QIS Update #10 - 2017 - Corporate updates from Fairmont Resources, Newlox Gold Ventures and Opawica Explorations, Q2 results from NTG Clarity Networks - August 17th 2017
Included in this update:
- - Fairmont Resources provides updates on several projects
- - Newlox Gold Ventures eliminates debt
- - NTG Clarity releases Q2 financial results
- - Opawica Explorations announces drill mobilization, proposed financing
Fairmont Resources Inc. (FMR:TSX-V)
Current Price: $0.025 (coverage commenced Feb. 18/16 - $0.025)
Fairmont Resources Inc. has announced that no superior offers have been received for the Rome Lithium Property, and as a result the company has agreed to move forward with the previously announced transaction (see press release dated June 29, 2017) with Jourdan Resources Inc. (JOR.H:TSX-V). Upon TSX approval, Fairmont will receive $25,000 cash ($25,000 was received as part of a Right of First Refusal associated with signing the Letter of Intent), 1,500,000 shares of Jourdan, and a 2% NSR on the Rome property.
Fairmont has received notice that its appeal of the Spanish Court's termination of Fairmont's offer to acquire certain assets of Granitos de Badajoz (Grabasa) has been denied. On July 7, 2017, the Spanish Court declined Fairmont's appeal and upheld the decision to terminate Fairmont's bid for the Grabasa assets. Fairmont is currently assessing its options. Fairmont is still free to bid for the asset in an open competition, and continues to work with potential funding partners.
Fairmont has also made a decision not to appeal the Spanish Court's Decision with respect to Eureka Trading's claim for a success fee relating to the failed attempt to purchase the Grabasa assets. The company has determined that launching a proper appeal in Spain, which could continue for years, would cost hundreds of thousands of dollars, and that the company's resources are best directed elsewhere. The company is working on settlement options with respect to this issue.
Other Canadian Projects
The past producing Lac Brule Quartz Mine that Fairmont Resources completely surrounds was recently sold by the previous owner and dewatering of the open pit has commenced. It is unclear at this time if the new owner is looking to produce quartz or aggregate. Additional information will be provided on the Company's website as it becomes available.
The sampling for PCC from the Baie Comeau Quartzite property has been collected and arrangements to ship the sample to Germany are underway.
Several interested parties have approached Fairmont with respect to the acquisition of both the Forestville and Baie Comeau Quartzite properties, but no decision has been made with respect to the offers. Fairmont would consider JV partners to help accelerate the development of these projects, and interested parties are encouraged to contact the Company.
With respect to the Buttercup property, which is under binding letter agreement with Prophecy Development Corp. (announced on July 21, 2017), developments towards extracting aggregate are moving forward and Fairmont and its consultants in Quebec are assisting Prophecy in contacting local drilling, blasting, crushing and hauling contractors who had previously been working with Fairmont to develop the project. Fairmont is very encouraged by the dedication that Prophecy's management team is giving to the project, and the Company expects aggregate extraction equipment to be on site in August 2017. The closing of the transaction is subject to Prophecy being satisfied with the results of its due diligence that may include bulk sampling.
QIS Capital: Fairmont Resources is actively progressing its properties through joint venture, bulk sampling, and further development. We are expecting a number of further press releases in this regard in the near future. The company has had a very challenging year, as have most junior resource companies, obtaining further financing and is thus looking at alternative means to fund its projects and add shareholder value.
Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.04 (coverage commenced Mar. 31/14 - $0.05)
Newlox Gold Ventures Corp. has announced the closing of its previously announced conversion of $488,652.88 in Debentures and $52,272.63 of accounts payable to equity as part of its previously announced Private Placing and Royalty agreements.
Newlox has received unanimous agreement from its debenture holders to convert C$488,652.88 in debentures to common shares of the company on the basis of C$0.05 per share. Newlox will issue share purchase warrants equal to 50% of the common shares issued. Each warrant will be non-transferrable and will entitle the holder to purchase an additional Newlox common share for C$0.15 for a period of three years.
Furthermore, the company has settled C$52,272.63 due to QIS Capital Corp for services rendered through the issuance of equity on the basis of C$0.05 per common share. No warrants will be issued in this case and QIS Capital will continue to provide company updates from time to time for a period of one year from the settlement.
Ryan Jackson, President of Newlox states: "The company is now free of debt and, having recently closed on US$1 Million of new working capital, is poised to aggressively deploy its business model."
