QIS Update #24 2014 - August 15th 2014
Included in this update:
- Blackbird Energy announces first high impact well at Elmworth and planned disposition of Bigstone asset
- Manado Gold reports first phase of 2014 exploration program at Takla-Rainbow property is complete
- Newlox Gold Ventures announces profitable gold trading
- Virtutone Networks closes previously announced acquisition of customer base and revenues
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Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.28 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy is very pleased to announce its first horizontal well targeting the Upper Montney at the Company's Elmworth Project. Subject to license approval, the well is to be spud in Q4 2014 at location 10-26-70-07W6, and will be drilled to a depth of approximately 2,300 meters with a horizontal reach of approximately 2,700 meters. The Elmworth Project is 100% owned by Blackbird and has been geologically de-risked by the drilling of industry leaders nearby.
Blackbird has recently also added one new contiguous section of land to the Elmworth land package, bringing the Company's current land position to 32 sections (20,480 net acres) in the over pressured oil/field condensate window, with 28 of such sections being contiguous.
Blackbird also announced today that it has entered into a purchase and sale agreement for the sale of its 50% non-operated working interest at Bigstone for total cash consideration of $8.8 million, prior to customary closing adjustments. The Bigstone Asset consists of 3.5 net sections (2,240 net acres) of land.
The Transaction is expected to close on or about September 1, 2014, subject to the satisfaction of standard industry closing conditions and approval by the TSX Venture Exchange. The disposition of the Bigstone Asset will provide Blackbird with a non-dilutive source of funding and will allow the Company to focus on, and accelerate, the development of the Elmworth Project through the drilling of its first Upper Montney well.
Garth Braun, CEO of Blackbird stated "The sale of Blackbird's 50% working interest in Bigstone aligns with our strategy of creating a focused and well capitalized Montney exploration and development company. We will be focusing our team on the drilling of the first 100% working interest high impact Upper Montney well at our Elmworth Project."
Blackbird strategically acquired the Bigstone Asset over the past three years, first by way of a farm-in agreement for a 25% working interest and more recently through the acquisition of Pennant Energy Inc. which provided the Company with a 50% consolidated working interest in the liquids rich Montney project and the opportunity to monetize the asset as a strategic option in light of issues surrounding access to infrastructure. The proposed disposition of the Bigstone Asset demonstrates the ability of the Company's management team to identify an opportunity to increase Blackbird's financial flexibility and focus on development at the Elmworth Project.
QIS Capital: This is one of the most significant announcements Blackbird has had over the past few years. Recent well results by major competitors in the Elmworth area continue to bring focus to the quality of lands that Blackbird has assembled. Three of the most recent wells in the area were drilled by Encana, NuVista and Inception. The Elmworth area is well defined on lands surrounding Blackbird and the industry is currently very positive on the region. With the sale of the Bigstone assets and the associated cash payment, Blackbird is now poised and has the capital to start to prove up its Elmworth land holdings over the next few quarters.
Manado Gold Corp. (MDO:TSX-V)
Current Price: $0.05 (coverage commenced Dec. 6/13 - $0.065)
Manado Gold Corp. has announced that the first of the two-phase 2014 field work has been competed on its Takla-Rainbow property in northcentral British Columbia. This work was undertaken to follow up on its successful 2013 drill program where drill hole number TR13-88 finished in a mineralized zone. This 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).
The initial phase of the 2014 field work was completed during a 2-week period in late July. The field work included reconnaissance geological mapping and sampling within all five known zones of copper-gold mineralization, and logging and sampling of unsplit sections of drill core stored at the old campsite from the pre-1992 Imperial Metals and Eastfield Resources drilling programs. This work focused on identifying porphyry-style copper-gold mineralization not identified or sampled by the previous operators.
