A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014.Reuters
Inside the Market's roundup of Canadian small caps making news and on the move today. This post will be updated during the trading day.
CIBC World Markets initiated coverage on Journey Energy Inc. with a "sector performer" rating and $12.75 (Canadian) price target.
Journey Energy is a dividend-paying, junior oil explorer and producer focused on a number of plays in central and souther Alberta that began trading last month.
"JOY is focused on a significant number of smaller, discrete oil pools that add up to an inventory of 280 locations. That being said, about 65 per cent still need to be proven commercial through exploration drilling and we are hesitant to pay up for that inventory at this time," said CIBC analyst Adam Gill in a research note
"We believe JOY has a solid financial position, with a total payout of 106 per cent and a strong balance sheet at 0.8x discount cash flow in 2015, giving us confidence in dividend sustainability. ... That being said, while the yield is attractive at 6.2 per cent (peer average is 5.9 per cent), there is limited clarity on capital appreciation until we gain further evidence of exploration turning into development," he said.
Shares in the company, which have so far traded publicly in a range of $11.49 to $12.25, closed up 5 cents at $11.84 on the TSX Monday.
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Fission Uranium Corp. today announced results from the first 14 drill holes of the summer drill program at its PLS property in Canada's Athabasca Basin. All 14 holes returned wide mineralization, with seven angled holes and three vertical holes holes returning substantial intervals of off-scale radioactivity, it said.
"Fourteen holes, fourteen hits. We have wide mineralization in every drill hole, high-grade intervals in ten of the holes and a new mineralized area to the North of the R780E zone's eastern section. The summer drill program is progressing extremely well as we continue to rapidly expand the PLS discovery prior to a 43-101 resource estimate at the end of the year," said Ross McElroy, president and chief operating officer of Fission.
Cantor Fitzgerald Canada analysts called today's results "positive," commenting "the encouraging results expanding mineralization to the north and identifying parallel mineralized metapelitic gneissic units, underpin the growth potential of the R780E zone in every direction."
Cantor analysts estimate the PLS property contains 89.5-million pounds of triuranium octoxide, a compound of uranium. Using a spot price of $10 a pound, that would suggest the stock could be valued at $2.33 a share, or 88 per cent higher than Friday's closing price.
Dundee Securities analyst David Talbot reiterated his "buy" rating and $2.10 target on the stock, and said investors should brace for volatility in the weeks ahead as the company 's summer drilling season continues.
"FCU is already up 6 per cent this month, double its peers and in line with producers. This project matures and we await an initial PLS resource, but based on recent share price momentum we believe that its outperformance could continue through the summer on drill results. Expect more attention this week as an analyst site visit is scheduled," he said.
Shares in Fission remain well below their high in March of $1.73 but rose 4 per cent on Monday, or 5 cents, to $1.29.
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Easyhome Ltd., which provides financial services to cash constrained consumers, today announced that it has entered into a new $200-million credit facility. It will replace the company's current debt facilities and provide $115-million of additional capital to support the growth of easyhome's consumer finance business, easyfinancial.
"Being able to access additional capital allows us to fund and accelerate our growth plans for easyfinancial," said David Ingram, easyhome's president and CEO. "We expect to achieve the metrics we set for our total loan book reaching $250-million a year earlier than anticipated - by the end of 2015."
Shares jumped 8 per cent on the announcement.
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Mountain Province Diamonds Inc. announced the appointment of three leading international banks to arrange and underwrite a senior secured term loan facility of up to $370-million (U.S.). The money will be used to fund the company's share of the construction cost of the Gahcho Kué diamond mine located in Canada's Northwest Territories.
Gahcho Kué is a joint venture between De Beers Canada Inc. (51 per cent) and Mountain Province (49 per cent). The project remains on schedule for production in start in the second half of 2016. Mountain Province is currently funding its share of the capital with equity and has arranged sufficient equity to fund planned capital commitments through to the end of 2014.
Shares in the company are up nearly 2 per cent in afternoon TSX trading.
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Capital Power Corp. posted disappointing second-quarter results Friday evening, reporting revenues of $240-million versus $321-million last year. The company also missed estimates with an EPS of 17 cents compared to the consensus 22 cents. The performance was mainly driven by seasonally low Alberta power prices and lower power generation outputs. The company also announced a 7.9 per cent dividend increase to 34 cents from 31.5 cents.
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Atco Ltd. said its adjusted earnings in the second quarter fell to $57-million from $89-million a year earlier. It blamed unfavourable market conditions in its power generation business, among other factors.
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Canadian Utilities Ltd. reported second-quarter adjusted earnings of $85-million, down from $131-million in 2013, blamed also on unfavourable market conditions in its power generation business.
