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Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated through the morning.
GASFRAC Energy Services Inc. said it has signed a two-year contract with BlackBrush Oil and Gas L.P. to provide fracturing services in South Texas. The contract provides for a minimum commitment to GASFRAC of $7.2-million annually. "This contract represents the initial phases of GASFRAC's strategic turnaround," said president Jason Munro.
Also today, Raymond James upgraded GASFRAC to "market perform" from "underperform" - citing the recent fall in its stock price - but cut his price target to 85 cents (Canadian) from $1.80.
Shares in the company closed up 19.4 per cent on the TSX Wednesday at 92 cents.
GASFRAC is a well completion company with a fracking technology it touts to be more environmentally friendly. The stock plunged last month after the company reported a sharp decline in second-quarter revenue, as core customers reduced activity. The stock is still a far cry from its high point of the last year of $2.16.
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WesternOne Inc. released an updated growth plan Tuesday night and announced a $35-million financing that has shares under pressure today.
The company said it is acquiring heating equipment services provider Enerbuilt Technologies Inc. as well as an additional interest in workforce accommodation provider Britco USA. It also announced additional capital spending plans.
As part of its plans, it has entered into a bought-deal financing agreement with underwriters to sell 4.3 million common shares at a price of $8.
Shares in the company, which seeks growth through acquiring businesses in the construction and infrastructure services sectors, in early afternoon TSX trading were down 4.5 per cent at $7.95.
Cantor Fitzgerald Canada Research analyst Peter Prattas commented in a note, "We await further details along with the close of these transactions later this month before adjusting our estimates," said Mr. Prattas. "Yet, we see strategic and economic merit for these initiatives and expect them to prove accretive."
He maintained his "buy" recommendation and $8.50 target price. The analyst consensus price target is $9.30 (Canadian), according to Thomson Reuters.
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North American Tungsten Corp. Ltd. said a plan to develop its Mactung project, a tungsten property in Yukon, has received environmental approval. Mactung is currently anticipated to be about 50 per cent larger than the company's existing Cantung mine and is expected to produce 2,000 tonnes per day from an underground operation, the company said.
Shares in the company were up 8 per cent in late TSX trading Wednesday.
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Marlin Gold Mining Ltd. announced that it has received Mexican government approval of its Environmental Impact Statement at the El Compas project in Zacatecas, Mexico. This represents Marlin's second permitted mine in Mexico, the first being its flagship La Trinidad mine.
Management plans to complete exploration drilling, as well as assess the possibility for monetization of the asset to maximize shareholder value; discussions have begun with potential acquirers and joint venture partners.
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Yamana Gold Inc. provided an update on its c1 Santa Luz and Pilar projects today and said it should meet its production guidance for the rest of this year and into following years.
C1 Santa Luz along with Pilar, both located in Brazil, have been on a gradual process of ramp-up and evaluation over the past year in order to determine their continuing viability in light of certain operational challenges and the decline in metal prices last year. The company this week decided to temporarily suspend ramp-up activities at C1 Santa Luz so that it can maximize cash flow rather than focus on production. Meanwhile, Pilar remains on track for commercial production before the end of this year, the company said.
"While the company will continue to evaluate its production guidance for 2014 in light of its decision relating to C1 Santa Luz, production should be modestly affected, if at all, as C1 Santa Luz was expected to modestly contribute to production and any variance should be offset by refocused management efforts on improved and increasing production from the company's cornerstone operations. The impact on costs and cash flow is expected to be positive as C1 Santa Luz was not expected to contribute positively to costs or cash flow and with refocused management efforts, further cost improvements are in progress," a statement from Yamana said.
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GoGold Resources Inc. announced the results of a Preliminary Economic Assessment for its 100-per-cent-owned Santa Gertrudis gold mine in Sonora State, Mexico that confirms the potential for a new low-cost heap leach mine.
At a gold price of $1,250 per ounce, Santa Gertrudis has an estimated $232-million (U.S.) after-tax net cash flow, a $150-million after-tax net present value at a 5-per-cent discount rate, a highly attractive after-tax internal rate of return of 58 per cent, and a low initial capital expenditure of $32-million for construction and mine preparation, it said.
