QIS Update #13- 2018 - Corporate updates from Deer Horn Capital, Newlox Gold and NTG Clarity - August 16th 2018
Included in this update:
- NTG Clarity Networks does not expect any adverse impact from Saudia Arabian disputes (NCI:TSX-V)
- Deer Horn Capital completes two tranches of financing at $0.50 and announces increase in size of private placement (DHC:CSE)
- Newlox Gold Continues to Pour Gold in Central America and introduces a new technology (LUX:CSE)
We are starting to see a number of financial and operating results reported for several small-cap Canadian companies. This will continue throughout August with many of the companies we follow poised to report numbers in the next few weeks. Results so far have been mixed. We have seen some great numbers but feel that the majority of these companies are already trading at greatly expanded earnings multiples. We have seen many companies continuing to struggle financially along with languishing share prices as we have been patient with many stories for the last several years. A few companies appear to have found support levels and while financial results are showing little or no growth, valuations are such that these companies may offer good opportunities heading into 2019. We look forward to reporting on some of these opportunities in the coming months.
With regards to NTG Clarity (NCI:TSX-V), we have had a number of recent comments and questions surrounding their Saudi Arabian operations. We have spoken with management in this respect and have been informed that business is not expected to be affected at this time. The feeling in Saudi Arabia is that the issue will cool down and fade away but there are still a number of media reports which are causing uncertainty for Canadian companies doing business in the region. While we concur that the longer term impact of the media "battle" will be negligible, we will continue to report on anything of merit with regards to NTG Clarity. The stock recently traded down to $0.035 representing a market capitalization of just $1.7 million. The company had revenues of $4 million in the first quarter of this year with net income of $160K. Second quarter results are expected to be announced by the end of August.
Please feel free to email us anytime at firstname.lastname@example.org or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Deer Horn Capital Inc. (DHC:CSE)
Current Price: $0.38 (coverage commenced April 10/18 - $0.17)
DEER HORN ANNOUNCES 1ST TRANCHE CLOSING OF PRIVATE PLACEMENT
Deer Horn Capital Inc. has completed a first-tranche closing of its previously announced private placement and has issued a total of 200,000 units for aggregate gross proceeds of $100,000. Each unit comprises one common share and one-half common share purchase warrant. Each whole warrant is exercisable into one common share at a price of 60 cents share for a period of two years. The company paid a finder's fee of $3,000 in connection with this first-tranche closing.
DEER HORN ANNOUNCES INCREASE OF PRIVATE PLACEMENT
Deer Horn Capital Inc. is increasing its previously announced non-brokered private placement (refer to news release of June 27, 2018) by $100,000 for a total raise of $500,000. The company has raised $100,000 in its first tranche closing of this private placement (refer to news release of Aug. 3, 2018). The company now intends to raise up to an additional $400,000 by issuance of up to 800,000 units at a price of 50 cents per unit. Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will be exercisable into one common share for a period of two years at a price of 60 cents per share.
In connection with this private placement, the company may pay finders' fees consisting of cash, shares and/or warrants to eligible finders as permitted under applicable securities laws and Canadian Securities Exchange policies. The proceeds of the private placement will be used for general corporate purposes.
DEER HORN ANNOUNCES 2ND TRANCHE CLOSING OF PRIVATE PLACEMENT
Deer Horn Capital Inc. has completed a second tranche closing of its previously announced private placement and has issued a further 200,000 units for gross proceeds of $100,000. Each unit comprises one common share and one-half common share purchase warrant. Each whole warrant is exercisable into one common at a price of 60 cents per share for a period of two years. No finder's fee was paid with respect to this second tranche closing. The total amount raised to date under this private placement is $200,000.
QIS CAPITAL: Despite the recent decline in share value, Deer Horn management has been successful in closing two tranches of its recently announced financing at a significant premium to the current share price. The company is working on a number of fronts to add shareholder value and while we expected some pullback with the summer doldrums and the expiry of the hold period from the last round of financing, we expect to see a number of developments during the remainder of 2018 and into 2019.
Those who may be interested in the private placement are encouraged to call us at 250-377-1182 or there is ample opportunity in the market at a significant discount to the financing price (but without the warrant).
Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.035 (coverage commenced Mar. 31/14 - $0.05)
NEWLOX POURING MORE DORE AT UPGRADED PLANT, CENTRAL AMERICA
Newlox Gold Ventures Corp. is continuing to pour gold dore at its remediation and precious metals recovery facility in Central America. Following the company's inaugural pour of gold dore on April 23, 2018, efficiencies have been steadily improving month by month.
Gold dore pours are now a regular occurrence. Precious metals sales are supporting continued testing of innovative environmental reclamation and precious metals recovery technology. Performance at the processing plant is advancing as a result of the continued application of optimization recommendations made by the company's experienced metallurgist and process engineers.
During July, handling time in the beneficiation stage was reduced by 75 per cent since the company installed a new mechanical agitation system, improved the aeration system, optimized the solid/liquid ratio controls, enhanced reagent dosing and fabricated an automatic material handling system. The stripping and electrowinning systems are being improved to further enhance capacity and efficiency. To date, additional anodes and cathodes have been added, the fluid flow pattern has been optimized and the stripping circuit has been pressurized (resulting in improved recovery and reduced operating cost). New tanks and electronics are currently being installed to enhance both capacity and overall recovery.
Ryan Jackson, president of Newlox Gold Ventures, commented: "Our operations team is maintaining regular gold dore pours. Encouragingly, we see a month-by-month increase in yields. Newlox is on course to achieve its goal of a robust, socially and environmentally positive enterprise, generating value for shareholders and local stakeholders alike. Once we have achieved full-scale commercial operations, the company will be ready to expand its socially and environmentally responsible resource business at locations already identified in the immediate area."
NEWLOX IMPLEMENTS ATOMIC ABSORPTION SPECTROSCOPY TECHNOLOGY
Newlox Gold Ventures Corp. has implemented atomic absorption spectroscopy (AAS) technology at the company's cutting-edge field laboratory.
AAS is a spectro-analytical procedure that measures the concentration of elements in a solution using the wavelengths of light specifically absorbed by each element when vaporized in a high-temperature environment. The technique is so sensitive that it can measure the concentration of elements down to the parts per billion of a gram in a sample.
The addition of AAS capability at the company's in-house analytical laboratory allows for real-time analysis of samples from the processing plant and supports the company's engineering team as they continue to optimize operations. AAS can simultaneously analyze for multiple elements of interest, a capability which will be especially valuable for the company's environmental reclamation and precious metals recovery project.
The engineering team at Newlox identified AAS as a crucial first step for the company's lab because it is not available as a service at local third-party laboratories. At present, the company will continue to rely on local third-party laboratories for gold confirmation assays using the fire assay technique. This capability will also be brought in house in the near future.
Ryan Jackson, president of Newlox Gold, comments: "The addition of AAS equipment at the processing plant is allowing for rapid cycles of testing and optimization. Liquid samples can now be taken from various stages of the processing plant and analyzed rapidly at our lab."
QIS CAPITAL: We are encouraged by the continued improvement in production yet can't measure the financial impact as no definitive production numbers or efficiencies have been announced. We are expecting to see Q1 financial and operating results from Newlox by the end of August but these numbers will include only a minimal amount of revenue from the first few pours while the company was basically testing the system. Q2 results to be released by the end of November should start to show more meaningful numbers with weekly pours.