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Pacific Rubiales Energy Corp. provided an operational update for its second quarter 2014 operating results, which includes estimates of production and sales volumes, price realizations, and operating netbacks.
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Mandalay Resources Corp. announced an update on its current acquisition of Elgin Mining Inc., where the latter has now reached a resolution of all outstanding reclamation obligations relating to its former coal operations in Kentucky. Cash consideration available was also increased to $27-million from $25-million in order to account for the exercising of outstanding share purchase warrants by Elgin. Shares have jumped 26 per cent since the acquisition was announced early June.
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Strategic Oil & Gas Ltd. announced its first horizontal Muskeg well post spring break-up. The Muskeg well 11-24 produced at an average test rate of 545 barrels of oil equivalent per day (77 per cent oil) over the first seven days. Costs to drill and complete the well were $3.9-million, representing a 25 per cent decrease when compared to the company's average well costs in the play.
At mid-afternoon today, the stock was the third most traded on the TSX Venture Exchange, and was up just over 1 per cent.
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Tellza Communications Inc. reported that its second-quarter EBITDA slid to $1.5-million U.S. from $2.1-million U.S. the year before. Revenues however, jumped 68 per cent, rising to roughly $124-million U.S. from $74-million. The global communications company said that it had suffered from narrowing margins this quarter.
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Slate Retail REIT announced that it has entered into a binding agreement to purchase East Little Creek, a 100 per cent occupied, 69,620-square-foot grocery-anchored shopping center in Norfolk, Virginia for $9.85-million (U.S.). Funded entirely from internal resources, this will be the second acquisition by the REIT since listing. The property is anchored by Farm Fresh, a local brand of SuperValu Inc., the third-largest food retailer in the United States.
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High North Resources Ltd. announced a private placement of 11.1 million common shares at a price of 45 cents (Canadian) per share, for total proceeds of about $5-million. It also plans to issue just over 9 million common shares on a "flow-through" basis for 55 cents per share, for additional proceeds of about $5 million.
Shares in High North are down 5 per cent in early trading.
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Continental Gold Ltd. announced results for 12 diamond drill-holes through the Yaragua and Laurel vein systems at the company's 100 per cent-owned Buritica project in Antioquia, Colombia.
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Lorus Therapeutics Inc. announced that the Food and Drug Administration completed its review and cleared the company's Investigational New Drug (IND) application of LOR-253 for the treatment of hematologic malignancies including acute myeloid leukemia (AML), high-risk myelodysplastic syndromes (MDS), lymphomas and multiple myeloma. Clearance of the IND allows Lorus to initiate a Phase 1b clinical study of LOR-253 in patients with relapsed or refractory hematologic malignancies.
Shares in the company opened up more than 5 per cent.
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Xtierra Inc. said it has initiated a strategic review to consider alternatives in relation to its Bilbao silver-zinc-lead project in Zacatecas, Mexico. The company has retained Jennings Capital Inc. to assist in the strategic review process. Strategic alternatives include, but are not limited to, financing structures for the development of the Bilbao Project, the sale of all or a portion of the company's interest in the Bilbao project or a corporate transaction, it said.
Shares in Xtierra are up nearly 8 per cent in early TSX Venture trading.
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Kaminak Gold Corp. announced that its board has approved commencement of a feasibility study for the Coffee gold project in Canada's Yukon. The decision to proceed directly to Feasibility study follows on the heels of a positive Preliminary Economic Assessment that was announced last month and which indicates that Coffee represents a robust, high margin, rapid pay-back, 11-year open pit mining project at a US$1250 gold price. Feasibility activities will be initiated in the third quarter of this year.
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Cerro Grande Mining Corp. said the TSX has determined to delist the common shares of the company at the close of business on Aug. 25 for failure to meet the continued listing requirements of TSX. It is pursuing a listing on the TSX Venture Exchange.
Shares opened down 10 per cent in the company.
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Emerita Resources Corp. said it intends to complete a non-brokered private placement financing of up to 7,500,000 common shares of Emerita at a price of 10 cents per share for gross proceeds of up to $750,000.
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Romarco Minerals Inc. announced that the U.S. Army Corps of Engineers as notified the company that it will be issuing the Record of Decision on the company's 404 Wetlands permit application in November of this year. This is the only federal permit required by the company. The remaining state permits are also expected to be received within a similar timeframe.
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Pollard Banknote Ltd. announced it has been named the new primary supplier of scratcher ticket printing and services for the Virginia Lottery. The five-year contract is set to begin October 28, 2014, and includes provisions to extend the agreement for up to five additional years. The estimated contract value is $20,250,000 (U.S.) over the first five years.