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Globex Mining Enterprises Inc. (T: GMX, FRA: G1MN, OTCQX: GBLXF) recently announced significant milestones. The company owns a diversified portfolio of North American promising early and mid-stage exploration, development, and Royalty properties. Globex is involved in 218 assets, including 89 Royalties, so you can expect to receive recurring news. Moreover, the property Options that Globex has generated gives the company a strong balance sheet, mixed between a solid cash position and shares from other companies.
Globex Mining isn’t a random mining company. Indeed, it has a proven track of successful properties, creating a maximized value for shareholders. To add value, Globex’s business model is based on acquiring mineral properties and then exploring, Optioning or Joint Venturing, developing to production, and finally selling them outright. Out of the 218 projects, the company is involved in 112 precious metals, 62 base metals & polymetallic, and 44 specialty metals & mineral properties. Included are the 89 Royalties and 8 active Options where Globex can generate cash, share payments, exploration & development expenditures, and Gross Metals Royalties (GMRs). It leverages the company to face difficulties. More than ever, worldwide geopolitical and economic troubles, added to high inflation, have led to a heightened interest in commodities.
Let’s focus on the West Nordeau gold deposit (now incorporated into the Chimo Mine Gold System), acquired by Cartier Resources (TSXV: ECR), and where Globex Mining has a 3% Gross Metal Royalty. The property comprising 54 cells totalling 1,500 hectares indicated strong resources. The Cartier press release stated that the West Nordeau claim block constitutes 311,000 troy ounces of gold. In comparison, it’s twice more than the previous 2009 NI 43-101 resource calculation reported by MRB & Associates for Plato Gold corp. Globex Mining’s Royalty is worth CAD $64.80/ troy ounce. Additionally, it represents $20.1M for the company, assuming that all the defined ounces are on the Globex Royalty claims.
Another exciting piece of news is Globex Optioned the Duquesne West/Ottoman property, located in Quebec, to Emperor Metals (AUOZ.CN). This property covers 1,389 hectares from 38 cells and straddles the gold localized in the Porcupine-Destor Break.
The Option is divided into 3 steps: cash, share payments, and work commitment. The first term of the Option is from cash payments equalling $10M payable over 5 years. The second term is through the payment of 15M shares payable over 5 years, at a minimum price of $0.20 per share. In total, it should represent a deemed value of $3M. The last term of the Option is the work expenditure. The company will have to spend $12M over the 5 years and undertake a NI 43-101 resource estimate.
The last stirring projects Globex is developing are the three properties sold to Starr Peak Exploration (TSXV: STE). For the terms of the sale, Globex Mining keeps a 2.5% Gross Metal Royalty, of which Starr Peak may purchase 1%. The company also received $150,000 in cash payments and 1.2M shares from Starr Peak ($1.66/share). The 3 properties returned strong data. For example, the Normetal/Normetmar property includes the historic Normetal mine, which produced 10.1M tons, grading 2.15% Cu, 5.12% Zn, 0.549 g/t Au and 45.25 g/t Ag (data converted from Canadian Mining Handbook 1975-1976).
The company’s latest financials are for the period ending June 30. All we can say is these numbers are solid. With $25M in total liquid assets for no debt ($10M in cash, $10M in investments, $5M in accounts receivable, etc.), Globex Mining is probably one of the few mining companies to possess such a strong balance sheet. As stated above, the company owns multiple assets, and one of its most significant one is the Francoeur sale for cash ($15,000,000) and a 2% Gross Metal Royalty to Yamana Gold (TO: AUY, market cap: $6.18B). Another exciting piece of information is the company generates income. What it means for investors is it will prevent them from seeing a share dilution. Talking about shares, let’s focus on the structure. The company has 55M shares issued, 2.6M options (avg. exercise price: $0:40), and management the Board own 11%. The stock is traded in North America (TO: GMX, OTC: GBXLF) and Europe (FRA: G1MN). Globex Mining is also focusing on transparency with its shareholders. Recently, CEO Jack Stoch was part of the Mining & Commodities Conference in Munich, where investors and potential investors could interact with him.
The stock remains incredibly undervalued IMHO (your Author). Down almost 50% based on its 6-month chart (data taken from May 9 and November 12), Globex Mining’s market cap only represents $34M. According to the company’s latest cash position, and the West Nordeau gold deposit potential, it would mean $40M worth, way above the current company’s valuation, without all the other Royalties and potential projects. Globex Mining Enterprises Inc. (T: GMX, FRA: G1MN, OTCQX: GBLXF) flies under the radar, and the next bull run should be very profitable for the company. Jack Stoch the President states that he “believes that the next bull run is imminent and it expects Globex’s lage and diversified property portfolio to generate significant added value for shareholders”.