View Drill Section Image at: www.manadogold.com/images/section.jpg
View Project Video at: www.juniorresourcemedia.com/manado
A total of 226 rock and drill core samples have been submitted for gold assays and base metal analyses. The analytical results are expected within the next 2 to 3 weeks. The results of the geological mapping with the rock and drill core assay results will be reported after a thorough review is completed.
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.
QIS Capital: While the market is still very nonchalant for junior resource plays, Manado has gone out, raised money, completed an exploration program and is poised to announce further results in the coming weeks. Capital is still very tight for junior mining companies and Manado is working to complete a second offering at $0.05 per unit and $0.06 per flow-through unit. Anyone interested in participating in this round of financing should contact us as soon as possible.
Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.04 (coverage commenced March 31/14 - $0.05)
Newlox Gold Ventures has provided an update on its continuing trading program.
Newlox Gold reports that its Trading Program is progressing well, with profit margins within expectations and an increasing volume of trades.
From February 2014 to 1 August the Company has completed 150+ trades totalling in excess of 17 Kilos of gold at an average purity of 52% Au. Completed trades to date value C$348,355 and have an average gross margin of 11% per trade. Considering current growth rate and a trading float of $50,000, the trading program is on track to achieve an annualized gross margin of 153%.
By employing a rapid turnaround on purchases and high frequency of trades, Newlox has been able to generate meaningful revenue based upon modest margins per transaction while mitigating risk associated with commodity price volatility. Trading has performed admirably and continues to ramp-up. With the benefit of a strong network of contacts and an excellent local reputation, the business is growing encouragingly.
While the tailings processing operations remains the company's main focus, management intends to be quick on their feet in taking advantage of new opportunities which fit with their overall strategy of rapidly generating operational cash flow. The trading program is intended to provide supplemental revenues to the environmental reclamation and gold recovery programs, which are currently ramping up.
The annual audited financial statements of Newlox, which reflect the year ended March 31st, prior to the acquisition of Oro Roca SA have been completed. A Business Acquisition Report (BAR) with audited and interim statements attached in respect of the purchase of its Costa Rican subsidiary on April 14, 2014 has also been completed. Further operations updates will follow shortly.
QIS Capital: The main reason we decided to start following Newlox Gold was management’s focus on cash flow and earnings. Despite being classed with the junior resource sector, the company has sought out operations that can produce quick cash flow and should have meaningful revenue and earnings in the next 3-6 months. This will reduce the need for dilutive financings as well as provide valuation measures for the company’s shares. Newlox is currently trading with a market capitalization of only $1.8 million.
Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.245 (coverage commenced Sep. 9/11 - $0.10)
Virtutone Networks Inc. has announced that it anticipates, subject to TSX Venture Exchange approval, the completion of a its previously announced acquisition of certain assets, or underlying customers, from its largest customer in an effort to diversify the company's customer base.
Virtutone has purchased five key underlying customers of its largest customer, as previously announced. Adding these assets will improve the proportional balancing of the company's total revenue.
In addition to the diversification, Virtutone plans to take over an additional $1.2 million in revenues per month at a gross margin of approximately 3% ($36,000 per month of additional margin) as a part of the acquisition.
In connection with the acquisition, Virtutone projects the issuance of one million shares for this transaction for a deemed value of $260,000.
This previously announced asset acquisition was subject to performance criteria, which has been met, however the asset acquisition remains subject to approval by the TSX Venture Exchange.
QIS Capital: Virtutone continues to ramp up its revenue base which has improved to over $45 million in the latest quarter from $28 million in the preceding quarter. The next financial results are expected to be announced in late September. Management has also indicated that the line of credit announced recently is expected to lead to another meaningful increase in monthly revenues.
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 337,500 shares, 706,348 warrants, and 350,000 options of Blackbird Energy Inc., 264,000 shares and 100,000 warrants of Manado Gold Corp., 877,000 shares of Newlox Gold Ventures Corp., and 487,000 shares and 212,500 warrants of Virtutone 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 - 2014 QIS Capital Corporation.