QIS Update #1 - 2019 - Deer Horn Capital Conference Call and Shareholder Letter, latest news from International Frontier Resources - January 14th 2019
Included in this update:
- Conference Call with Deer Horn Capital management on January 22nd.
- Deer Horn Capital Sends Out Shareholder Update (DHC:CSE)
- International Frontier Drilling Reaches Total Depth at TEC-11 (IFR:TSX-V)
Happy New Year to all of our readers! The markets, including small-cap issues have finally had some positive momentum over the past couple of weeks. Stocks with decent liquidity have mostly come off of their lows and most of the stocks we have been buying on weakness are finally showing a little strength. There are still a number of headwinds in the market and most of the readers we have been speaking with are expecting some challenging economic conditions in the not too distant future. Generally that means turning to a little more safety in fundamental companies with stable balance sheets and lower than average trading multiples. Wishing all of our readers a year filled with prosperity and happiness!
We are going to try a new feature next week and will be doing a QIS Capital Conference Call with Tyrone Docherty, President of Deer Horn Capital Inc. We will hold two calls on Tuesday, January 22nd at 4:00pm EST (1:00 PST) and 9:00pm EST (6:00pm PST). Please see below for details of the call and register by emailing us at firstname.lastname@example.org so we know how many to expect. We hope to do a minimum of one conference call each month during 2019 highlighting some quality small-cap companies.
Please feel free to email us anytime at email@example.com or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Deer Horn Capital Inc. (DHC:CSE)
Current Price: $0.22 (coverage commenced April 10/18 - $0.17)
DEER HORN CAPITAL SENDS OUT SHAREHOLDER UPDATE
January 9, 2019
TO OUR SHAREHOLDERS AND DEER HORN SUPPORTERS,
I’m taking this opportunity to wish all of you a very happy, healthy and prosperous 2019. I also want to give you an update on our status and plans for 2019 at Deer Horn.
But First, Here’s Why I Believe in This Company
Over the past 20+ years, I have taken on only two ventures. The first was Quinto Mining, where with limited resources in a difficult market we raised more than $30 million and advanced a Quebec iron ore property to a viable project. We then sold Quinto to Consolidated Thompson Iron Mines for a share value equal to $175M (starting from $4M). I view Deer Horn as a very similar opportunity, which is why I enthusiastically became president and CEO. My long-term view is the same as it was with Quinto.
In Deer Horn, we have:
An exceptional property in British Columbia covering over 51 square kilometers
High grades for silver, gold and tellurium with targets for copper, tungsten, zinc, lead and molybdenum
The only known tellurium property in North America with an NI 43-101 certified tellurium resource
A mineralized zone that remains open to the east, west and down-dip
A robust Preliminary Economic Assessment (PEA) with a 1.6-year payback on just 20% of the current target
A small, open-pit mine plan that lowers the capital requirements (CDN$28.3 million), minimizes permitting requirements and greatly facilitates our engagement with regional First Nations.
While tellurium is the feature mineral, the property’s gold and silver make it especially attractive to a potential tellurium buyer. I have never seen anything like it, and rest assured I am committed to making this venture a success.
A Remarkable Turnaround for Deer Horn
We have completed a remarkable turnaround for Deer Horn over the last 18 months while enduring very difficult markets. We believe 2019 will mark a watershed year for the company. Here’s why:
Deer Horn has a clean and tight share structure
We have cash for near-term needs (with plans for further funding)
Our planned work includes Phase 1 prep for a preliminary feasibility study
A pending agreement to acquire the high-grade Colorado Klondike tellurium property in Colorado. (We expect to conclude the agreement in the next 30 days.)
Resilience in Our Share Price
Over the past three months, our share price has shown resilience while most juniors have been battered. I believe this strength is due largely to the factors just mentioned, but also because of our exceptional share structure. In addition, Deer Horn is not part of the crowded space in the lithium and cobalt sectors. Our tellurium focus gives us a unique identity amongst critical metals firms.
Tellurium and Deer Horn in the News
We have also enjoyed increasing exposure in the news around tellurium. To the best of our knowledge, we are the only junior company in North America focused on tellurium exploration. As we continue to report on tellurium’s expanding uses for technology and to solve crucial world problems, our visibility is expanding.
Funding and Our Next Exploration Program
We are considering various funding options to proceed with our next round of exploration at the Deer Horn property. This would allow us to get back on the property in the spring and proceed with Phase 1 recommendations from our recent PEA, which include additional surface mapping and drilling.
Listing in the United States
To make it easier for U.S. investors to participate in Deer Horn, we are investigating options for moving our shares to a larger, more visible U.S. exchange. We should have further news about this later in 2019.
