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Globex Mining signs 60-day standstill deal relating to spin off of Chibougamau assets

Globex Mining (TSE:GMX) (OTC:GLBXF) said Thursday that it has signed a 60-day standstill agreement relating to its plans to spin off its Chibougamau assets in Quebec to shareholders, long enough for an undisclosed third party to conduct due diligence on the land package.

Globex recently completed an NI 43-101 compliant technical report on the Berrigan poly-metallic property in Chibougamau, and decided to proceed with the paper work required for a spin out of its assets in the region, which includes a number of properties.

However, the Quebec-based mineral company said that in the meantime, it was approached by a long-interested third party, and a stand-still agreement was signed, entitling the interested buyer with 60 days during which it will conduct due diligence on the copper-gold-zinc assets.

In exchange for this delay, Globex will receive a non-refundable cash payment of $0.15 million, and neither party is obliged to reach a formal agreement after the due diligence period has ended.

Globex said in a statement that it has told the interested party that any future deal must equal or exceed the benefits of any spin-off scenario, including a significant share distribution to Globex shareholders and the company itself, as well as a retained interest and royalty in the properties.

"Globex’s view is that in the worst case, we do not reach a definitive agreement with the third party and are $150,000 ahead, a sum which will cover a good part of our spin-off costs when we proceed with said transaction," explained the company.

"In the best case scenario, we achieve our objective which is to realize the value of the assets through partially separating them from Globex, placing a dividend in shareholders hands, seeing significant investment in the assets and focused asset management, while ensuring Globex a continued retained interest in the assets."

Under the original, proposed spin-off transaction, Globex shareholders would receive shares in the new entity, to be called Chibougamau Indepedent Mines. The move is part of Globex's plan to increase value for shareholders, and the transfer was expected to be the first of many spin-offs for the company.

The new company would include claims covering the former Bateman Bay, Grandroy, Kokko Creek, Quebec Chibougamau and S-3 Mines, as well as recently-acquired parts of the Copper Cliff and Jaculet Mines.

In addition, the spin off would include the partially-defined and unmined Berrigan deposit and Tommy Zones, as well as a large package of claims with many copper and gold intersections in drill holes.

Globex has more than 100 properties in North America, covering precious metal, base metal, industrial minerals and specialty minerals.