GLOBEX MINING ENTERPRISES INC. GLOBEX MINING ENTERPRISES INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
THREE MONTHS ENDED MARCH 31, 2024
(EXPRESSED IN CANADIAN DOLLARS)
86, 14th Street, Rouyn-Noranda, Québec J9X 2J1, CANADA
Telephone: (819) 797.5242 Fax.: (819) 797-1470info@globexmining.comwww.globexmining.com
GMX - Toronto Stock Exchange | G1MN - Frankfurt Stock Exchange | GLBXF - OTCQX International, USA |
Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
The following Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of Globex Mining Enterprises Inc. (the "Corporation", "we" or "Globex") constitutes management's review of the factors that affected the Corporation's financial and operating performance for the three months ended March 31, 2024. This MD&A was prepared in compliance with the requirements of National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Corporation for the three months ended March 31, 2024 ("Q1 2023"), together with the notes thereto. Results are reported in Canadian dollars unless otherwise noted. The Corporation's unaudited condensed interim consolidated financial statements and the financial information contained in this MD&A are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. Information contained herein is presented as of May 13, 2024 unless otherwise indicated.
For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors (the "Board"), considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the Corporation's common shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.
Further information about the Corporation and its operations is available on the Corporation's website at www.globexmining.comand on SEDAR+ at www.sedarplus.ca.
This MD&A contains forward-looking information. See "Cautionary Note Regarding Forward-Looking Statements" below. As well, see "Risks and Uncertainties" below.
Description of Business and Nature of Operations
Globex is a North American focused exploration and project generator/property bank which seeks to create shareholder value by acquiring mineral properties, undertaking limited exploration and preparing the properties for optioning, joint venturing or outright sale, all with the goal of advancing the projects towards production.
As part of its total compensation arrangements, Globex seeks to secure long-term royalty arrangements that will provide continued financial benefits to Globex and its shareholders.
Currently, we are focused on acquiring and vending properties, acquiring properties which meet one or more of the following criteria:
- have historic or National Instrument 43-101Standards of Disclosure for Mineral Projects ("NI 43- 101") mineral resources;
- have reported past production;
- have established drill targets or drill intersections of economic merit, and
- are located on major geological structures.
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
Under Globex property option agreements, generally the optionee gains the rights to and control of the property and the right to acquire an interest in the property in exchange for:
- a series of annual cash and/or share payments;
- an exploration work commitment; as well as
- a Gross Metal Royalty ("GMR") in favour of Globex.
Upon the satisfaction of the option terms, the property interest is transferred to the optionee. The option contract will terminate if annual payments and/or work commitments are not met. Globex may retain a GMR or other carried or participating interest in the property when it is transferred. Outright property sales may include cash and/or share payments and a form of royalty interest payable when projects achieve commercial production or another negotiated milestone.
Our current mineral portfolio consists of approximately 250 early to mid-stage exploration, development and royalty properties which contain Base Metals (copper, nickel, zinc, lead), Precious Metals (gold, silver, platinum, palladium), Specialty Metals and Minerals (manganese, vanadium, titanium dioxide, iron, molybdenum, lithium, cobalt, scandium, antimony, uranium, rare earths and associated elements) and Industrial Minerals (mica, silica, potassic feldspar, pyrophyllite, kaolin, dolomite as well as talc and magnesite).
Globex was incorporated under the laws of the Province of Québec and following the approval of shareholders on June 12, 2014 was continued under the Canada Business Corporations Act, effective October 28, 2014. The head office is at 89 Belsize Drive, Toronto, Ontario M4S 1L3 and the principal business office is at 86, 14th Street, Rouyn-Noranda, Québec, J9X 2J1, Canada.
Globex's common shares are listed on the Toronto Stock Exchange ("TSX") under the symbol GMX, and in Europe under the symbol G1MN on the Frankfurt, Stuttgart, Berlin, Munich, Tradegate, and Lang & Schwarz Stock, Long & Black, and TTM Zero Exchanges. Globex trades under the symbol GLBXF on the OTCQX International Exchange in the United States.
Economic Environment and Corporate Focus
Economic Environment
At this time, there appears to be consensus that while volatile, commodity prices will increase over the near- term forecast period as a result of the lack of new production capacity coming on stream. Commodities are priced globally in U.S. currency so their prices typically move in the opposite direction from the U.S. dollar.
