Tekmira Pharmaceuticals Corp.'s head office is pictured in Burnaby, B.C., on Aug. 5, 2014.Ben Nelms/Reuters
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.
Argent Energy Trust said it has initiated a process to explore a range of strategic alternatives, including putting itself up for sale, divestments, a merger or a joint venture. Shares in the company, which has an annual dividend yield of more than 11 per cent, are up about 8 per cent in late afternoon TSX trading.
"Argent does not intend to make any further announcements regarding the process unless and until the board of directors has approved a specific transaction or course of action or otherwise determines that disclosure of developments is appropriate. Argent cautions that there can be no assurances that this strategic review process will result in an acceptable transaction of any form. In the meantime, the trust's monthly distribution of 2 cents per unit remains intact," the company said in a statement.
Argent Energy is a Canada-based open-ended trust that focuses on acquiring, exploiting and developing long-life crude oil and natural gas reserves in basins located primarily in the United States of America.
Of six analysts who cover the company, five rate it as a hold, and one as a sell, with an average price target of $2.67 (Canadian), according to Bloomberg data. RBC Dominion Securities today reiterated a "sector perform" rating on the stock and a $3.75 price target.
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Shares of companies that are studying potential vaccines for Ebola, including Canada's Tekmira Pharmaceuticals Corp., are climbing today after federal officials announced late Tuesday that the first case of the disease has been diagnosed in the U.S.
The World Health Organization has worked to speed up the use of some experimental vaccines and companies are ramping up testing. Earlier this month, NewLink Genetics said it would start safety testing of a vaccine within a few weeks, while Inovio Pharmaceuticals said it would start human trials of a DNA-based vaccine in early 2015.
Vancouver-based Tekmira shares are up 20 per cent in early TSX trading. A research note from RBC says Tekmira is working to launch a controlled clinical trial of its early-stage Ebola drug that may start later this year, noting that Tekmira is the most advanced of the Ebola companies.
"We had TKMR management on the road last week meeting with investors and discussed possible scenarios including how to monetize or advance the company's Phase I Ebola drug," RBC analyst Michael J. Yee said in a research note late Tuesday. "Based on our understanding, TKMR will be working with a consortium and likely FDA to plan a controlled clinical trial, possibly in Africa in perhaps 40 patients, that could start later this year (TKMR needs time to make the drug this year for the trial). Data could be in 2015."
"If successful, that might eventually lead to some form of FDA approval later in 2015. It is very possible the CDC may use TKMR's drug to treat the US patient or future patients, as the drug has been granted potential use by FDA for investigational use in Ebola patients in US jurisdiction (and TKMR has already treated some patients in the US). However, ultimately, to monetize anything, that would have to lead to a US "stockpile order," he added. "Based on our conversations with the company and historical precedent USA defense contracts, that might be future $75–100M recurring orders (depends on budgets, etc.), so investors might place a low- to mid-single digit multiple of sales on that, and divided by 25M+ shares, may be a $5–10/share value. Using a 30–50% probability of success, this would yield a few dollars per share of valuation."
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Westport Innovations Inc. late Tuesday cut its guidance for the current year, sending its shares plunging nearly 25 per cent today. It now sees 2014 revenue coming in at a range of $130-million to $140-million and no longer expects to post positive adjusted EBITDA for this year.
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Canfor Corp. has purchased the operating assets of Southern Lumber Company Inc., including a sawmill in Hermanville, Mississippi. The sawmill is in an area of exceptionally high quality fibre and is well suited for higher value product lines, says the company, in a statement. The purchase price excluding working capital is $48.7-million (U.S.) and the completion of the transaction is expected at the end of the first quarter of 2015.
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Response Biomedical Corp. said it been granted forbearance in a term loan agreement with Silicon Valley Bank, under which the bank will agree not to exercise its rights in respect of a breach of a financial covenant under the terms of the agreement until October 31, 2014.
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Temple Hotels Inc. said it would internalize its asset and hotel management functions, ending its agreement with Atlific Hotels and Shelter Canadian Properties Limited. The total cost of the combined management services contracts is 3.5 per cent of hotel revenues, which amounted to $6.5-million during the year ended September 30, 2014.
