Partners Advancing Exploration Projects Improve Value Proposition for Globex Shareholders
With so many active partners currently advancing exploration prospects, Globex Mining Enterprises Inc. (CA: GMX – $0.74 & US: GLBXF – $0.54 & GER: G1MN – €0.49) always seems to have positive updates to relay that are of interest to shareholders. This week, we discuss four updates issued by transaction partners.
Royalty partner Radisson Mining Resources [RDS] published an update this week for its exploration progress at the O’Brien project. Six mineralized trends have been defined so far on the property bearing high grade gold values. These have been the focus of several rounds of drilling, each of which has been successful to extend the system along strike and to depth. Over 127,000m of drilling has been completed since 2019. This has contributed to increase the defined resources of the project to 501,000 ounces of gold (Indicated) plus a further 449,000 ounces in the Inferred category.
Radisson management believes that there is potential to significantly increase the defined resources for the project as further work is completed. Trends #2, #3 and #4 remain open and are for the most part on to the Kewagama Gold Mine property section, on which Globex holds a 2% NSR. Further to the east, the adjoining New Alger property is also expected to yield additional gold resources as exploration continues in addition to the 72,000 ounces already outlined at shallow depth. This is good news for Globex shareholders as the Company holds a 1% NSR for this section.
Royalty Partner Kiboko Gold Reports Assay Results from Recent Drilling Activity at Harricana Project
Kiboko Gold Inc [KIB] is also independently advancing an exploration property for which Globex holds royalty leverage. The Harricana Project is a large prospective gold property undergoing aggressive drilling programs carried out by KIB. Upwards of 8000m of drilling was completed last year to outline and define near-surface gold resources at the Fontana target area. Early this year, Kiboko commenced additional drilling with 12 drill holes planned.
In January 2023, Kiboko reported a batch of assay results for 23 previously completed drill holes. The drilling encountered numerous wide intervals of high-grade gold, highlighted by a section of 22.2g/t over an interval of 3m. In another drill hole, an average of 35.4g/t gold was encountered across 2m of core, while 47.2g/t of gold was reported over one meter of core further along the system. Many lower grade intervals were also reported as part of this round, which the company believes may be worthy of further attention as targets to follow up.
Kiboko management expressed that the exploration results achieved so far are consistent with expectations for the project. The company remains committed towards the establishment of an attractive gold resource that would merit development of an open-pit mining operation. A maiden mineral resource for Harricana is expected to be presented by the second quarter of this year. Globex retains a 2% NSR on this property and would become the beneficiary of a royalty income stream if this potential for active mining envisioned by KIB is subsequently realized.
South Gold Zone Delivers Additional Attractive Gold Values as Orford Advances Exploration
At the Joutel Eagle project, the next round of exploration drilling has commenced. Last week, Orford Mining Corporation [ORM] presented another round of assay results from recently completed drilling. The results achieved higher gold grades than the historical resources for this project. In fact this latest batch of assay results also surpassed the impressive grades reported by Orford during the previous exploration drilling completed in the summer of 2022.
Activity was focused on the South Gold Zone, a wide band of lower grade gold mineralization established by former operators of the property. The results from the first two drill holes were highlighted by an interval of drill core spanning 14.6m with an average grade of 4.1g/t gold. A narrow subinterval with this section was enriched with 28.7g/t gold across 0.32m of drill core. Another notable interval reported in a different drill hole included an average of 1.1g/t gold within 30m of drill core. Orford plans to complete a total of ten drill holes in this program, advancing exploration further along strike at this target. This ongoing exploration activity fully is funded by Orford under the terms of the option deal to acquire the project from Globex, reported in November, 2021.
More than 1.1 million ounces of gold were produced by a previous operator at the Joutel Eagle project. The property is an excellent fit for Orford, situated adjacent to neighboring holdings that collectively span 17 kilometers along strike within the south splay of Casa Berardi structural zone. Orford endeavors to expand the gold resource clout for these strategic property interests as part of its longer term ambition for future mine development. Globex retains a 3.5% GMR on the Joutel Eagle property and is therefore leveraged to benefit from a successful outcome to the Orford strategy.
Important Milestone Arranged to Enable Electro Metals to Advance Exploration Asset
As an aspiring entrant to the junior exploration sector, Electro Metals and Mining [EMMI] was launched as a private company some time ago. The company subsequently arranged an option deal with Globex that would enable it to secure 100% ownership of the Magusi Mine project, a large land position highlighted by a past-producing base metals mine. The option deal was structured with payments in cash and shares over a duration of several years. This format would allow time for EMMI to achieve a public listing and raise funding to make property payments and advance exploration activity.
EMMI reported a significant milestone along the pathway to fulfill the terms of the option deal. A reverse takeover [RTO] deal has been arranged to acquire 100% ownership of Shine Box Capital [SBC]. Structured as a Capital Pool Company, SBC is listed on the TSX Venture Exchange. The successful completion of this arrangement would thus secure a listing for EMMI on the TSXV and establish the foundation to efficiently access capital as a public company. This is the conventional strategy for a junior resource company to advance a longer term exploration plan. Upon completion of the RTO, the merged entity will carry on as “Electro Metals and Mining Inc.” Trading is currently halted for shares of SBC and the transaction remains subject to approval of the TSXV
Conditional to this arrangement, an equity offering will be completed with the intent to raise $4 million. A successful resolution to this process will enable EMMI to issue subsequent payments to Globex under the terms of the option deal for Magusi, including at least $1 million in cash payable within the first year. Globex also retains a 3% GMR on the property. EMMI believes an open-pit mining operation can be established at Magusi.
The latest updates presented by transaction partners create value for Globex shareholders. Each of the four companies mentioned delivered progress to advance properties on which Globex retains royalty leverage. Each of the properties can develop into a mine that may generate royalty income to Globex. More importantly, Globex itself is not directly participating in activities underway and is not required to contribute funding towards the advancement of these high-quality exploration prospects.
In addition to the updates highlighted this week, ambitious exploration activities are underway at many attractive resource projects in which Globex maintains an interest. Among these, several are indeed approaching mine development. This is why the encouraging updates regularly presented by other companies like Orford, Radisson and KIB, add to that potential for significant royalty income in the future.
The capital gains that have been achieved in the initial transactions to vend property interests are meaningful and without doubt have contributed to the impressive market performance of the Company during the last several years. In fact, Globex anticipates receiving further payments of cash and shares of its transaction partners for the Joutel Eagle and Magusi projects. The upside potential ahead from royalty income may provide yet another catalyst for share price gains in the months ahead.
Also worth noting Globex has gone into the market in the last week buying back shares for cancellation. On Friday alone, 450,000 share were purchased for cancelation. Globex already has few share out. These buybacks over the long term should help raise the stock price as partners pay Globex cash and share and, advance Globex properties. Smallcaps Recommendation: BUY.
|Smallcaps.us Advice: Buy||Price Target: $2.87||Latest Company Report (pdf)|
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