Management’s Ongoing Commitment
I’d like to emphasize that management is solidly committed to realizing the ambitious vision for Deer Horn. Management and insiders hold a significant portion of the outstanding share capital, and I continue to add to my position. In other words, I “walk the talk” when it comes to our commitment to make Deer Horn a success.
Thanks for your ongoing support, and I look forward to delivering more good news in 2019.
As always, please contact me directly with any questions or concerns. I welcome the feedback and conversations.
President and CEO
QIS CAPITAL COMMENTS - DEER HORN CAPITAL CONFERENCE CALL:
We are very pleased to be hosting two conference calls with Tyrone Docherty, President of Deer Horn Capital on Tuesday, January 22nd at 4:00pm EST (1:00 PST) and 9:00pm EST (6:00pm PST). We are limited as to how many can participate so please RSVP by emailing firstname.lastname@example.org or by calling 250-377-1182. Details of the calls are below:
Topic: QIS Conference Call - Deer Horn Capital Meeting #1
Time: Jan 22, 2019 1:00 PM Pacific Time (US and Canada)
Join Zoom Meeting
One tap mobile
Phone: 1 647 558 0588 Canada
Phone: 1 646 558 8656 US (New York)
Topic: QIS Conference Call - Deer Horn Capital Meeting #2
Time: Jan 22, 2019 6:00 PM Pacific Time (US and Canada)
Join Zoom Meeting
One tap mobile
Phone: 1 647 558 0588 Canada
Phone: 1 646 558 8656 US (New York)
International Frontier Resources Corporation (IFR:TSX-V)
Current Price: $0.10 (coverage commenced Oct 21/18 - $0.13)
On December 19, 2018, International Frontier management announced the following:
IFR JV REACHES TOTAL DEPTH AT TEC-11 AND PROVIDES TECOLUTLA OPERATIONAL UPDATE
Tonalli Energia, International Frontier Resources Corp.'s joint venture (JV) with Mexican petrochemical leader Grupo IDESA, has reached total depth at its first conventional horizontal well (TEC-11) on its onshore Tecolutla block.
The TEC-11 field development horizontal well has been drilled to a measured depth of 3,283 metres. The well was landed horizontally in the Cretaceous-aged El Abra formation limestone. A total of approximately 670 m of measured length of Cretaceous limestone was drilled before the total depth was reached. Oil shows were encountered during drilling.
A 4.5-inch production liner has been set and cemented to 2,865 m MD. Based on logging while drilling (LWD) gamma ray and sonic log tools and drill cuttings descriptions, the cased portion of the TEC-11 well Is interpreted to be in an interval similar to what was produced in the offset TEC-2 well.
Tonalli is currently planning a perforation, stimulation and flow-testing program for TEC-11. This program is expected to commence in the new year following which Tonalli will provide a comprehensive update on the results of the production test.
Tonalli has now received its first payment from PEMEX for oil shipped from its Tecolutla field. Tonalli's TEC-10 producing well averaged 156 barrels of oil per day in October and November at an approximate average crude sales price of $64.73 (U.S.) per barrel. Initial operating costs averaged $17.39 (U.S.) per barrel with an expectation that these costs will continue to be reduced as production moves from rented equipment to permanent facilities, improved water handling and operational efficiencies. Operating netbacks for the two months averaged $20.12 (U.S.) per barrel.
The Tecolutla field is located within the Tampico-Misantla basin, which has multiple reservoirs with diverse play types and access to existing infrastructure, market, service sector providers and an established supply chain. In 2017, IHS Markit identified the Tampico-Misantla basin as a potential superbasin.
Through its JV with Grupo Idesa, International Frontier was one of the first foreign companies to participate in Mexico's historic reform of the oil and gas sector. The Tecolutla block was awarded to Tonalli as part of the first round and third call of Mexico's oil and natural gas mature fields bid round (round 1.3).
QIS CAPITAL: We are expecting results of the TEC-11 horizontal well to be announced shortly. This is the first horizontal well drilled into this field and if successful could lead to a number of follow up wells which would have a significant impact on future production and cash flow. The horizontal intercept of this well is expected to yield up to 5-6 times production from vertical wells in the area.
The corporate information provided in this report is for informational purposes only. While every effort has been taken to provide accurate information, the completeness or accuracy of such information is not guaranteed. Certain statements in this report may constitute “forward looking” statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. The company profiled assumes no liability for the information presented. The information contained in this report should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. 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. Trading accounts, including personal, family and corporate accounts, under the control of QIS Capital management currently hold 345,500 shares and 140,000 warrants of Deer Horn Capital Inc. and 106,500 shares of International Frontier Resources Corporation. QIS Capital is engaged in an advertising agreement with Deer Horn Capital Inc. and may trade in Deer Horn's or International Frontier's common shares. No stock exchange has approved or disapproved of the information contained herein. Copyright ©2019, QIS Capital Corporation.