The PEA has also significantly increased the indicated mineral resource estimate by over 200,000 ounces of gold and the inferred mineral resource estimate by over 113,000 ounces of gold from the original mineral resource estimate of June 17, 2014, the company said.
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In analyst actions today involving Canadian small caps:
CIBC World Markets downgraded Sandvine to "sector performer" from "sector outperformer" with a price target of $3.50 (Canadian).
Industrial Alliance upgraded High Arctic Energy Services to "strong buy" from "buy" with a price target of $6.50 (Canadian).
Industrial Alliance upgraded McCoy Global to "strong buy" from "buy" with a price target of $7.20 (Canadian).
Raymond James initiated coverage of Chinook Energy with an "outperform" rating and $3.10 (Canadian) price target.
RBC Dominion Securities initiated coverage on High Liner Foods with an "outperform" rating and $26 (Canadian) price target.
Paradigm Capital initiated coverage on Canamax Energy with a "speculative buy" rating and $1.75 (Canadian) price target.
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Asanko Gold Corp. provided a resource update on Phase 1 of the Asanko Gold Mine (formerly Obotan) in Ghana. Overall total ounces were unchanged at 4.5 million ounces while the average grade increased by 2 per cent to 2.22 grams per tonne.
"While there was no significant movement in ounces, the update adds certainty to the resource and paves the way for completion of a detailed mine plan by November 2014 for the fully funded phase 1 project," commented Clarus Securities analyst Nana Sangmuah in a note. He maintained a "buy" rating and $4 (Canadian) price target.
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Cangold Ltd. reports that initial field work on the Guadalupe de los Reyes Gold-Silver Project in Sinaloa State, Mexico has returned high-grade gold and silver assays. Cangold geologists are focusing on detailed geological mapping, trenching, and rock sampling in order to further define the numerous mineralized structures on the property.
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Nobel Real Estate Investment Trust has acquired a commercial property comprising 18,637 square feet of gross leasable area in Mascouche, Quebec. The property, which was purchased for $3,575,000, excluding acquisition costs, has a current occupancy of 77 per cent and the main tenants are Garderie Éducative Les Piverts Inc. and Dépanneur L'Esplanande Inc.
Nobel REIT has also announced a cash distribution of $0.000509 per trust unit of the REIT for the month of September 2014. The distribution will be payable on Oct. 15, 2014 to unitholders of record as at Sept. 30, 2014.
Shares in the REIT were up 9 per cent this morning on the TSX Venture Exchange.
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Formation Fluid Management Inc. has released its consolidated financial results for the years ended June 30, 2014, and 2013 and has reached profitability for the first time due to record revenues. Shares were up 28 per cent in late trading Wednesday.
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Sama Resources Inc. announced a third mineralized surface discovery showing grading of up to 8.41 per cent copper and up to 0.76 per cent nickel in Guezonpleu, Ivory Coast. The discovery outcrop shows a mineralized gabbro with high concentrations of visible and altered nickel and copper bearing sulfide, the company said.
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Klondex Mines Ltd. said recent underground infill and exploration drilling at its Midas Mine in Nevada has produced encouraging results for potentially increasing the mineral resources. Sixty-six core holes have been completed along approximately 914 m of vein strike at 23 to 38 m centers. "Results of this program support the existing inferred mineral resource estimate and have provided additional information for use in mine planning," the company said.
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Torex Gold Resources Inc. said infill drilling in the El Limon Sur portion of the El Limon deposit in Mexico has added a net 126,000 ounces of gold in the measured and indicated category. The El Limon Sur area is now estimated to contain 2.6 million tonnes in the measured and indicated categories, grading 2.73 g/t, for 225,000 ounces of gold, and 2.3 million tonnes, grading 2.45 g/t for 182,000 ounces of gold in the inferred category.
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Xcite Energy Ltd. said its subsidiary Xcite Energy Resources Plc has agreed to collaborate with Statoil (U.K.) Ltd. and EnQuest Heather Ltd., to share field-specific technical and operational information to evaluate the potential utilisation of common gas import infrastructure between the Kraken, Bentley and Bressay fields in the North Sea.
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