Globex Gets Big Royalties For Free, A Deep Value Stock For The Commodity Super Cycle (ceo.ca)


 

Globex is a mining royalty company and a mine and mining claim wheeler/dealer with high growth, and deep value, and that is in the right place at the right time.

  • Globex often gets a 3% GMR, or Gross Metal Royalty, not the more normal 1% NSR. Since they sell the properties for a profit, those massive royalties are for free.

  • A 3% GMR is extremely valuable, if a mine they sell produces $2 billion in sales at a 10% profit ($200 million) Globex will get $60 million or 30% of the profits yet has no risk nor investment. If a client miner sells $2 billion of minerals and loses $50 million, Globex will still make the $60 million in profits.

  • They have over 200 mining properties and dozens of royalties yet are at a dirt-cheap valuation of Allen EV/EBITDA of 1.55, ROCE of 1,926%, Current Ratio of 131 and with Sales Growth of 335%.

  • Due to having so many deals in place Globex will be a legitimate drilling results news machine on steroids. They pay nothing for the drilling yet benefit greatly when results are good. If 15 clients drill in a year Globex gets the news flow from all of them. 

  • There is only one other deep-value company I know of that gets mining royalties for free. That is GoldSpot. I have a large position in both and think both are outstanding investments.

  • Globex has high insider ownership and a long record of avoiding dilution and wasteful spending.

 

Out today