QIS Update #27 2014 - September 5th 2014
Included in this update:
- Blackbird Energy increases total Montney acreage by 366% to 117 net sections (74,880 net acres)
- Manado Gold closes private placement
- Newlox Gold Ventures commissions flotation circuit, Nicaragua expansion to proceed
- Virtutone Networks announced August revenues and Q3 restatement for comparative purposes
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Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.345 (coverage commenced Aug. 19/11 - $0.18)
Blackbird Energy Inc. has announced that through a series of land acquisitions it has acquired, and entered into an initial agreement to acquire, 85.0 gross (85.0 net) sections (54,400 net acres) of Montney prospective land of which 8.0 gross (8.0 net) sections (5,120 net acres) are contiguous with Blackbird's existing Elmworth Montney project, bringing its total contiguous land block in Elmworth to 36.0 gross (36.0 net) sections (23,040 net acres).
The remaining 77.0 gross (77.0 net) sections (49,280 net acres) of this Montney prospective land acquisition is in East Wapiti which is located Northeast of Elmworth. Blackbird has completed an extensive geological review and Blackbird's management is excited by the prospects and additional value that the land position presents. Upon closing, Blackbird's total Montney prospective land position will stand at 117.0 gross (117.0 net) sections (74,880 net acres). 81.0 gross (81.0 net) sections of the land to be acquired are subject to customary industry closing conditions, including execution of a definitive purchase and sale agreement. The effective date of this acquisition is September 1, 2014 with an anticipated closing date of September 30, 2014. All acquisitions have been, or will be funded from existing cash on hand.
Blackbird is also pleased to announce that Mr. Craig Wiebe will be joining the Blackbird team as a consulting geologist. Mr. Wiebe is a Professional Geologist with over 20 years exploration and development experience, the majority being with unconventional resource plays. He was responsible for establishing a dominant position in a multi TCF gas play for a major oil and gas exploration and production company, as well as cofounding a successful startup company that was one of the first to develop the Montney with horizontal multi-stage fracs. Mr. Wiebe has extensive knowledge of the Montney throughout B.C. and Alberta and also brings considerable operational expertise, having been directly involved with drilling several hundred horizontal wells.
Blackbird has granted an aggregate of 1,100,000 incentive stock options to certain employees and consultants. The options are exercisable at a price of $0.32 per share and will expire on September 2, 2019. The option grant is subject to TSX Venture Exchange acceptance.
QIS Capital: The Montney formation, particularly surrounding Blackbird’s Elmworth property, has been one of the most exciting plays in the patch over the past few years. Interest in the area has picked up substantially with recent drilling success from NuVista, Encana, Exxon and Royal Dutch Shell. NuVista just picked up 12 sections of land only 2 miles away from Blackbird’s acreage for a price of $35 million. This valued the land at just under $3 million per section. Blackbird holds 36 contiguous sections next door and has a current corporate market capitalization of just $67 million. The company also should have received $8 million from the sale of its Bigstone property effective September 1. Blackbird plans to drill the first well on its Elmworth property in the fourth quarter of 2014.
A recent article in Oilprice.com explains the play quite well. This article can be found by clicking here. Blackbird has also been quoted this past week in Canaccord’s Morning Coffee, in Oilfield Review Journal, and also received a Radar Screen Report from Jennings Capital.
Manado Gold Corp. (MDO:TSX-V)
Current Price: $0.05 (coverage commenced Dec. 6/13 - $0.065)
Manado Gold Corp. has announced that has closed its previously announced private placement by issuing 1,866,700 flow-through units (FT Units) at a price of $0.06 per FT Unit and 720,000 non flow-through units (NFT Units) at a price of $0.05 per NFT Unit for gross proceeds of $148,002. Each FT Unit consists of one flow-through share of Manado, and one-half non-transferable share purchase warrant, with each whole warrant entitling the holder to purchase one non flow-through share at a price of $0.10 per share for a period of one year following closing. Each NFT 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.
The securities issued under the private placement will be subject to a hold period expiring on January 3, 2015 pursuant to applicable Canadian securities laws and the rules of the TSX Venture Exchange.
Proceeds of the offering will be used for working capital and to carry out the first phase its exploration program on the Takla-Rainbow Property to follow up on its successful 2013 drill program where hole number TR13-88 finished in a mineralized zone.
