Gold miner with nuggetJoe Belanger/Getty Images/iStockphoto
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.
RB Energy Inc. said it has not secured the funding required to maintain current operations. As a result, and in an effort to curtail costs, the company has halted operations at its Quebec Lithium Project and has temporarily laid off all employees other than those employees required to maintain the Quebec Lithium Project on a care and maintenance basis.
The company also said Ron Hochstein, Robert Chase and Pablo Mir have resigned as directors.
Shares in the company closed down 3 cents, or 33 per cent, at 5 cents on the TSX.
RB Energy earlier this year was listed as a top stock pick by Dundee Securities. Today, it placed the company under review, with analyst David Talbot commenting in a research note: "After hearing that its last ditch effort to raise funds to stave off closure of the Quebec Lithium Mine, the specter of RB Energy as a going concern is thrown into question, we are placing RBI Under Review. We have long said that the underlying risk is the operation, and that the financial condition of the company is largely a symptom of how well the Quebec Lithium Mine has performed. It's no secret that it hasn't yet lived up to its billing, and despite management assurances that it is almost at turnkey status, the fact that the mine isn't running makes the possibility of digging out of this financial burden without financial or strategic help, impossible. That help just disappeared, and due to uncertainty, we must place RBI Under Review.
In the short term, no production and lack of cash means that the pending TSX listing review will likely not go in RBI's favour. It's not immediately apparent whether the company would qualify for TSX-V listing immediately either. Obviously shareholders are left holding the bag here, but for how long? Should RBI manage to arrange partial sale, remove debt and get back into production, we still expect some time before full production is achieved. It also depends on what happens with the senior lenders. We are told that Scotia is co-operating…its debt is secured by the asset. Ultimately, the asset appears to be worth more than the $20 MM the market is paying for it."
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Romarco Minerals Inc. said late Tuesday that it was notified that its proposed 401 Water Quality Certification for its Haile gold mine, which is issued by the South Carolina Department of Health and Environmental Control, is consistent with state water quality standards.
"We view this as a key milestone for the company, which helps to derisk the project," commented Desjardins Securities analyst Michael Parkin in a research note today. "The permit will be effective as of October 23, 2014, unless the South Carolina Department of Health and Environmental Control receives a request for review. We have visited the site and note that there appears to be robust local support for the project as it will create local jobs, so we do not view this request for review as a serious risk. The record of decision in granting the federally issued 404 Wetlands permit is scheduled for November 2014, according to the US Army Corps of Engineers."
Romarco also said Tuesday that it expects to have a financing commitment finalized by November 2014 for the mine, which would not impact the company's project development schedule.
Shares were up 3 per cent in early afternoon trading.
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Copper Mountain Mining Corp. announced production results for the third quarter of 2014 from the Copper Mountain mine located in southern British Columbia. Copper production for the third quarter of 2014 totaled 21.7 million pounds of copper, a 9 per cent increase as compared to the second quarter of 2014, setting another new production record for the mine.
But Desjardins Securities analyst Jackie Przybylowski said the production was below her expectations, as milling rates continue to disappoint. The company is optimizing a secondary crusher at the facility, which should help to reduce stockpiled ore. "We have also reduced our 4Q14 expectation to reflect September exit throughput rates, but we continue to expect that the mill will achieve a 38,000 tpd throughput in 2015," she said.
Ms. Przybylowski cut her price target to $3.10 (Canadian) from $3.50 and maintained a "hold" rating.
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Trevali Mining Corp. reported preliminary production results for its third quarter of approximately 12.6 million payable pounds of zinc, 6.3 million payable pounds of lead and 217,600 payable ounces of silver from the Santander Mine in Peru. Trevali also increased its 2014 full-year production guidance for the Santander mine to approximately 47-50 million pounds of payable zinc, 20-23 million pounds of payable lead and 820,000 to 850,000 ounces of payable silver.
Analysts at M Partners commented that the third-quarter results were a "modest" beat of their estimates. "This was mostly attributable to better than expected by-product grades. The company also announced updated guidance, which is ahead of the company's previous guidance but is roughly in line with our estimates. Trevali is positioning itself as the next mid-tier base metal producer with significant leverage to a favourable macro-environment for zinc. Trevali currently trades at 3.8x our 2016 EV/EBITDA estimate versus peers at 4.0x," they said in a research note. M Partners has a "buy" rating on the company with a price target of $1.90 (Canadian).
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Peyto Exploration & Development Corp. said current production has already exceeded the previous year-end target of 81,500 boe/d, while capital expenditures to the end of September are estimated at $520-million, below the $625-million capital budget previously forecast to achieve that production target.
The board has approved an increased 2014 capital budget of $690-million. "This new capital budget, the largest in Peyto's history, is a reflection of the company's confidence in achieving consistent, risked returns on an even larger capital program."
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Slate Retail REIT announced that it has entered into a binding agreements to purchase two grocery-anchored shopping centers. Oakland Commons is a 73,705 square foot property located in Bloomington, Illinois and will be acquired for $8.2-million (U.S.). Forest Plaza is a 123,028 square foot property located in Fond du Lac, Wisconsin and will be acquired for $16.85-million (U.S.).
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Marathon Gold Corp. announced the discovery of high-grade gold bearing quartz-tourmaline-pyrite veining in an area located 7 km northeast along strike from its Leprechaun Gold Deposit and 5 km southwest along strike from its Victory Gold Deposit, Valentine Lake Property. "Trenching in this new gold zone has exposed multiple stacked veins with abundant coarse pyrite," the company said.
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Golden Minerals Company has announced the completion of several sales transactions totalling up to $1.3-million. Sales include 45 mining concessions comprising 770 hectares located in Zacatecas State, Mexico, to Capstone Mining Group for $700,000, as well as an option agreement with a private party to sell its 1,100 hectare Peruvian Otuzco property for $450,000.
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Mega Precious Metals Inc. announced an updated gold and initial tungsten mineral resource estimate for the Monument Bay Project located in northeastern Manitoba.
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Zargon Oil and Gas Ltd. today provided a capital budget update and revised its production guidance.
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Monthly auction metrics from Ritchie Bros. Auctioneers Inc. suggest that the company is on track to exceed the top end of its annual guidance, says Cantor Fitzgerald analyst Peter Prattas.
Ritchie Bros published its monthly auction metrics for September showing gross auction proceeds of $446-million (U.S.), up 7.2 per cent over September 2013, Mr. Prattas explains.
"We remain confident that RBA can achieve the top end of its 2014 guidance and that growth will continue into 2015," he says.
Mr. Prattas maintains his "buy" recommendation and $27 (U.S.) target price. The analyst consensus price target is $25.41, according to Thomson Reuters.
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In today's analyst actions involving Canadian small caps:
Credit Suisse analyst Ralph Profiti initiated coverage on Tahoe Resources Inc. with an "outperform" rating, calling it one of the "better positioned" precious metals companies the bank covers both operationally and financially. He set a price target of $30.50 (Canadian).
Cormark Securities upgraded Lundin Mining to "buy" from "market perform" with a price target of $7 (Canadian).
BMO Nesbitt Burns downgraded MBAC Fertilizer to "market perform" from "speculative outperform."
Beacon Research initiated coverage on Integra Gold with a "buy" rating and 70 cents (Canadian) price target.