QIS Update #14 - 2016 - Fairmont Resources provides several corporate updates and NTG Clarity announces financing - June 24th 2016
Included in this update:
- - Fairmont Resources completes a deposit for Grabasa Assets, updates on neighbouring mine to its Rome lithium property and grants options
- - NTG Clarity announces private placement of up to $1.5 million in convertible debentures
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Fairmont Resources Inc. (FMR:TSX-V)
Current Price: $0.19 (coverage commenced February 18/16 - $0.025)
Fairmont Resources Inc. has announced that a deposit of 150,000 Euros was sent by Fairmont and received by the court in Spain with respect to the Granitos de Badajoz S.A. (Grabasa) assets acquisition. This is in addition to the 60,000 Euros deposit made on behalf of Fairmont Resources by Eureka Consulting, previously announced in the Fairmont news release of March 21, 2016.
Discussions with potential lenders for the remainder of the acquisition are ongoing. Fairmont expects to receive a signed letter of intent for debt financing in the coming week.
As first reported by Aggregate Business Europe in the article titled, “Dynamic Start to 2016 for European Construction Equipment Sales”, it quotes the Committee for European Construction Equipment stating an “encouraging opening period of 2016 was driven by the robust recovery of the French market, the continuation of the recovery in Southern Europe and the stability of the Western European market as a whole” in construction equipment sales. Fairmont sees this as continued positive signs in European construction recovery as well as for future demand for construction and renovation material including granite.
In the Winter 2015-2016 Gilbane Construction Economics Market Conditions in Construction report for the US, it is reported that “2015 is a breakout year for nonresidential buildings construction spending, expected to finish at 17% growth. With expected growth of more than 13% in 2016, the three year period of 2014-2016 could reach historic growth.” Fairmont sees this as a positive sign for granite and marble demand in the US. The US market for dimensional stone, which includes granite and marble, was more than US$2.5 billion in 2014, with more than $2.0 billion being dominated by imported material that would be a target market for Grabasa.
Michael Dehn, President and CEO Of Fairmont Resources stated, “This is an exciting opportunity for Fairmont to acquire one of the premier granite producing assets in Europe. Fairmont management sees additional opportunities to expand sales into worldwide markets without the requirement of expensive upgrades or facility expansions. Once all of the necessary financing is in place, Fairmont plans to move rapidly into selling existing granite inventory and recommencing production for continuing sales.”
Fairmont Resources Inc. is encouraged by the Court Approval on June 21, 2016 of the Asset Purchase Agreement of RB Energy Inc. by Jilin Jien Nickel Industry Co. (Jilin).
RB Energy, who once claimed its Quebec mine would produce “the highest-quality lithium carbonate in the world”, was forced to halt operations in October 2014 after failing to complete a much needed financing. Subsequent attempts to raise financing proved to be very difficult due to market conditions at the time for Canadian resource companies. Specifically, Investment Quebec and/or KSV Advisory held discussions with 26 parties regarding the potential sale of RB Energy.
Jilin acquired the Quebec Lithium Mine for an undisclosed amount but it is estimated that approximately $150 – $200 million in additional capital will be required to take the Lithium project to its production stage.
Michael Dehn, President and CEO Of Fairmont Resources, stated the following regarding the significance of this deal for both the Lithium industry and Fairmont’s Rome Lithium Property “Fairmont is very encouraged by the acquisition of the past producing Quebec Lithium Mine and Mill by Jilin Jien Nickel, as it provides third party validation of Fairmont’s decision last month to option of the Rome Lithium Property, which borders the property acquired by Jilin Jien. Rome added shareholder value at the time of its option and we believe this acquisition of the bordering property will add further near and long term value.”
PROXIMITY OF RB ENERGY MINE TO FAIRMONT’S ROME LITHIUM PROPERTY
The Rome Lithium property is located approximately 60 km north of Val d’Or Quebec. The property is contiguous to the north and south of RB Energy’s Quebec Lithium Mine with a published measured and indicated resources (at a 0.60% Li2O cutoff) of 41,556,000 tonnes at 1.09% Li2O, and an inferred resource of (at a 0.60% Li20 cutoff) of 17,766,000 million tonnes at 1.10% Li2O (RB Energy Press Release of October 11, 2012).
The property is also contiguous to Jourdan Resources Vallee Lithium property that drilled more than 4000m of core in 2011 and intersected more 100 pegmatite and aplite dikes. Jourdan Resources intersected values of up to 1.187% Li2O over 5.50m (Jourdan Resources Press Release of October 24, 2012).
For additional information on the Rome Lithium Property, please see the press release dated May 26, 2016 on the Fairmont Resources website, or via the following link: www.fairmontresources.ca/uploads/270.pdf
A map and photos of the Rome Lithium Property can be found here: www.fairmontresources.ca/pdf/Rome%20Lithium%20Property.pdf
Detailed documents on the RB Energy transaction are available at:
http://goo.gl/RE8s31 : First Report of the Receiver dated June 13, 2016
http://goo.gl/2ljb7h : Approval Assignment and Vesting Order dated June 21, 2016
Fairmont Resources has also announced that its board of directors has granted a total of 1,815,000 stock options to its directors, officer and consultants. The options are exercisable at a price of $0.18 per share and expire on either June 17, 2021 (directors and officers) or June 17, 2018 (consultants) from the date of grant.
QIS Capital: The purchase of the RB Energy lithium mine is a significant deal for Fairmont due to the mill’s proximity to the Rome lithium property as well as the amount of the money that will be invested in the re-commencement of production. It is rumoured that the total cost to get the RB Energy mill operating again will be around $350 million including acquisition cost. With a market capitalization of just $5 million (which includes the quartz properties and the deposit and acquisition agreement for Grabasa, Fairmont becomes a very interesting area play next door to the RB Energy mill and property.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.135 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Networks Inc. has announced that it intends to complete a non-brokered private placement of subordinated, unsecured convertible debentures (the Debentures) in the aggregate principal amount of up to $1,500,000 (the Offering). The Debentures shall bear interest at a rate of twelve percent (12%) per annum, payable on December 31 and June 30 each year commencing December 31, 2016 and shall mature two (2) years following the date of issuance. The Debentures are redeemable by the corporation at any time after one year following the date of issuance.
The principal amount of the Debentures shall be convertible into common shares of the Corporation (the Common Shares) at any time prior to maturity at the option of the holder at a conversion price of $0.30 per Common Share (the Conversion Price), subject to the corporation having the right to force the conversion of the Debentures into Common Shares at the Conversion Price, if the volume weighted average trading price of the Common Shares for twenty (20) consecutive days ending five trading days exceeds $0.35.
Proceeds from the Offering will be used for working capital.
Completion of the Offering is subject to customary conditions including approval of the TSX Venture Exchange.
The Debentures and the Common Shares issuable on conversion thereof, have not and will not be registered under the U.S. Securities Act of 1933, as amended (the Act), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Act. This press release does not constitute an offer to sell or a solicitation of any offer to buy the Debentures in the United States.
QIS Capital: Those who are interested in participating in the convertible debenture should contact QIS Capital as soon as possible. We participated in NTG Clarity’s last convertible debenture in 2013 and everyone did very well as the company ended up converting the debenture within the year due to a share value increase. This convertible debenture is open to accredited investors.
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 712,000 shares and 350,000 warrants of Fairmont Resources Inc. and 1,119,000 shares and 100,000 options of NTG Clarity Networks Inc. 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.