Globex Mining Enterprises Inc (TSE:GMX) (OTCQX:GLBXF) issued a shareholder update Friday, letting investors know that despite the coronavirus pandemic hamstringing some of its operations, the company has plenty of cash on hand and will receive public sector support to help fund its workforce.
The pandemic has created “times that are, to state it mildly, difficult,” Globex said in a statement. The company’s field work in Quebec and Nova Scotia has been shut down and permitting has been delayed in Ontario. Globex’s office in Rouyn-Noranda, Quebec has been closed, and travel to the city has been limited to essential material and personnel.
That said, Globex said it has made the necessary adjustments to continue conducting business remotely. The company upgraded its VPN system and shifted focus to designing 3D models of its orebodies, drawing maps, updating its website and planning future fieldwork.
The company has also staked multiple new assets and purchased a number of new properties and royalties. The plan is to find potential clients for its assets, which the company admitted is made more difficult by the pandemic.
“We expect that doing deals will be difficult as many exploration companies have limited funds and are loath to spend any of it in the current investment climate,” the company wrote. “Globex, being contrarian, views these times as a period of opportunity and is acting. We have the advantage of funds on hand, both hard cash and flow through, no debt, 100% ownership of most of our almost 200 assets (one-half of which are gold properties) and a team of dedicated and skilled staff.”
Globex has managed to sell a number of its small royalties to Electric Royalties Inc, a company focused on the suite of metals associated with the electric vehicle and battery market. The company will receive $500,000 and 3 million shares of Electric Royalties.
Globex sold its 2% gross metal royalty (GMR) on the Chubb and Bouvier Lithium exploration properties; 2% of its 3% GMR on the Battery Hill Manganese project; 0.5% of its 1% GMR on the Authier Lithium project and 2% GMR on adjoining claims to the east and west; and its 1% GMR on the Mont Sorcier Iron Vanadium deposit but only on Vanadium production.
The transaction is expected to close in the second quarter, despite the difficult market conditions.
“On the negative side of the equation, our revenue not surprisingly is down,” said Globex. “In addition, the price of zinc has tumbled below $0.90 per pound, for the time being, curtailing our royalty stream from the Mid-Tennessee Zinc Mines, although zinc prices seem to be slowly rising."
The company will also receive support from the Canadian government, thanks to a salary subsidy program for companies facing a 15% or greater drop in revenue. Globex expects to receive 75% of its employees’ salaries over the next 12 weeks, totalling more than $130,000.
Separately, the Quebec provincial government recently announced that tax and assessment requirements on exploration properties have been deferred for 12 months.This saves the company hundreds of thousands of dollars and allows it to focus on upgrading high-priority assets.
Globex recently acquired a trio of claims at the west end of its Tiblemont/Tavernier gold/copper/zinc property.
At the north end of the newly acquired claims, the company intersected gold values of 19.6 grams per ton (g/t) over 1.5 meters (m), 2.46 g/t over 1 m, 3.91 g/t over 1 m, 23.6 g/t over 1 m, 7.5 g/t over 1.5 m, 5.9 g/t over 4 m, 9.7 g/t over 1 m and 4.29 g/t over 1 m.
Beyond the south boundary of the newly acquired cells, historical drill holes report up to 15.8 g/t over 3 m, 6.34 g/t over 6.8 m and 5.9 g/t over 3.8 m as well as a historical non-NI 43-101 compliant resource of 87,000 tons grading 5.8 g/t.
The company also purchased an underlying 2% net smelter return (NSR) attached to the property. There is an additional 1% NSR, 0.5% of which Globex can purchase for $100,000 and a first right of refusal on the remaining 0.5% NSR.
At the east end of the 23-km Tiblemont/Tavernier property, the company staked 27 cells covering a number of mineralized occurrences, including drill hole MM-10-03, which returned 6.57 g/t over 1 m and 2.21 g/t over 1 m. It also returned other gold values over a 27-m wide shear zone, namely 3.37 g/t in a grab sample toward the south side of the claim block, and "the Jolin showing with gold values of 4.9 g/t, silver values of 2.8 g/t, in addition to 4.84 % zinc and 0.19% copper."
Other properties the company staked include:
- Several platinum/palladium showings with up to 8.03 g/t and 5.15 g/t, respectively, in grab samples.
- Several rare earth showings southwest of Turner Falls rare earth property with total rare earth oxide of up to 2.3% plus ziconium dioxide
- Gold showings and drill hole intersections west of Rouyn-Noranda with grab samples running up to 2.73 g/t and a drill hole returning 4.2 g/t over 1 m
- A series of cells in the area of the Casa Berardi gold mine
- A high-grade silica zone
- A gold property south of Timmins, Ontario
- The Vermont Zinc property, which has a historical noncompliant resource of 193,782 tons grading 58.62 g/t silver and 3.41% zinc, as well as lead and gold
- A number of claims with lithium intersections in drill holes
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