may now be more effectively advanced by this focused junior explorer. More importantly, Globex retains a 2% GMR on the property.
Partner Companies Issue Updates
In addition, an update was reported for the Mont Sorcier project by transaction partner Voyager Metals Inc [VONE]. The company had completed a round of infill drilling at the property in 2021. Voyager reported the data for the first 18 drill holes earlier last year. The assay values reported in this batch were for another six drill holes of the program. Samples from a further 18 drill holes have been submitted. Additional assay results are pending.
So far the results suggest that the targeted resource zones were successfully intersected in the drilling program. Mineralized drill core intervals averaged more than 150m in length, bearing an average of 30% magnetite (Fe3O4). Significant vanadium content was also encountered within every drill hole. Voyager expects this program will upgrade confidence of the resources of the project, from Inferred to Measured and Indicated. This will enable the company to move ahead with a Bankable Feasibility Study by 2023. Globex retains a 1% GMR on the property.
Another update was issued by Maple Gold Mines Ltd [MGM]. The company is moving ahead with exploration drilling and will begin targeting resource zones at the Eagle property optioned from Globex late last year.
During the first phase of work, Maple will focus on potential extensions along strike from previously mined resource zones. The company believes that sub-parallel gold structures may also be encountered that had been overlooked by previous operators of the property. Two subsequent phases of exploration are planned later this year.
Globex shareholders are leveraged to the success achieved by Maple as work advances. Globex shall receive payments of cash and shares of its partner in this transaction through the remaining term of the agreement, and retains a 2.5% GMR on the Eagle property.
A long term growth strategy using the project generator model has served Globex well during this resource bull market. The focus on achieving transactions with quality partners has established a pipeline with multiple properties advancing independently. This success builds further value through minority ownership positions that Globex holds in many of the partner companies. The royalty portfolio owned by Globex is also becoming a stronger value proposition.
Value creation is also delivered as established partners report progress updates. Voyager has ambitions to build a mine at the Mont Sorcier property. Successful exploration results to upgrade the category of resource confidence will open the door to commence a Bankable Feasibility Study, a key milestone towards planning for mine development. This would create the prospect for a recurring income stream generated through the royalty held by Globex.
Exploration work announced by Maple Gold is also an opportunity for Globex. Maple is committed to build the gold resources of its core holdings, including the Eagle Mine property. The outcome of a producing gold mine would also be rewarding for the Globex royalty portfolio.
With so many projects in the pipeline, the odds for continued success are stacked in favor of Globex. One deal at a time, the Company is creating shareholder value from the high quality property assets under management. The collective advancement through many partner companies is a far more powerful growth engine than Globex could hope to achieve independently. Smallcaps Recommendation: BUY.
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