Analyzing Small Cap Stocks: Globex Mining 

The TDR Three Key Takeaways regarding Globex Mining and Small Cap Stocks:

  • Globex Mining’s unique mineral bank model minimizes risk and ensures steady revenue.
  • Globex Mining reported $4.4 million in revenue for the last 12 months.
  • Globex Mining exhibits strong financial health with a credit score of 54.3.

Globex Mining (TSX: GMX, OTC: GLBXF), based in Northern Quebec, operates a distinctive business model in the mining sector. Unlike traditional mining companies, Globex functions as a mineral bank, holding a portfolio of 248 properties acquired at various prices over time. This approach not only diversifies their assets across precious metals, specialty minerals, and base metals but also mitigates risks associated with direct mining operations.

Globex Mining’s financial performance over the past year highlights the stability and potential of its business model. The company reported $4.4 million in revenue for the last 12 months. Despite the inherent volatility in the mining industry, Globex has managed to maintain consistent revenue growth. A notable instance was in December 2021, when the company achieved $35 million in revenue, demonstrating the significant impact of successful transactions.

The company’s levered free cash flow was $2.8 million last year, an increase from $1.7 million the previous year. This positive cash flow indicates effective financial management and the ability to sustain operations and invest in new opportunities. Additionally, Globex reported a net income of $3.1 million, reflecting strong profitability.

Globex Mining’s assets are strategically undervalued on its balance sheet. The company owns its properties outright, and these are not revalued regularly, resulting in artificially low valuations. This conservative approach provides a hidden value potential for investors, as the true market value of these properties is likely much higher.

Globex’s approach involves leasing its properties to other companies for exploration and development. This model ensures that Globex receives upfront payments and quarterly rent, along with royalties from successful mining ventures. This strategy minimizes risk while generating continuous revenue streams.

Globex Mining boasts a strong credit score of 54.3, the highest we have seen on the small-cap Sunday. This high score is attributable to the company’s significant cash reserves and minimal debt. As of the latest reports, Globex holds $28 million in liquid assets, ensuring financial stability and the ability to capitalize on market opportunities without financial strain.

The company is well-positioned in the mining sector, with a diversified portfolio that includes gold, silver, manganese, rare earth elements, copper, and lead. The company’s mineral bank model, revenue growth, financial health, and asset management offer a strong investment opportunity in the small-cap mining sector. Its innovative approach and diversified portfolio suggest potential for future growth and profitability, making it an intriguing option for investors. Want to be updated on all things Psychedelic, Cannabis, AI, and Crypto? Subscribe to our Daily Baked in Newsletter!

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