QIS Update #16 2014 - May 27th 2014
Included in this update:
- Blackbird Energy appoints new director
- Dalmac Energy announces resignation of CFO to pursue private sector opportunity
- Manado Gold closes financing, provides details on 2014 exploration program
- QUATTRO Exploration and Production reports Q1 2014 financial and operating results
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Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.205 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy Inc. has announced the appointment of William C. Macdonald to its board of directors.
Mr. Macdonald has over thirty years of petroleum land management experience in Western Canada. He is currently the President of Bilmac Resources, an oil and gas consulting firm that provides land management support to various clients, and specializes in the capitalization of private oil and gas start-up companies. Most recently Mr. Macdonald served on the board of Alexander Energy Ltd. and chaired the special committee that sourced and finalized a recapitalization arrangement with the team of Spartan Energy, delivering to Alexander shareholders an approximate six times lift. In 1997, Mr. Macdonald co-founded Avalanche Energy Limited, a private oil and gas company, which was sold in late 2000 for approximately 10 times its initial share price. Mr. Macdonald was also previously Land Manager at Hardy Oil and Gas Limited, a private subsidiary of Hardy PLC (1990-95) and a senior negotiator at Amerada Hess Corporation. He became a member of the Canadian Association of Petroleum Landmen in 1980, attained his P. Land designation in April 1989, and remains an active member of the Association.
Garth Braun, President and CEO stated: Blackbird is at a critical stage with respect to the further development of its properties, and in particular, the Elmworth Montney Property. We are very pleased to make this very significant addition to the Blackbird team and look forward to Mr. Macdonald assisting Blackbird in achieving its development objectives and building shareholder value through the de-risking of the Montney resource.
In connection with the appointment, Blackbird has granted 750,000 incentive stock options to Mr. Macdonald. Such options are exercisable at the price of $0.27 for a period of five years until May 21, 2019.
Dalmac Energy Inc. (DAL:TSX-V)
Current Price: $0.40 (coverage commenced Nov 15/11 - $0.37)
John Babic, President and CEO of Dalmac Energy Inc. has announced that Mr. John Beasley, Chief Financial Officer, will step down as CFO of Dalmac after 3 years with the company, effective May 30, 2014, to pursue an opportunity in the private sector. The company has initiated an executive search for his successor and in the interim the duties of CFO will be carried out by John Babic.
Dalmac is committed to strengthening its accounting and administrative functions and has recently hired Ms. Caroline Inacio as the new corporate controller who will help to ensure a smooth transition. Ms. Inacio has over 18 years public company accounting experience of which the majority was in the capacity of corporate controller. We are very pleased to have Caroline join our team, stated John Babic, CEO.
John Beasley joined Dalmac in 2009 as company controller and was CFO since 2010. The board is very appreciative of John's contributions to the company and wishes him all the best in his new endeavors.
QIS Capital: We have spoken at length with management about this resignation which has nothing to do with the company or its operations. We are confident that management can make a smooth transition and continue with its cost control and growth measures.
Manado Gold Corp. (MDO:TSX-V)
Current Price: $0.05 (coverage commenced Dec. 6/13 - $0.065)
Manado Gold Corp. has announced that it has closed the second and final tranche of its previously announced private placement financing. Manado is also pleased to announce that that it plans to carry out a two phase exploration program in 2014 on its Tackla-Rainbow Property to follow up on follow up on its successful 2013 drill program where hole number TR13-88 finished in a mineralised zone.
Private Placement Closing
Manado closed the second and final tranche of its previously announced private placement (see news release dated March 27, 2014) by issuing 1,060,000 units at a price of $0.05 per unit for gross proceeds of $53,000. Each unit consists of one common share of Manado and one share purchase warrant, with each Warrant entitling the holder to acquire one additional Share at a price of $0.06 per Share for a period of three years from the date of issuance. Manado has now issued a total of 2,560,000 units at a price of $0.05 per unit for gross proceeds of $128,000 under its private placement.
The securities issued under the first and second tranche of the private placement will be subject to hold periods expiring on August 23, 2014 and September 24, 2014 respectively, pursuant to applicable Canadian securities laws and the rules of the TSX Venture Exchange.
2014 Exploration Program
Manado plans to carry out a two phase exploration program during the 2014 field season to follow up on its 2013 drill program where the results of drill hole number TR13-88 indicated that there may be a porphyry-style copper and gold-bearing mineralized zone associated with pervasive siliceous and potassic flooding. The TR13-88 drill hole intersected 24.52 metres (66.0 to 90.52 m, end of hole) of mineralization grading 2.011 gpt gold, 2.0 gpt silver and 0.18% copper, including a 6-metre section (66.0 to 74.0 m) with an average grade of 4.225 gpt gold, 4.0 gpt silver and 0.35% copper (Note: these intercepts are drilling lengths, not true widths).
Manado expects to commence the first phase of the 2014 exploration program in late June when the local roads are expected to be fully accessible. This phase will concentrate on re-logging and sampling the unsplit diamond drill core that remains on site originating from the pre-1992 Imperial Metals and Eastfield Resources drilling programs. This work will focus on identifying porphyry-style copper-gold mineralization that was not sampled during the previous exploration drilling.
The second phase, which is subject to obtaining sufficient financing, will be a diamond drill program to confirm and test for extensions and depth of the zone discovered in 2013.