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Iona Energy Inc. said it will need to cut gas exports from its Huntington field because of a problem with "a third-party field exporting gas" within the Central Area Transmission System pipeline.
"As a result of this field incident, Huntington gas export will be reduced until October 18th and is then likely to be shut in from October 18th until the end of the planned shutdown on December 5th. This restriction will allow Huntington to produce up to approximately 2,500 boe/d net to Iona up until October 18th."
Shares plunged 38 per cent in morning TSX Venture trading.
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The Cash Store Financial Services Inc. said it has obtained an order from the Ontario Superior Court of Justice granting a stay extension under its current Companies' Creditors Arrangement Act proceedings to November 28, 2014.
"The court also authorized the company and its subsidiaries to enter into a further amendment to its amended and restated debtor-in-possession financing agreement, pursuant to which an additional loan in the aggregate amount of $5-million will be available to the company."
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Great Canadian Gaming Corp. said a number of its executives have adopted automatic securities disposition and/or purchase plans, in accordance with the Ontario Securities Commission and the company's insider trading policies. Trades under these automatic plans are expected to occur between October 30, 2014 and October 30, 2015.
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AlarmForce Industries Inc. announced Tuesday that its board of directors has appointed Anthony Pizzonia as the president and chief executive officer and Chetna Kapadia as chief financial officer, effective Sept. 30, 2014.
Mr. Pizzonia has served as chief financial officer since 1995. Ms. Kapadia has been with Alarmforce since 1996.
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Namibia Rare Earths Inc. reported the positive results of a Preliminary Economic Assessment on the Lofdal Rare Earths Project in Namibia, which confirms the technical and economic potential of the project.
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Petaquilla Minerals Ltd. announced that it has arranged a bridge loan of $18-million (U.S.) to provide funding for general corporate and working capital purposes. It also announced some board changes and a shift in its fiscal year.
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Avigilon Corp., which provides security solutions, announced that its High Definition Stream Management (HDSM) technology has been awarded a patent in the United States. HDSM, a video stream management technology, manages the bandwidth consumed by high-definition video footage while maintaining superior image detail.
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Cyprium Mining Corp. said a wholly-owned Mexican subsidiary has secured the exclusive use of a 100-tonnes-per-day flotation plant located outside the City of Chihuahua in Northern Mexico. The plant will immediately be used by Cyprium to offer toll milling services to local miners in the area. The plant will eventually be used by Cyprium for its own use once the company's Las Cristinas project goes into production.
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A pull-back in the markets is the perfect time to buy quality stocks like Storm Resources Ltd., says Raymond James Ltd. analyst Kurt Molnar in initiating coverage on the stock today.
"This is simply an outstanding management team, in our view, with strong strategic and operational acumen and a large position in the Montney region we find most interesting after Kakwa and Karr (Alberta)," says Mr. Molnar.
He said that Storm has a large Montney land base (at Umbach, B.C.) which resides at a relatively shallow depth of only 1,800 meters, suggesting high profitability should the fracking go as planned.
"Given then that we remain very early in optimizing techniques and defining the full scale of the drilling opportunity, the chance to buy this stock at lower levels due to market spasms is a welcome opportunity, indeed," he says.
Mr. Molnar initiated coverage of Storm Resources with an "outperform" rating and $8 (Canadian) price target. The analyst consensus price target is $7.11 (Canadian), according to Thomson Reuters.
In other analyst actions today involving Canadian small-cap stocks:
Raymond James downgraded Black Diamond Group to "outperform" from "strong buy" with a price target of $29 (Canadian).
BMO Nesbitt Burns cut its price target on Africa Oil to $9 (Canadian) from $12 and reiterated an "outperform" rating.
RBC Dominion Securities slashed its price target on Westport Innovations to $11 (U.S.) from $17 and maintained a "sector perform" rating, after the company cut its 2014 outlook. Lake Street Capital also downgraded its rating on the stock to "hold" from "buy", with a price target of $20 (U.S.).
Jennings Capital initiated coverage on Aveda Transportation and Energy Services with a "buy" rating and $7 (Canadian) price target.
Jennings Capital initiated coverage on Contact Exploration with a "buy" rating and 85 cents (Canadian) price target.