Derek Warren, Portfolio Manager, Morguard Financial Corp. answers your questions about Plaza Corp, Pure Industrial REIT, Milestone Apartment REI, and Dundee International REIT.
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.
Parkland Fuel Corp. announced late Wednesday that it has entered into an agreement to acquire the assets of Pioneer Energy.
Parkland will pay $378-million (Canadian), including $259-million in cash, $119-million in common shares of Parkland, and the assumption of standard operating liabilities. At 6.9 times Pioneer's trailing 12-month EBITDA of approximately $55-million, Parkland says the acquisition is both accretive and attractively priced for a premier retail fuel network. Suncor Energy, as one of the current joint owners of Pioneer Energy, will receive $182.5-million in cash for its share.
CIBC World Markets analyst Kevin Chiang provides three reasons to view Parkland's acquisition of Pioneer favourably.
"1) As with a typical Parkland acquisition, the roll up of Pioneer will result in significant supply synergies as it can take advantage of arbitrage pricing opportunities and improved negotiating terms with suppliers. 2) The acquisition of Transmontaigne a couple of years back created a foundation for further expansion into Eastern Canada for Parkland as this solidified its supply capabilities in the region. 3) Retail assets provide the highest return on capital, which can be up to 20%."
Mr. Chiang maintains his "sector performer" rating and is raising his target price to $23 from $22.25.
Shares in Parkland Fuel, which pays a nearly 5 per cent annual dividend, were up 10 per cent in early afternoon TSX trading.
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DirectCash Payments Inc. announced it has agreed to acquire the ATM assets and business of Australia's Ezeatm Ltd. for $14.1-million (Australian). Ezeatm has 1,325 ATMs in Australia. The company will use its credit facility to fund the transaction.
Acumen Capital Research analyst Brian D. Pow commented, "We believe this is a positive transaction that is consistent with the company's growth objectives. On completion of this transaction DCI will have about 7,250 active ATMs, growing further relative to the second place operator with 5,500 ATMs. ... This acquisition sets DCI's Australian business on the right path and should help anchor growth expectations for the geography over the next 12 –18 months."
Mr. Pow reiterated a "buy" recommendation and $25 (Canadian) price target.
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True Gold Mining Inc. said the Burkina Faso Council of Ministers has approved the issuance of exploitation permits (equivalent to mining permits) for the Kao and Nami deposits at the Karma Gold Project.
The Kao and Nami exploitation permits are extensions of the existing Karma Exploitation Permit received in January, 2014, which includes the development of the Goulagou I, Goulagou II and Rambo deposits.
"We now have all required permits in place, both exploitation and environmental, to fully develop all five deposits within the current Karma mine plan," Dwayne Melrose, CEO of True Gold, said in a statement. "With the final permits approved, detailed engineering complete, our mining fleet ordered, the barrage complete, and construction underway, we remain on track to build Burkina Faso's next gold mine and begin pouring gold by the end of 2015."
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Huntington Exploration Inc. announced late Wednesday that it had entered into an amalgamation agreement with Regency Metals Corp., a wholly-owned subsidiary.
The amalgamated company will continue as one wholly-owned subsidiary of Huntington, and Regency shareholders will receive approximately 2.916 common shares of Huntington for every one Regency common share.
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Trevali Mining Corp. provided a status update on construction and mine-start activities at its wholly-owned Caribou mine and mill complex located in the Bathurst Mining Camp of northeastern New Brunswick.
Both surface and underground development programs at Caribou accelerated over the summer and the project remains on schedule and on budget for start-up commissioning in the first half of 2015, it said in a statement.
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Labrador Iron Mines Holdings Ltd. reported positive drill results from its $5-million exploration program on the Howse Deposit, which is a joint venture with Tata Steel Minerals Canada. It also updated the status of the project's development ahead of initial production that is expected in 2016.
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Slate Retail REIT announced today that it has entered into agreements to acquire two properties representing 250,569 square feet of gross leasable area for an aggregate purchase price of $35.8-million (U.S.).
The acquired properties consist of a 63,572 square foot shopping centre located in Seminole, Florida and a 186,997 square foot shopping centre located in Derry, New Hampshire. The REIT also announced that it has reached an agreement with a syndicate of underwriters to issue 4,260,000 class U trust units of the REIT on a bought deal basis for gross proceeds of approximately $50-million (Canadian).
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Anaconda Mining Inc. said its sold 3,933 ounces of gold and generated $5.51-million in revenue at an average sales price of $1,401 per ounce during its fiscal first quarter. Sales volume and revenue were both approximately 4 per cent lower than a year earlier, it said.
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Benton Resources Inc. announced that drilling has confirmed the potential for discovering additional gold resources on its 100 per cent owned Cape Ray gold project located in southwest Newfoundland. Results from the recent diamond drill program have significantly increased the potential of the PW zone which has returned grades of gold and silver with base metal credits, it said.
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In analyst actions this morning involving Canadian small-cap stocks:
RBC Dominion Securities cut its price target on Oncolytics Biotech to $3 (Canadian) from $5 and maintained an "outperform" rating.
Global Securities Research initiated coverage on Poydras Gaming Finance with a "speculative buy" rating and 50 cents (Canadian) price target.