QIS Update #36 2014 - December 17th 2014
Included in this update:
- Newlox Gold Ventures provides update on operations
We would like to take this opportunity to wish all of our readers a very Merry Christmas and a Happy and Prosperous New Year!
The weekly Forum Recap has recently been posted in the QIS Capital Forum on smallcaps.ca at www.smallcaps.ca/forum. These updates take a look back at the news and activity from the prior week as well as take a look at the week at hand. In addition, at the end of each weekly recap, we discuss a stock to watch that may be worth your time in performing some additional due diligence.
December is typically a quieter month for company news and financial reports. It should be noted that the final day for tax loss selling in 2014 is December 24th. For US stocks, the final day to trade with a 2014 settlement date is December 26th.
On Friday, the TSX Venture Index broke below 650 points for the first time since late 1999 – marking a fresh 15-year low!! Weak oil prices have led to a lot of selling in both O&G producers as well as many O&G service companies. Since September 1, the TSX-Venture had fallen by more than 380 points or 38%.
This week has been a different story with the TSX rising 482 points or 3.5%. While the TSX-Venture managed to post a gain today, it is still only up 6 points this week or less than 1%. The S&P/TSX Capped Energy Index had been the hardest hit since September 1st falling by more than 40% but has registered impressive gains of 12% over the last 3 days.
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Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.055 (coverage commenced March 31/14 - $0.05)
Newlox Gold Ventures Corp. has provided an update on the progress being made at its initial gold concentrate production facility which was commissioned in September 2014.
Following a financing in late November of 2014, Newlox has embarked on an expansion program at the company’s first processing centre which, when completed, will increase throughput capability from 40 tonnes per day to 80 tonnes per day, effectively doubling gold concentrate production.
Expansion of the plant has included the addition of a new mixing tank, installed to twin the first stage of the processing flowchart, a new conveyor to increase the rate and efficiency of ore loading, and a new hydrocyclone to boost efficiency. The addition of two cells to the flotation infrastructure as well as the installation of a new much larger gravity concentrator should be completed during the fourth quarter marking the completion of the expansion program. Limited production of concentrate has continued during the upgrade process, growing the inventory of stockpiled concentrate to approximately 4 tonnes.
Simultaneously, the company has begun the construction of a wholly owned beneficiation facility which will convert concentrates produced at the company’s current and future processing centers into gold doré for sale. The facility is located at a new site which will facilitate easy transport of concentrate from the company’s current and future concentrate plants in Central America.
The company has identified, with the help of UBC, an intensive process, which will reach high levels of efficiency while reducing costs and complexity when compared to traditional leaching techniques. The process uses an oxidizer to accelerate the leaching process as well as ensureing that undesirable elements are destroyed in the reaction, resulting in clean effluent. In addition, reagents used in the elution and Merrill–Crowe stages are recycled, lowering costs and protecting the environment.
Rapid leaching technology will allow for a small plant to process many batches of concentrate. The utilization of truly modern leaching technology allows a small circuit to “punch above its weight class” providing sufficient capacity while keeping capital and operating costs low.
When completed, the expanded plant and new beneficiation facility is estimated to yield 16 ounces of gold per day. Dore production will be further enhanced as the company develops additional projects which have been identified in the region.
QIS Capital: Newlox Gold appears to be on the cusp of some very exciting developments as significant cash flow and earnings should be just around the corner. With the forecasts from this press release, annual revenues at US$1200 gold should be around $7 million. Costs were previously forecasted at 30-40% of revenues so annual cash flow would be in the range of $4 million or $0.09 per share. At today’s closing price of $0.055, the stock is trading well below 1X expected cash flow. We will be closely following the company’s progress over the next few months.
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 1,360,500 shares, 1,200,000 warrants, and a $60,000 convertible debenture of Newlox Gold Ventures Corp. QIS Capital may have a financial relationship with this company 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.