QIS Capital: We are expecting assay results from The first phase of the two-phase 2014 fieldwork at the Takla-Rainbow property in north-central British Columbia in the next few weeks.
Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.04 (coverage commenced Mar. 31/14 - $0.05)
Newlox Gold Ventures has now received delivery of the necessary reagents for the new flotation circuit, which has been successfully commissioned, on time and on budget, over the past weekend.
In accordance with recommendations by the University of British Columbia a new ball mill and a new 6-Cell Denver Flotation Circuit, has been installed at the company’s first plant. This new equipment is designed to recover fine gold, which has not previously been recovered by gravity concentration. UBC has identified this additional recovery as the primary value driver in the tailings material.
Gravity concentration represents the first phase of the company’s development strategy. The Phase I plant has yielded more than 2.5 tonnes of concentrate at over 500 g/t Au that has been stockpiled pending its sale to an identified party.
The Phase I circuit is processing 2 tph of gold bearing material while operating time is being expanded to 22 hours per day. The Phase II flotation circuit has been added to the processing stream and will significantly improve recovery and concentrate production. In addition, the flotation circuit has been designed with excess capacity to allow for future production growth.
Newlox Gold Ventures Corp. is continuing its collaboration with Professor Marcello Viega’s team at the Norman B. Keevil Institute of Mining Engineering at the University of British Columbia and is rapidly establishing its business model in Central America. To that end, the company is pleased to report that it has received confirmation from the Nicaraguan Ministry of Mines supporting its proposal to establish a processing and reclamation facility in the country.
Newlox has access to a number of high-grade historical tailings stockpiles and is deploying processes designed to remove contamination left behind by inefficient historical production while liberating the precious metals. With the material stockpiled on surface, operations are expected to achieve remarkably low production costs given that exploration, mining and crushing, the most expensive components of traditional gold producing operations, are entirely unnecessary.
Newlox’s small scale re-processing of tailings is intended to provide valuable environmental and social benefits to local stakeholders while simultaneously generating meaningful revenue.
QIS Capital: With the new ball mill and floatation circuit being operational, we are expecting a significant boost in revenues and cash flow in the next 3 to 6 months. Based on projections from Newlox, the company is forecasting annual cash flow of over $1.5 million by October 2014. With 45.4 million shares outstanding, this would equate to cash flow per share of $0.035 with the company’s shares trading at just 1.1 times forecasts. Newlox is proposing a financing of up to $550,000 at $0.05 per share. Anyone wanting more information or for those who wish to participate, please contact QIS Capital.
Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.215 (coverage commenced Sep. 9/11 - $0.10)
Virtutone Networks has announced that the company has generated approximately $11.4 million in revenue for the month of August.
We anticipated a slight decrease in revenues during the coordination of the credit facility announced at the end of July this year. said Jason Allen, Chief Executive Officer of Virtutone. Its successful integration is projected to increase commercial opportunities moving forward.
Virtutone Networks is restating its third quarter 2013 financial statements to facilitate a comparison to the upcoming third quarter 2014 financial statements. This restatement reflects the company’s discontinuation of its retail business operation effective September 1, 2013.
This restatement does not change the overall net income for the 2013 third quarter.
Third quarter 2013 financial statements restatement (for the three and nine months) ended October 31, 2013 and yields the following comparative results;
- 1.The statement of income to the loss from discontinued operations of revenue ($328,257), cost of sales ($195,933), general and administrative expenses ($407,276), stock-based compensation ($21,029), amortization ($124,229), interest income ($12,615), interest and bank charges ($10,425) and proceeds from the sale of the division of $365,000.
- 2.In addition, accounts receivable of $242,987 and inventory of $17,773 will be reclassified to assets held for discontinued retail operations as of October 31, 2013.
- 3.Overall, this restatement highlights a loss from discontinued retail operations of $53,020 with a corresponding decrease in the loss from continuing wholesale operations.
QIS Capital: Unfortunately the reasons behind the drop in revenues for August, except for mention of the coordination of the credit facility, were not explained in detail. The second quarter report is expected to be announced around mid-September. Revenues during the second quarter should total over $40 million compared to revenues of $28.4 million in the first quarter.
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 199,000 shares, 350,000 options, and 706,348 warrants of Blackbird Energy Inc., 464,000 shares and 400,000 warrants of Manado Gold Corp., 927,000 shares of Newlox Gold Ventures Corp. and 502,000 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.