During property acquisition, exploration, and financial planning, Globex's management monitors metal demand and supply balances as well as price trends. In addition to monitoring metal prices, management also monitors financing activities in the junior mining sector as this represents the sector in which both current and potential partners generate the financing needed to complete option arrangements with Globex.
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
The following table highlights the comparative metal prices which the Corporation monitors:
Summary of Metal Prices
Current Prices with Comparative (2020 - 2024)
Q1 2024 | 2023 | 2022 | 2021 | 2020 | |||||||||||||
Commodities | (USD) | (USD) | (USD) | (USD) | (USD) | ||||||||||||
Gold ($/oz.) | 2,214.35 | 2,062.59 | 1,815.40 | 1,829.80 | 1,898.00 | ||||||||||||
Silver ($/oz.) | 24.54 | 23.79 | 23.88 | 23.30 | 26.37 | ||||||||||||
Nickel ($/pound) | 7.52 | 7.43 | 10.54 | 9.43 | 7.54 | ||||||||||||
Copper ($/pound) | 4.01 | 3.88 | 3.74 | 4.43 | 3.51 | ||||||||||||
Zinc ($/pound) | 1.11 | 1.21 | 1.35 | 1.63 | 1.24 |
Financial and Operating Highlights
Corporate
During Q1 2024, an aggregate of 71,000 common shares were repurchased for cash consideration of $58,568 under Globex's normal course issuer bid.
Revenues
In Q1 2024, Globex reported option income of $202,000 (three months ended March 31, 2023 ("Q1 2023")
- $122,084) which consisted of cash receipts of $202,000 (Q1 2023 - $87,500) and shares in optionee corporations with a fair market value of $nil (Q1 2023 - $34,584).
- On January 11, 2023, Globex received a cash payment of $25,000 from Brunswick Exploration Inc. ("Brunswick") in connection with the Lac Escale property. In addition, on February 15, 2023, Globex received 41,667 common shares with a fair value of $34,584 from Brunswick.
- On January 12, 2023, Globex received a cash payment of $62,500 from Maple Gold Mines Ltd. in connection with the Eagle Gold Mine property.
During Q1 2024, Globex recorded metal royalty income of $238,795 (Q1 2023 - $nil).
Outlook
The "Economic Environment and Corporate Focus" section above highlights that management monitors changes in demand/supply balance and metal price trends. Recently, we have seen a tepid revival in global markets in general and commodity markets in particular, other than battery metals and more recently gold and copper.
For Q1 2024, our option/sale income and royalties were reported at $440,795 as compared to $122,084 for Q1 2023. We have continued our marketing efforts and are projecting option, sales and royalty revenues in excess of $5,000,000 for 2024 based on existing contracts, current discussions and market conditions.
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
During 2023, the price of metals and minerals other than precious metals initially decreased adding pressure on exploration activities. Subsequently, many of these metal prices reversed and rose to new highs.
While we are optimistic, we also recognize the risks and volatility that currently exist partly because of the uncertainty related to current metal prices and world economic factors.
On the exploration front, we have developed plans and budgets with a view to gaining additional project knowledge and leveraging this into sale/option agreements.
Despite the potential risks and uncertainties, Globex believes it is well positioned with a combination of first- class assets as well as the human and corporate resources necessary to achieve our strategic objectives.
Environmental Contingency
The Corporation's exploration activities are subject to various laws and regulations relating to the protection of the environment. These environmental regulations are continually changing and are generally becoming more restrictive. As of March 31, 2024, the Corporation does not believe that there are any significant environmental obligations requiring material capital outlays in the immediate future.
Off-Balance Sheet Arrangements
As of the date of this MD&A, the Corporation does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Corporation including, without limitation, such considerations as liquidity and capital resources that have not previously been discussed.
Proposed Transactions
There are several proposed transactions that may be of a material nature being considered by the Corporation. The Corporation continues to evaluate properties and corporate entities that it may acquire in the future.