QIS Capital: We spoke with management earlier this week to get an update on where the company is spending the $1 million it received as part of the latest placement. Newlox has been improving and modifying its concentrate plant in Costa Rica and has been stockpiling tailings to recommence concentration and beneficiation operations which we expect to happen over the next few weeks. Despite appearing to be down and out, Newlox is back up and the next 3-6 months should be a very exciting time for the company and its shareholders.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.05 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has reported second quarter 2017 revenues of $4,148,957, as compared to a record $5,077,129 during the same quarter in 2016 (all amounts in Canadian dollars). For the first half of 2017, revenues were $7,156,886 as compared to $7,510,462, a 5% decline. This reduction in revenues is due mainly to the slow start to the current year. Q2 2017 revenue was up 38% from Q1 2017.
The corporation’s operating expenses for the three and six months ended June 30, 2017 were $1,087,171 and $2,415,095 compared to $3,011,329 and $4,996,564 for the same periods last year, a significant reduction year to date over last year. NTG Clarity has aggressively reduced staff, salary, selling and travel to bring expenses more in line with revenue.
During the second quarter of 2017, NTG Clarity reported positive income from operations of $199,081 compared to negative income from operations of ($541,141) during the same quarter in 2016. Q2 2017 cash flow provided by operations was $132,910 compared to ($701,271) during the same period last year.
For Q2 2017, NTG Clarity recorded a net loss of ($85,539) compared to a net loss of ($1,009,297) for the same period in 2016. For the six months ended June 30, 2017, the corporation recorded a net loss of ($838,118) compared to a net loss of ($2,995,754) in 2016. This is a substantial improvement as management continues to work to reduce selling and G&A costs, and to optimize cost of sales for the company's current revenue. Though a significant improvement over the same period in 2016, factors contributing to the net loss continue to include end of service (severance) salary costs due to reductions of selling and G&A staff as well as rental expense obligations for unprofitable offices/accommodations which have been closed.
Gross margin for Q2 2017 was $1,286,252 or 31%, compared to $2,470,188 or 49% for the same period in 2016. For the six months ended June 30, 2017 gross margin was $1,870,322 or 26%, compared to $3,166,189 or 42% for the same period in 2016
In the Gulf region, NTG's main market, lower oil prices continue to affect customers’ projects, though revenue numbers are now recovering. Throughout the first two quarters of 2017, the company focused on reducing costs, which is reflected in results this quarter. Management is continuing with cost reductions to bring the corporation back to profitability. NTG is also focusing on collections and increasing sales to relieve cash flow challenges.
Management is pleased with another quarter of recovery and growth. It has been a long process but this is the third consecutive quarter of significant recovery in revenues and earnings and is the best net income the company has reported since the third quarter of 2015. Management is committed to continuing this recovery and bringing NTG Clarity back to profitability in 2017.
In an unrelated matter, NTG would like to announce the election of Mr. Mohammed Saleem Siddiqi to NTG Clarity's Board of Directors. As an independent board member, Saleem brings over 40 years experience in finance and accounting. He is the president and founder of Siddiqi & Company Inc., Registered Professional Accountants and Certified Management Accountants. Past experience includes work at Richter, Usher and Wineberg, Charted Accounts and Director of Finance for the Dictograph Corporation, an innovative electronic manufacturing company, overseeing operations in Canada, the United States and China, before starting Siddiqi & Company Inc., in 1984.
“Saleem is a skilled professional, bringing substantial knowledge and expertise to our organization. The NTG team is delighted to welcome Saleem aboard and plans to make the most of his financial, accounting and process expertise” said Ashraf Zaghloul, NTG’s Chairman and CEO.
100,000 share options will be issued for Mr. M. Saleem Siddiqi, as member of the Board of Directors for the company. Each option will be exercisable at a price of $0.10 per share and will vest six months from date of issuance.
QIS Capital: It is very exciting to see NTG Clarity generating positive EBITDA and cash flow once again, and very near to once again being profitable. We are awaiting a response from the company's banking partner to see what impact this will have on the required debt repayment in September. We are expecting to see continued cost reductions during the third quarter of 2017. NTG Clarity currently has a market capitalization of just $2.1 million
Opawica Explorations Inc. (OPW:TSX-V)
Current Price: $0.07 (coverage commenced May 11/17 - $0.045)
Here is a recent Agoracom interview with Paul Antoniazzi of Opawica Explorations:
Opawica Explorations Inc. has announced that it has commenced mobilization of an initial Phase I drill program of up to four holes at its 100% owned Bazooka gold property located near Rouyn-Noranda, Quebec.
The drill program will consist of one deep hole of approximately 1,000 metres to test for gold mineralization at depth associated with the Cadillac Larder Lake Break and related stratigraphy. The hole will also serve as a platform to conduct down hole geophysics.