Manado also plans to carry out prospecting, geological mapping, and rock and basal till sampling within the known South and Red Zones. The South Zone has several large, untested copper-gold soil geochemical anomalies that may be reflecting a buried porphyry-style copper-gold mineralizing system. The Red Zone is situated 1.2 kilometres to the northwest and has known copper-gold mineralization typical of a calc-alkaline porphyry copper-gold system.
Doug Blanchflower, P. Geo, is a Qualified Person as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects and is responsible for the work program on the Takla-Rainbow Property. Mr. Blanchflower has reviewed and approved the technical information in this news release.
About the Takla-Rainbow Property
The Takla-Rainbow Property is located in northcentral British Columbia, approximately 152 km north-northwest of Fort St. James or 156 km northeast of Smithers. The property consists of six mineral tenures that collectively cover 4,545.34 hectares (11,231.38 acres) along the Twin Creek drainage. All of the claims are owned 100% by CJL Enterprises Ltd. of Smithers, B.C., subject to the terms of an option to purchase agreement with Manado.
QIS Capital: With a portion of the proposed capital being raised, Manado can now move forward with its exploration program around the exciting hole drilled in late 2013. The company will require additional financing to move into the drilling phase of its program.
QUATTRO Exploration and Production Ltd. (QXP:TSX-V)
Current Price: $0.71 (coverage commenced Mar. 24/14 - $0.32)
QUATTRO Exploration and Production Ltd. has announced the filing of its first quarter 2014 financial statements, reporting $0.09 per share earnings.
The company has reported the following results for the 3 months ended March 31, 2014:
- Revenues: $4,1666,100
- Net income from operations, $18.75/boe Net Back: $2,111,200
- Net earnings from operations, $0.03/share: $1,046,800
- Income tax recovery, $0.06/share: $2,122,700
- Net and comprehensive income, $0.09 per share: $3,169,500
- Cash and equivalents: $5,726,600
- Working capital: $3,183,900
- Net debt (excluding decommissioning liabilities & deferred taxes): $4,105,600
At March 31st the company's exit production was 1,513 boe/d not including a further 100 boe/d with an effective date of February 1st, 2014 as a result of the addition of the Donalda Acquisition announced May 14th closing on May 30th. In addition, on-going engineering, remediation, work overs and consolidation activities are anticipated to add a further 500 boe/d in the coming months, providing the company the path to exceed its near term goal of 2,000 boe/d in July.
During the first 3 months of 2014, Quattro's cash-flow from operations was $688,118 and the company's EBITDA (earnings before interest, taxes, depreciation and amortization) was $1,965,260. Although a non IFRS accounting term, the company believes EBITDA provides further guidance of funds flowing from operations for Quattro and provides investors an opportunity to understand the company's capacity to fund its operations, while continuing to grow production.
The Board of Directors are very pleased with our team's continued focus on near term remediation, work overs and operational efficiencies while being driven by our organic business plan for material growth through a combination of accretive acquisitions and solid financial principles. said Leonard Van Betuw, President and CEO. In support of their efforts, the Management and Directors see it as their duty to also continue to pursue the proper utilization of our strengthening balance sheet. We see it as our responsibility as management to add additional flexibility to further accelerate our business plan and the rate of growth that Quattro and its team are capable of attaining, while remaining measured and focused on the continued improvement of the value of the shareholders' investment in Quattro.
The company, in addition to its ongoing activities, anticipates the announcement in the coming weeks of an approved initial drilling budget of up to 10 development wells 8 (net) focused on oil as well as 2 exploratory wells 1.2 (net), 0.5 (net) oil and 0.7 (net) gas wells commencing in the second half of 2014 and continuing into the 1st quarter of 2015, having an estimated budget of $8,000,000 (net).
The company’s complete financial statements and MD&A are available on the SEDAR website at www.sedar.com.
|LATEST FINANCIAL RESULTS|
|3 Months Ended Mar. 31|
|Gain on Acquisition of Properties||3,177||522,000|
(as at March 31, 2014)
|Current Assets||$ 8,003,200|
QIS Capital: It is important to note that Quattro made an error in its cash flow as stated in today’s press release. According to the financial statements, cash flow from operations for Q1 was $1,814,509 or $0.054 per share. This puts the company on track to meet its previous guidance of $10 million in cash flow for 2014. We also noted from the MD&A that average production during Q1 was 1,298 boe/d with an exit rate of 1,513 boe/d (not including the Donalda acquisition which will add another 100 boe/d once completed). Based on Q1 cash flow, the exit production rate should put the company on track for cash flow of over $2.1 million in Q2. Furthermore, production is expected to reach 2,000 boe/d in July 2014 so Q3 and Q4 cash flow should reach $2.8 million per quarter for an annual total of $9.5-$10million ($0.28-$0.30 per share). This would put Quattro at a price to cash flow multiple of around 2.4X at the current price. Of course these projections rely upon the company meeting its production targets and pricing remaining stable.
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 627,369 shares, 428,570 warrants, and 350,000 options of Blackbird Energy Inc., 88,000 shares and 200,000 options of Dalmac Energy Inc., 286,000 shares of Manado Gold Corp. and 80,000 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 - 2014 QIS Capital Corporation.