Globex Mining Enterprises Inc told shareholders that it has optioned its advanced Magusi polymetallic mine situated north of Quebec's Rouyn-Noranda city to Electro Metals and Mining Inc.
As part of the deal, Globex will receive from Electro Metals roughly $6.40 million in cash staggered over 48 months and around 9 million shares in two different installments, as well as the indicated minimum project expenditure in exchange for 100% interest in the Magusi property, subject to a 3% Gross Metal Royalty (GMR).
The Magusi project consists of 153 claims and one mining concession totaling 13,993 acres in the Duparquet, Hebecourt, and Montbray townships, in Quebec. The property is determined by a series of acid to intermediate volcanic rocks which strike east-west across the length of the property and host the previously mined Fabie Bay Deposit and unmined Magusi Deposit.
READ: Globex Mining options land package in the Joutel camp in Quebec to Orford Mining Corp
The Magusi Deposit has stringer sulphides having a length of around 500 metres (m) and extending to a depth of greater than 400m. Mineralization consists principally of chalcopyrite, sphalerite, pyrite, and pyrrhotite with gold and silver, said the company.
Globex noted that there are several targets for exploration in the immediate areas around the Magusi and Fabie Bay deposits, as well as along the 15 kilometre (km) length of the entire property package. Sulphide intersections are reported in historical drill holes in a number of areas along the length of the property.
The company pointed out that the Magusi mining project is “well advanced” with roads, powerline, settling ponds, freshwater well, and portal with the corresponding start of the ramp and metallurgical testing complete. A 50,000-tonne bulk sample permit has been issued and is current, added the company.
Terms of the deal
Globex will receive the following cash and share payments as well as the indicated minimum project expenditures in exchange for 100% interest in the Magusi property subject to a 3% Gross Metal Royalty:
- Cash Consideration: Over a 48-month period, Globex will receive $6.40 million in cash of which $1 million is payable in the first 12 months ($250,000 on January 1, 2022, $250,000 at six months after signing, and finally $500,000 at 12 months after signing).
- Share Consideration: Over a 48-month period, Globex will receive 7 million shares or $4.80 million worth of shares, whichever is greater; 2 million shares, or $800,000 worth of shares, whichever is greater payable within the first 12 months.
- Work Consideration: A total of $12.25 million of property expenditures over 48 months, including $2 million of expenditures within the first 12 months.
- Positive feasibility study: It will get a positive feasibility study within 48 months.
- Advance Royalty: Globex will receive $100,000 per year in advance royalty starting after 72 months until commercial production recoupable by Electro Metals and Mining from the first Gross Metals Royalty payments due to Globex.
- Gross Metals Royalty: Globex shall retain a 3% Gross Metals Royalty on all payable metals subject to a 1.5% buyback for $2.25 million and the first right of refusal should Globex decide to sell the remaining 1.5% GMR.
Meanwhile, Electro Metals and Mining plans to list its shares on a recognized North American stock exchange in 2022.
Globex Mining holds a diversified North American portfolio of mid-stage exploration, development, and royalty properties containing precious metals base metals and specialty minerals.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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