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
Selected Quarterly Information
Profit or Loss | ||||||||||
Basic | Diluted | |||||||||
Income | Income | |||||||||
Total | (Loss) Per | (Loss) Per | Total | |||||||
Revenue | Total | Share (11) | Share (11) | Assets | ||||||
Three Months Ended | ($) | ($) | ($) | ($) | ($) | |||||
2022-June 30 (9) | 128,485 | (4,409,206) | (1) | (0.08) | (0.08) | 30,447,271 | ||||
2022-September 30 (9) | 1,010,553 | (368,538) | (2) | (0.01) | (0.01) | 30,322,056 | ||||
2022-December 31 (10) | 316,448 | 908,366 | (3) | 0.02 | 0.02 | 31,254,904 | ||||
2023-March 31 | (9) | 122,084 | 543,800 | (4) | 0.01 | 0.01 | 31,379,892 | |||
2023-June 30 | (9) | 346,863 | (550,122) | (5) | (0.01) | (0.01) | 30,962,087 | |||
2023-September 30 | (9) | 578,015 | (2,511,297) | (6) | (0.05) | (0.05) | 28,636,164 | |||
2023-December 31 (10) | 3,081,223 | 3,890,605 | (7) | 0.07 | 0.07 | 32,423,698 | ||||
2024-March 31 | (9) | 440,795 | 27,012 | (8) | 0.00 | 0.00 | 32,923,806 |
- Net loss of $4,409,206 principally relates to a decrease in fair value of financial assets of $3,618,520, exploration and evaluation expenditures of $571,951, professional fees and outside services of $199,466, administration expenses of $123,102, salaries of $505,374, depreciation of $20,673 and loss on the sale of investments of $32,768. These costs were offset by revenues of $128,485, finance income of $187,250, gain on the sale of investments of $531,898, management services of $2,872, other income of $14,250, gain on foreign exchange of $21,855 and income tax recovery of $345,525.
- Net loss of $368,538 principally relates to a decrease in fair value of financial assets of $453,652, exploration and evaluation expenditures of $759,008, professional fees and outside services of $159,556, administration expenses of $124,280, salaries of $128,465, depreciation of $20,673 and loss on the sale of investments of $47,693. These costs were offset by revenues of $1,010,553, finance income of $137,511, other income of $10,605, gain on foreign exchange of $44,753 and income tax recovery of $61,556.
- Net income of $908,366 principally relates to revenues of $316,448, finance income of $140,301, other income of $32,845, gain on foreign exchange of $8,738, an increase in fair value of financial assets of $1,062,880 and income tax expense of $445,495. These costs were offset by exploration and evaluation expenditures of $202,563, professional fees and outside services of $192,718, administration expenses of $103,662, salaries of $226,424, depreciation of $20,828, loss on the sale of investments of $47,130 and joint venture loss of $369,085.
- Net income of $543,800 principally relates to revenues of $122,084, finance income of $140,014, other income of $32,600, gain on foreign exchange of $339, an increase in fair value of financial assets of $800,886, gain on the sale of investments of $15,527, interest and dividend income of $91,906 and joint venture income of $7,500. These costs were offset by exploration and evaluation expenditures of $262,559, professional fees and outside services of $169,709, administration expenses of $106,429, salaries of $110,846 and depreciation of $20,828.
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
- Net loss of $550,122 principally relates to exploration and evaluation expenditures of $114,054, professional fees and outside services of $154,478, administration expenses of $119,058, salaries of $145,039, share-based compensation of $38,111, depreciation of $20,828, loss on foreign exchange of $14,811, decrease in fair value of financial assets of $1,112,046 and joint venture loss of $52,500. These costs were offset by revenues of $346,863, finance income of $140,901, other income of $6,000, gain on the sale of investments of $296,765, interest and dividend income of $102,383 and income tax recovery of $327,891.
- Net loss of $2,511,297 principally relates to exploration and evaluation expenditures of $361,262, professional fees and outside services of $197,877, administration expenses of $125,901, salaries of $139,995, share-based compensation of $218,822, depreciation of $21,415, decrease in fair value of financial assets of $1,687,222, loss on the sale of investments of $597,110 and joint venture loss of $30,000. These costs were offset by revenues of $578,015, finance income of $108,247, other income of $16,923, interest and dividend income of $144,500 and gain on foreign exchange of $15,080.
- Net income of $3,890,605 principally relates to revenues of $3,081,223, finance income of $110,441, other income of $302,535, interest and dividend income of $190,487, increase in fair value of financial assets of $703,168, joint venture income of $21,667, exploration and evaluation expenditures recovery of $7,181 and income tax recovery of $17,225. These costs were offset by professional fees and outside services of $123,954, administration expenses of $112,802, salaries of $232,926, depreciation of $21,416, loss on the sale of investments of $25,214, bad debt expense of $13,272 and loss on foreign exchange of $13,738.
