QIS Update #3 - 2019 - Newlox Gold Ventures and NTG Clarity Networks release some corporate updates - February 27th 2019
Included in this update:
- Newlox Gold Venture Announces Successful Optimization Program and R&D Update
- NTG Clarity Networks Signs Debt Restructuring Agreement and a Shares for Debt Private Placement
The overall markets have been very favourable to-date in 2019. Even the small-caps have been doing pretty well with the TSX Venture moving up 66 points this year or 11.9%. Unfortunately we haven't seen much movement in the companies we report on as there has been a lack of news flow and new developments from these companies. Most of the increases in the markets have come from the larger companies gaining in marketshare and not necessarily in measurable fundamentals, while many smaller companies continue to be challenged to gain new contracts or receive financing. The news from Newlox Gold Ventures this morning is intriguing and this company could become a very interesting story to follow over the next 3-12 months if management can deliver in a meaningful manner on the business plan laid out in the press release.
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Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.05 (coverage commenced Mar. 31/14 - $0.05)
NEWLOX ANNOUNCES SUCCESSFUL OPTIMIZATION PROGRAM AND R&D UPDATE
Newlox Gold Ventures Corp. has completed its third round of testing and optimization work at its remediation and gold recovery project in Central America.
During this period, the operations and engineering team, under the guidance of its technical advisors, focused on the optimization of the beneficiation circuit. This third, and final, stage of development built upon the positive results from the previous two stages of test work during 2018. The Company is now poised to advance toward full-scale commercial operations.
Recoveries at the processing plant have steadily increased during the three stages of optimization and have attained a satisfactory level of efficiency. The processing plant now exceeds the targeted efficiency level, and the stage is set for Newlox to transition to commercial operations by increasing throughput.
Management is pleased to be able to begin commercial operations and expect to rapidly grow both precious metals recovery and environmental efficiencies over the coming months.
Importantly, during the same period, and as announced on 5 November 2018, the Company has advanced its ground-breaking Clean Gold Production Technology research and development project in partnership with Argo Applied Technologies ("Argo"), the British natural resources technology company and the University of Leicester. Together we will develop and deploy this cutting-edge clean gold production technology. Initial test work has already indicated the potential for the very rapid dissolution and recovery of both gold and mercury, faster than the industry standard leaching techniques available today.
DESionTM technology is based on the use of Deep Eutectic Solvents, developed at the University of Leicester, to process mineral ores. DESionTM presents a non-toxic, environmentally safe, processing option for the recovery of precious metals and mercury from Newlox's feed material. Newlox's strong commitment to environmentally and socially responsible precious metals recovery, established at its first completed tailings remediation and reprocessing plant, will be enhanced through the application of this cutting-edge technology. Management believes that this approach will elevate the precious metals industry globally through the broad application of clean gold technology and Newlox will to be first-to- market with it at the Company's planned expansion project in Central America.
"We are very excited by the research being conducted in partnership with Argo Technologies, and Argo's philosophy fits in with Newlox's strategy of recovering gold through socially and environmentally responsible processes recovering contaminants and residual precious metals from historical waste."
"Having received very encouraging results from the recently completed first round of testing, Newlox is excited to undertake a second round of R&D and are currently preparing to ship a 500 Kilogram bulk sample to the UK for further testing," commented Ryan Jackson, President of Newlox Gold Ventures.
Having completed the optimization work at the Company's first processing plant, Newlox is poised to begin commercial operations. Newlox plans to start commercial operations at a rate of 20 tonnes per day and operate monthly precious metals recovery cycles.
Newlox's operations team plan to increase plant throughput to 30 tonnes per day in the second month of steady-state operations before growing to 40 tonnes per day in the third month. Throughput is expected to continue to increase month-over-month during 2019, reaching the targeted 80 tonnes per day level before year-end.
QIS Capital: This is great news from Newlox Gold Ventures and if successfully implemented, this could be a very exciting company to watch over the next 12 months. The commencement of commercial production should allow the company to classify sales as revenue rather than as an offset to property value and should enable investors to more accurately value the company based on current and expected fundamentals. The research and development technology is also an exciting development and if Newlox can successfully be first to market with this technology, the company should attract much more exposure and attention.
NTG Clarity Networks Inc. (NCI:TSX-V)
Current Price: $0.03 (coverage commenced Feb. 4/10 - $0.045)
NTG Clarity Receives Extension of Facility 4 Credit Line
Further to its announcement on February 6, 2019, NTG Clarity is pleased to announce that the Company has received an extension of its Facility 4 Credit Line to September 30, 2019. All terms and conditions of the Facility 4 Credit Line, with the exception of the expiry date, remain the same. The bank requires NTG to pay down $70,000 per month against the outstanding principal of this facility.
Management has made significant strides in reducing debt and working towards returning the Company to profitability and a stronger financial position as validated by the lending institution’s continued financial support during this corporate restructuring process. Management is anticipating continued operational growth and financial improvement during 2019.
NTG SIGNS A RESTRUCTURING OF CREDIT FACILITIES AGREEMENT WITH THE BANK
Toward the end of January, 2019, NTG Clarity Networks Inc. signed a restructuring of credit facilities agreement with the bank to replace the existing credit agreement.
In principle, the new restructuring agreement is similar to the previous one, with the bank accepting Euler Hermes as the company's primary insurance company, and extending Facility 4 repayment to March 31, 2019. The bank requires NTG to pay down $70,000 per month (up from $60,000 per month) against the outstanding principal of this facility.
NTG has signed with Euler Hermes (a subsidiary of Allianz) to replace EDC as primary insurer, due to the fact that EDC withdrew all insurance support for Saudi Arabia.
The new credit facilities are more versatile and provide NTG Clarity with the ability to better match invoicing with work in progress. The restructuring also allows for better cash flow management so greater balance can be achieved toward corporate growth initiatives and debt repayment.
NTG CLARITY NETWORKS INC. ANNOUNCES SHARES FOR DEBT PRIVATE PLACEMENT
NTG Clarity Networks Inc. plans to issue up to eight million common shares of the company at a deemed price of five cents per share to settle indebtedness of approximately $400,000 owed to employees, senior officers, directors and consultants of the company. The transaction will help NTG reduce its debts and improve its balance sheet. Completion of the transaction is subject to customary conditions, including approval of the TSX Venture Exchange.
A portion of the shares-for-debt transaction will be a related-party transaction within the meaning of applicable Canadian securities laws as some of the subscribers include directors and officers of the company who will subscribe for an aggregate of 5.96 million common shares in settlement of indebtedness of $298,000. The board of directors of the company approved the transaction, with the directors participating in the transaction having abstained from the approval. The transaction will be exempt from valuation and minority approval requirements applicable to related-party transactions on the basis that the value of the transaction is less than 25 per cent of the company's market capitalization. The company anticipates filing a material change report fewer than 21 days prior to the closing of the transaction to improve the company's financial position as expeditiously as possible.
QIS Capital: With the latest debt facility extension and restructuring, NTG Clarity continues to receive support and validation from its principal lender. This is an important partnership as the company continues to restructure its debt and improve its financial position. We haven't seen many orders announced from NTG Clarity recently, but the company has sufficient work on hand for 2019 and we hope to see further contract announcements in the near future.