Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Globex Mining Announces $4.25 Mln Private Placement, And $10 Mln Financing For Chibougamau Independent Mines Subsidiary

Globex Mining Enterprises (TSE:GMX) (OTCQX:GLBXF) announced Thursday two private placement agreements, one for itself and one for its subsidiary, Chibougamau Independent Mines.

Under the first agreement, Globex has signed an engagement letter with Marquest Asset Management, as a co-lead agent with Casimir Capital, for a private placement of up to 2.78 million flow through shares at a price of $1.30 each, for maximum gross proceeds of $3.6 million.

This placement also includes up to 607,142 common shares at a price of $1.05 per share, for maximum gross proceeds of $637,500.

The total amount raised from the offering will be $4.25 million, which will be used for exploration on its properties in Quebec and Ontario, as well as for potential land acquisitions and working capital.

The company noted that purchasers of the so-called "flow-through" shares will be entitled to claim a 100 per cent deduction of the amount of their subscription for Canadian federal and Quebec provincial tax purposes for the 2012 taxation year.

This offering is expected to close in early November.

In addition, Globex's Chibougamau subsidiary has signed an engagement letter with the same agents for a private placement of up to 10.5 million flow through units at a price of 65 cents each, and up to 6.4 million "hard dollar" units at a price of 50 cents each, for total maximum gross proceeds of $10 million.

Each of the "flow-through" units and "hard-dollar" units will be comprised of one common share of the subsidiary, and one-half of a share purchase warrant. Every full warrant will allow the holder to buy one additional share at a price of 80 cents each for a period of one year.

These proceeds will be used for exploration on Chibougamau's properties in Quebec, and for working capital. This offering is expected to close in mid-December.

Both deals are subject to regulatory approvals, and standard closing conditions.

Chibougamau's placement is conditional on Globex completing the spin out of the subsidiary, as announced last month, as well as Chibougamau obtaining a listing for its shares on the TSX Venture Exchange.

In September, Globex said it snagged an interim order from the Quebec Superior Court for the spin-out of its subsidiary Chibougamau Independent Mines to its shareholders.

Globex said its board of directors believes that the deal will "enhance shareholder value" by allowing each company to focus on exploring and developing its own mineral projects.

Once the terms of the arrangement are decided, Globex will transfer its interest in 10 mineral resource properties - known as the Chibougamau Mining Camp - which are subject to a three-per-cent gross metal royalty - together with cash and certain securities to CIM.

Globex's shareholders will receive one common share of CIM for each share of Globex held on the effective date of the arrangement.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.