- Net income of $27,012 principally relates to revenues of $440,795, finance income of $111,448, interest and dividend income of $178,196, gain on foreign exchange of $17,014 and joint venture income of $459,272. These costs were offset by professional fees and outside services of $203,473, administration expenses of $170,474, salaries of $153,632, depreciation of $21,416, loss on the sale of investments of $11,518, decrease in fair value of financial assets of $170,717, exploration and evaluation expenditures of $455,437 and income tax expense of $1,200.
- Unaudited.
- Audited.
- Per share amounts are rounded to the nearest cent, therefore aggregating quarterly amounts may not reconcile to year-to-date per share amounts.
Results of Operations
Three months ended March 31, 2024 compared to three months ended March 31, 2023
The Corporation's net income totaled $27,012 for Q1 2024 with basic and diluted income per share of $0.00. This compares to a net income of $543,800 with basic and diluted income per share of $0.01 for Q1 2023. The decrease in net loss was principally due to:
- Revenues increased to $440,795 for Q1 2024 compared to $122,084 for Q1 2023. In Q1 2024, Globex reported option income of $202,000 (Q1 2023 - $122,084) and royalties of $238,795 (Q1 2023 - $nil).
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
- Exploration and evaluation expenditures increased to $455,437 for Q1 2024 compared to an expense of $262,559 for Q1 2023. The increase can be attributed to acquisition costs and exploration expenditures incurred on various projects. See "Mineral Exploration Properties" below for a summary of the exploration programs for Globex's property portfolio.
- Professional fees and outside services increased in Q1 2024 to $203,473 compared to $169,709 for Q1 2023, primarily due to higher corporate activity requiring external professional support services. Professional fees and outside services consisted of investor relations, audit and accounting fees, management consulting, other professional fees, legal fees and filing fees.
- Loss on the sale of investments increased in Q1 2024 to a loss of $11,518 compared to a gain of $15,527 for Q1 2023.
- Decrease in fair value of financial assets increased in Q1 2024 to $170,717 compared to an increase of $800,886 for Q1 2023. The increase in loss was due to the change in fair value of investments.
- Joint venture income increased in Q1 2024 to $459,272 compared to joint venture income of $7,500 for Q1 2023. The increase was due the Corporation's 50% share of Duparquet Assets Limited ("DAL") net income during the period.
- All other expenses related to general working capital purposes.
The Corporation's total assets at March 31, 2024 were $32,923,806 (December 31, 2023 - $32,423,858) against total liabilities of $703,057 (December 31, 2023 - $171,401). During Q1 2024, operating activities generated inflows of $458,883, financing activities generated outflows of $58,568 and investing activities generated outflows of $71,928. The Corporation has sufficient current assets to pay its existing liabilities of $703,065 at March 31, 2024.
Liquidity and Capital Resources
At March 31, 2024, the Corporation had cash and cash equivalents of $6,952,522 (December 31, 2023 - $6,611,783). In addition, it had investments with a fair market value of $17,898,906 (December 31, 2023 - $18,014,269) which represents shares received under mining option and sale agreements.
The Corporation's working capital (based on current assets minus current liabilities) was $27,629,400 at March 31, 2024 (December 31, 2023 - $28,161,013).
Globex has a number of sale and option agreements in place and under discussion which are estimated to potentially generate gross option payments in excess of $5.0 million in 2024. These payments are subject to the optionee having sufficient funds available to meet the obligations and option terms of potential new options being approved. We monitor the outstanding amounts on an ongoing basis.
The Corporation continues to negotiate option and royalty agreements and the potential sale of properties.
The Corporation believes that based on the current cash and working capital position and its access to liquidity sources, it has sufficient resources readily available to meet its current exploration spending commitments and corporate and administrative requirements for the next twelve months.
See "Cautionary Note Regarding Forward-Looking Statements" below.
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
Globex does not have any long-term debt or similar contractual commitments.
Cash Flow
During Q1 2024, operating activities generated inflows of $458,883, financing activities generated outflows of $58,568 and investing activities generated outflows of $71,928.
Operating, financing and investing activities as well as the effect of exchange rate changes on cash held in foreign currencies during Q1 2024 resulted in an increase in cash and cash equivalents of $340,739.
