Globex Mining Enterprises Inc. builds a strong portfolio

Marc Challande
May 31, 2022
3
minute read

Globex Mining (T: GMX, FRA: G1MN, OTCQX: GBLXF) is a company with a diversified portfolio of promising North American mid-stage exploration, development, and royalty properties. The company is focused on value projects. It runs a robust business model with currently 214 assets including 89 royalties, which gives the company a strong balance sheet with approximately $20M in cash and shares of other companies, income and no debt.

Company Overview

Globex Mining seeks to create shareholder value by acquiring mineral properties and enhancing them through exploring, optioning, joint-venturing them, developing them to production, and selling projects outright. Globex is involved in Eastern Canada, Germany, and the USA, meaning there are very low political risks. The company has a well-diversified portfolio of 214 projects (110 precious metals, 62 base metals & polymetallic, and 42 specialty metals & minerals), 89 royalties, seven active options (cash, share payments, exploration & development expenditures, and gross metal royalty), and 55 historical or NI 43-101 resources. To grow its business, the company focuses on historical or NI 43-101 resources, drill intersections of economic interest, mineral showings or drill targets, past production, and a location on primary ore localizing structures or prolific mining camps. All Globex’s properties have at least one or more key attributes, which is why its portfolio is well diversified. Out of all of the company’s properties, some have superb qualities. We can mention:

High-grade gold: The Montalembert property, which was 100% acquired in 2015, shows high quality gold. Some samples from the North Galena vein returned up to 33.5 gpt Au. Assays of 84.0 gpt Au, 64.5 gpt Au, 36.3 gpt Au, and 17.3 gpt Au as well as other anomalous values, have been received to date.  Work has expanded the area of known gold mineralization on the property as previous historical data only provided gold assays on the Galena Vein.

Lithium: One of the company’s most exciting former properties is the Authier property in Quebec. Fully acquired by Sayona Mining (ASX: SYA) in 2016, Globex Mining has nevertheless kept a 0.5% Guaranteed Minimum Royalty (GMR) as well as a large shareholding in another company that holds a 1% GMR. This property has many highlights and economic benefits. A previous Definitive Feasibility Study included a pre-tax Net Present Value (NPV) of $184.8M and Internal Revenue Rate (IRR) of 33.7% and should deliver an annual revenue of $80M.

On August 18, the company announced it acquired 100% of the Quebec Dolomite Deposit, located approximately 5km West of Havre St-Pierre, Quebec. A subsequent report by R.A Marleau (September 30, 1992) concluded that the deposit had “good potential, readily available markets for 400,000 tonnes per year for crushed 3/16-inch material”.

Globex Mining is led by Jack Stoch, CEO. With +40 years of experience in the industry, Jack Stoch is specialized in acquiring and vending mineral companies. Jack Stoch gained control of Globex in 1983. He has created a strong portfolio while attracting a knowledgeable and well-connected board of directors (3 senior geologists, one mining accountant, and one senior finance professional).

Share Structure/Financials

When we talk about numbers, Globex Mining is exciting. The company reported on its latest financials (period ended June 30) that it had $30M in total liquid assets (including $10M in cash, $10M in investments, and $5M in accounts receivable) for no debt. It owns multiple investment assets and has its most significant stake in Yamana Gold (TO: AUY, Mkt cap: $4.5B), worth approximately $4M.

Investors will appreciate that the company generates income, prevents share dilution and reduces shareholder risk. Even better, Globex Mining announced a Normal Course Issuer Bid (NCIB). The company can purchase and cancel up to 1M shares, representing 1.8% of Globex’s issued and outstanding shares. According to the TSX policies, the company will have the right to buy up to 11,485 common shares during trading days on the TSX but unlimited on other exchanges.

About the share structure, the company has 55M shares issued and 2.6M options at a weighted average exercise price of $0.40. Regarding insider ownership, directors and management own 11%. The stock is traded in Canada (TO: GMX), Germany (FRA: G1MN), and the USA (OTC: GLBXF). The buying opportunity here is enormous as the stock price is currently sitting at its 52-week low while many catalysts are occurring.

The stock price witnessed a 52-week high of $1.69 (April 2022). Surprisingly, it is now around its 52-week low of $0.80. Focusing on fundamentals data, the company has a Price/Sales and Price/Book ratio under 2 and an Enterprise Value/Revenue under 1 (data from September 4). More important data to focus on is the company’s net income growth compared to the sectors. Over the past 5 years, Globex’s net income growth grew by 78% when the industry average was 26%, meaning the company has a fast development and should have a greater valuation.

What should you remember about Globex Mining?

Unlike many other exploration companies, Globex Mining owns its properties, and many of them are available for option. The company has a solid growing portfolio and currently owns 214 assets for 89 royalties, has approximately $20M in cash and investments income and no debt, and is working on its share structure with its NCIB. The company has all the characteristics investors are looking for.