Three holes are planned to be drilled to fill in certain areas between past drilling at depths of up to 200 metres. Following this drilling, the company will be in the position to proceed with a further Phase II drilling program that will include a resource calculation on the eastern 300 metre portion of the Bazooka property.
The initial 1,000 metre hole will be drilled first and is expected to commence drilling in the next two weeks and should be completed within 30 days.
About The Bazooka Property
The company's Bazooka property adjoins the Yorbeau Resources Inc. - Kinross Gold Corporation optioned Rouyn property where up to 22,000 metres of drilling has been completed by Kinross as operator along certain sections of the 9 kilometre strike length of the Rouyn property. Some of this drilling has been completed within a few hundred metres of Opawica's eastern boundary near the Augmitto shaft on the Rouyn property.
The Bazooka property hosts significant gold mineralization starting at the eastern border of the Yorbeau-Kinross Rouyn ground to at least 800 metres to the west on Bazooka. The Bazooka property is open on strike for seven kilometres to the west and is open at depth. Of the seven kilometres of strike length on the Bazooka property, only 800 metres have been tested within 300 metres of surface.
Past holes drilled by previous operators and current holes drilled by Opawica in 2017 have returned holes, such as and ranging between, 54.8 metres at 0.65 g/t Au (Opawica-2017), 48 metres at 1.38 g/t Au (uncut -2017 restated from Lake Shore Gold ("LSG", 2003); 17 metres at 7.86 g/t Au as well as 3.20 metres @ 12.49 g/t Au (RT Minerals Corp 2011); and 94 g/t Au over 1.25 metres (LSG 2004) as well as other gold bearing intercepts. All of the above intercepts are estimated at 80 to 85% true widths and all of the above gold mineralization is within 300 metres of surface.
Mr. Yvan Bussieres, P.Eng., is the Qualified Person who has prepared or supervised the preparation of the information that forms the basis for the scientific and technical disclosure in this news release.
The company proposes to undertake a private placement to raise gross proceeds of up to $1,200,000 (the "Offering"). The Company proposes to raise up to $400,000 through the sale of up to 8,000,000 non flow-through units priced at $0.05 (the "NFT Units") and up to $800,000 through the sale of up to 10,000,000 flow-through units priced at $0.08 (the "FT Units"). Each NFT Unit consists of one common share and one half of a share purchase warrant, with each whole warrant (the "Warrant") exercisable into one further common share at a price of $0.10 for a term of one year. Each FT Unit consists of one flow-through common share and one half of a share purchase warrant, with each whole Warrant exercisable into one further common share at a price of $0.10 for a term of one year.
The warrants will contain an accelerated expiry clause such that, in circumstances where the closing price of the shares of the Company on the TSX Venture Exchange is $0.15 or greater for a 20 day consecutive trading period, they will expire if not exercised 14 days following the 20 day trading period.
The offering will be conducted under available exemptions from the prospectus requirements of applicable securities legislation and participation in the Offering will be available to existing shareholders in qualifying jurisdictions in Canada in accordance with the provisions of BC Instrument 45-354 (the "Existing Shareholder Exemption") and similar provisions in other jurisdictions' securities legislation and will be available to persons in qualifying jurisdictions in Canada who have obtained advice as to the suitability of the investment from a person registered as an investment dealer in accordance with the provisions of BC Instrument 45-536 and similar provisions in other jurisdictions' securities legislation.
The company has set August 11, 2017 as the record date for the purpose of determining shareholders entitled to participate in the Offering in reliance on the Existing Shareholder Exemption. Qualifying shareholders who wish to participate in the Offering should contact the Company as detailed below. If the Offering is oversubscribed, units will be allocated pro rata amongst all subscribers.
The proceeds from the sale of the flow-through portion of the Offering will be used for exploration activity on the Company's 100% owned Bazooka gold property. The proceeds from the sale of the non flow-through portion of the Offering will be used for general working capital.
A finder's and/or administrative fee of up to 10% may be paid to registered representatives in connection with the Offering. The fee will be comprised of 50% cash and 50% common shares at $0.05 per share.
The offering is subject to the acceptance of the TSX Venture Exchange.
QIS Capital: Newsflow is always important for junior resource companies and Opawica is entering a work program that should generate results over the next few months. We are seeing increased interest in the company's shares as institutions have become involved in the proposed financing and are helping to promote the company's prospects. We expect to see improved investor outreach as the drilling programs progress. Anyone wanting more information about the private placement or about the company in general should contact us at 250-377-1182.