Qualified Person
All scientific and technical information contained in this MD&A was prepared by the Corporation's geological staff under the supervision of Qualified Persons as defined in NI 43-101. The exploration and technical information presented in this MD&A has been reviewed by Pierre Riopel, Chief Geologist of Globex, who is a Qualified Person under NI 43-101.
Mineral Exploration Properties
Exploration expenditures in Q1 2024 totaled $455,437 (Q1 2023 - $262,559). During Q1 2024 and Q1 2023, exploration and evaluation expenditures were incurred on the various projects as follows:
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, | March 31, | ||||||||
2024 | 2023 | ||||||||
Ontario (Township) | ($) | ($) | |||||||
Laguerre-Knutson (Hearst, McVittie) | 3,171 | 5,761 | |||||||
Timmins Talc-Magnesite (Deloro) | 9,106 | 1,979 | |||||||
Wyse Silica Quartz (Wyse) | 19,260 | 19,014 | |||||||
Other projects | 11,900 | 6,801 | |||||||
Total | 43,437 | 33,555 | |||||||
Three Months | Three Months | ||||||||
Ended | Ended | ||||||||
March 31, | March 31, | ||||||||
2024 | 2023 | ||||||||
Québec (Township) | ($) | ($) | |||||||
Beauchastel - Rouyn (Beauchastel) | 983 | 9,519 | |||||||
Blackcliff (Malartic) (50% interest) | 520 | 38,028 | |||||||
Cavalier (Cavalier) | 18,386 | nil | |||||||
Courville (Courville) | 5,694 | 4,473 | |||||||
Fabie Bay / Magusi (Hebecourt, Montbray) | 1,121 | nil | |||||||
Great Plains (Clermont) | 1,003 | 11,021 |
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Globex Mining Enterprises Inc.
Management's Discussion & Analysis
Three Months Ended March 31, 2024
Dated: May 13, 2024
Three Months | Three Months | ||||||||||
Ended | Ended | ||||||||||
March 31, | March 31, | ||||||||||
2024 | 2023 | ||||||||||
Québec (Township) | ($) | ($) | |||||||||
Hard Rock (Aiguebelle) | 7,219 | nil | |||||||||
Icon Mine (32I04) | 398 | 7,432 | |||||||||
Ironwood (Cadillac) | nil | 12,305 | |||||||||
Lac Cratere (13M05) | 13,194 | nil | |||||||||
Lac Guillaume Nord (23J14) | 5,861 | nil | |||||||||
Lac Odon (32J09) | 3,044 | nil | |||||||||
Lyndhurst (Destor/Poularies) | 2,246 | nil | |||||||||
Riviere Opinaca (33C04-05,33D01-08) | 5,480 | nil | |||||||||
Rouyn-Merger (Rouyn) | nil | 4,130 | |||||||||
Ruisseau Marriott (Hebecourt) | 1,858 | 6,601 | |||||||||
Smith-Zulapa-Vianor (Tiblemont) | 8,551 | nil | |||||||||
Standard Gold (Duverney) | 14,501 | nil | |||||||||
Tavernier Tiblemont (Tavernier) | 4,080 | nil | |||||||||
Venus (Barraute) | nil | 3,971 | |||||||||
Victoria Group (Clericy) | 2,263 | 10,505 | |||||||||
Weidner (Chazel) | 26,082 | nil | |||||||||
Wrightbar Gold Mine (Bourlamaque) | 4,500 | nil | |||||||||
Other projects | 36,339 | 30,522 | |||||||||
Québec general exploration | 93,871 | 54,741 | |||||||||
Tax credit related to resources | (68,560) | nil | |||||||||
Total | 188,634 | 193,248 | |||||||||
Three Months | Three Months | ||||||||||
Ended | Ended | ||||||||||
March 31, | March 31, | ||||||||||
2024 | 2023 | ||||||||||
Other regions | ($) | ($) | |||||||||
Nova Scotia | 649 | 4,539 | |||||||||
New Brunswick | nil | 283 | |||||||||
Canada (others) | 200,000 | 147 | |||||||||
Europe | nil | 5,870 | |||||||||
Other including Vulcan Mountain (USA) | 22,717 | 24,917 | |||||||||
Total | 223,366 | 35,756 |
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Globex Mining Enterprises Inc. published this content on 15 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 14:25:06 UTC.
