QIS Update #1 - 2016 - Quattro Exploration acquisition and Newlox Gold files NI 43-101 2016 - January 21st 2016
Included in this update:
- Newlox Gold Ventures files NI 43-101 technical report
- Quattro Exploration & Production announces $4.15 million acquisition
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Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.04 (coverage commenced March 31/14 - $0.05)
Newlox Gold Ventures Corp. has filed a technical report prepared under National Instrument 43-101 (standards of disclosure for mineral projects) prepared by Stewart A. Jackson, PhD, PGeo (Ontario), James A. Turner, PGeo (British Columbia), and Rolando Pereira Molina, PhD, MSc, dated Dec. 9, 2015, and titled "National Instrument 43-101 report, Newlox Gold Ventures Inc., environmental reclamation gold project, Las Juntas, Costa Rica." The technical report is available on SEDAR.
James Miller-Tait, PGeo, director of the company, is the qualified person for the company and has reviewed the contents of the news release.
QIS Capital: Newlox has been working on its 43-101 report since early 2015 when the BSCS ruled that Newlox must prepare a report despite the fact that Newlox did not classify itself as a mining or mineral exploration company. As such, Newlox therefore holds no resources or reserves as defined by National Instrument 43-101 or any mineral exploration or exploitation properties. The company is a technology and trading company developing processes for economically viable waste remediation, and therefore makes no claims in regard to tonnage or grade of feed material.
We also note that Newlox was reclassified under its CSE listing in mid-January 2016 as a CleanTech company.
The 43-101 is a thorough document describing the company’s operations, history, and business opportunity. Those who have further questions after reading the document are invited to contact the company or QIS Capital.
Quattro Exploration and Production Ltd. (QXP:TSX-V)
Current Price: $0.16 (coverage commenced Sep. 3/15 - $0.18)
Quattro Exploration and Production Ltd. has announced the purchase of a 100% interest in oil and gas production, facilities and lands in west central Saskatchewan from an Alberta-based oil and gas exploration and production company.
The purchase price for the acquisition was $4,150,000, to be paid through the issuance of 35,000 non-voting, Class C, series 3 preferred shares at a deemed price of $100 per share and $650,000 in restricted cash, held on deposit, anticipated to be remitted to the vendor before January 31, 2016. The properties are located in the region of Superb, Saskatchewan, where production averaged 160 bbls per day in 2015.
Based on the vendor’s independent 2014 year end reserve report, current pricing, and the execution of a modest capital budget, current proven reserves are 340,000, while proven and probable reserves are estimated to be approximately 540,000 bbls of oil.
All conditions of closing of the purchase of the properties are anticipated to be completed on or before January 31st, 2016, with the acquisition having an effective date of December 31, 2015, and is subject to a number of customary conditions including, but not limited to, completion of due diligence and approval of the TSX Venture Exchange.
The preferred shares are priced at $100 per share and pay an annual preferred dividend of $3.50 per share. The holder will have the right on the anniversary of the 2nd year of issuance to convert the preferred shares into Class A common shares at a ratio of 40 Class A shares for each preferred share converted, valuing Quattro’s Class A common shares upon conversion at a deemed price $2.50 per share.
“Upon the closing of this acquisition of oil production, at a discount to current oil and natural gas pricing, the additional prospective lands, and the extensive operated facilities in west central Saskatchewan positions Quattro with the potential to collectively reach its initial target of 1,000 boe/d from its combination of exploratory and producing properties in Saskatchewan,” said Leonard Van Betuw, President and CEO.
Summary of the Acquisition
Annual Production: 160 bbls. per day with extensive operated facilities, $25,935 per bbl/d on a PDP basis
Reserves: 540,000 bbls of estimated reserves, based on a proven plus probable basis**
Facilities: Current and maintained, with excess capacity.
Land: 14,275 acres; 965 developed and 13,310 undeveloped, valued at $563,675.
Additional Potential: (i) optimization, (ii) work-overs and (iii) seismically defined, undeveloped potential
**2P reserves are estimates based on the review of 3rd party engineering provided by the seller, and internally verified by Quattro during its due diligence process.
QIS Capital: Quattro has been successful in closing several deals during a very depressed period for those in the Canadian oil and gas industry. This acquisition continues to add to the company’s production levels as well as future drilling operations. Once again, Quattro was successful in closing this acquisition without expending precious upfront capital.
Despite the downturn in the industry, Quattro continues to produce positive financial and operating results, is taking advantage of inexpensive and accretive acquisitions, is maintaining a net debt to cash flow ratio of less than 1X, and is targeting production to more than double in the next 12 months. For 2016, the company has increased its capital budget to $12.8 million after securing additional debt financing in September 2015.
Disclaimer: This article is for informational purposes only. The information contained within this article should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The company profiled assumes no liability for the information presented. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author(s) owns directly or indirectly 3,578,000 shares, 2,000,000 warrants, a $54,471 convertible debenture and a $10,000 convertible debenture of Newlox Gold Ventures Corp., and 171,500 shares of Quattro Exploration and Production Ltd. QIS Capital may have a financial relationship with these companies and may trade in the stocks mentioned. No stock exchange has approved or disapproved of the information contained herein. Copyright © 2003 - 2016 QIS Capital Corporation.