A dollar sign under a magnifying glass.Vishnu Kumar
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.
Vecima Networks Inc., a manufacturer of technology in the broadband equipment market, announced that its board has adopted a dividend policy. Vecima will pay an annual dividend to its common shareholders of $0.18 per share, payable quarterly.
"The decision to declare a regular dividend at this time is the result of consistent positive financial results and the company's strong financial position," said Sumit Kumar, CEO of Vecima.
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Lundin Mining Corp. announced that concentrate production has commenced from its high grade Eagle nickel-copper mine. "Construction activities at the Eagle Mine are now substantially complete, with the project being delivered on budget and ahead of schedule compared to initial guidance," said the company, in a statement.
Chris Chang, analyst at Laurentian Bank Securities, commented, "We are impressed by the company's ability to develop Eagle on-time and below budget given cost pressures generally experienced across the industry. With the start-up of Eagle slightly below budget and ahead of schedule, we forecast significant cash flow growth for Lundin in 2015. Lundin is currently trading at a 2015E EV/EBITDA multiple of 4.1x, below the consensus mid-tier base metal producer peer group average of 5.7x." Mr. Chang maintained his "buy" recommendation and $7.25 (Canadian) per share target price.
David Charles, analyst with Dundee Securities, reiterated a "buy" rating and $8 price target. He commented, "The startup date was already expected to be ahead of schedule compared to initial guidance and to be on budget (capex slightly below $400-million), but so far recoveries and grades are better than expected and this is obviously positive. ... The company remains our TOP PICK in the sector and we believe it deserves a premium given its strong financial condition and the lower development risk compared to its peers."
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North American design firm Stantec Inc. plans to significantly strengthen its presence in the province of Quebec by acquiring the Canadian engineering operations of Montreal-based Dessau, the company announced this morning. Some 1,300 Dessau employees from 20 offices throughout Quebec, as well as offices in Mississauga and Ottawa, Ontario, will join Stantec in the transaction, which is expected to close in the first quarter of 2015, pending satisfaction of certain conditions including regulatory approvals. Terms were not disclosed.
Desjardins Securities analyst Benoit Poirier commented, "From a trading perspective, we are inclined to view today's announcement positively, given that the transaction marks STN's first material acquisition in Quebec and, at first glance, could add $1–2/share to our valuation. However, we anticipate a mixed reaction from the market, given the attention Dessau has received for its past involvement in collusion related to public contracts in Quebec and the absence of clearly defined penalties that will eventually be paid by culpable firms being investigated by the ongoing Charbonneau commission.... Although the terms of the deal were not disclosed, we believe STN could pay a total consideration of about $130-million (Canadian) based on a 'back of the envelope' estimate of about $100,000/employee."
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AGF Management Ltd. reported Q3 EPS of 17 cents (Canadian) versus the Street estimated 18 cents. Revenues were in line with market expectations.
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Canfor Corp. announced it plans to construct a pellet plant at each of the company's Chetwynd and Fort St. John sawmill sites. The pellet plants will be constructed and operated in partnership with Pacific Bioenergy Corp.
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Denison Mines Corp. announced the successful extension of the Gryphon zone of high-grade basement hosted uranium mineralization at the Wheeler River property.
Cantor Fitzgerald analyst Rob Chang commented, "The emerging world-class Wheeler River project continues to grow as a total of 14,937 meters was completed among 20 drill holes at the newly discovered Gryphon Zone. ... Today's results add further support that the Gryphon zone is the next significant high grade zone in Denison's Athabasca inventory." He reiterated a "buy" rating and $1.90 (Canadian) price target.
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Canada Carbon Inc. said it achieved better than 99.8 per cent graphite purity during preliminary pilot-scale flotation processing at its Mill Hydrothermal Graphite property.
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Strategic Oil & Gas Ltd. announced that it has increased the maximum size of its previously announced non-brokered private placement to $70-million. It will also now be comprised of a combination of common shares and flow-through common shares.
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COM DEV International Ltd. announced that it has been awarded a contract to deliver multiplexer equipment, waveguide and coaxial switches, and microwave components to be used on a high throughput communications satellite designed to provide direct-to-home premium television content to the Middle East and North Africa. The total value of the initial contract is over $7.5-million with an expansion to the contract expected in the coming weeks to include additional equipment valued over $5.5-million.
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Valparaiso Energy Inc. has announced that a letter of intent it signed with an unnamed major Canadian exploration and production company to purchase oil and gas assets in Northern Alberta has been terminated.
"The termination of the letter of intent is the result of the major Canadian exploration and production company's decision not to sell the aforementioned Assets due to a change in corporate policy," said the company.
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Karnalyte Resources Inc. announced the departure of Chief Executive Officer Thomas Drolet and said a search is under way to replace him. Chairman Bruce Townsend will be filling in for the next two months. Mr. Drolet is also no longer on the board and Jay Sujir was appointed instead.
Mr. Drolet was appointed "permanent CEO" only a month ago.
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Eloro Resources Ltd. says its shareholders approved a proposed consolidation of the number of issued and outstanding common shares of Eloro on the basis of one new common share for up to ten old common shares currently outstanding. The company's board of directors believes that the consolidation will "facilitate Eloro's ability to pursue financings for working capital and the exploration and development of its properties."
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STT Enviro Corp. said it has received new orders in the last two weeks totalling over $20-million. Shares were up 40 per cent in early trading today.
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Calyx Bio-Ventures Inc. announced it has entered into definitive agreements to acquire Cannigistics Agri-Solutions Corp., a company focused on bringing sophisticated, versatile, and flexible technology solutions to advanced indoor agriculture. Under the terms of the acquisition, Calyx will acquire all of the issued and outstanding shares of Cannigistics in exchange for 10,000,000 common shares of Calyx.
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In analyst actions involving Canadian small caps this morning:
Canaccord Genuity upgraded Parex Resources to "buy" from "hold" and maintained a price target of $15 (Canadian).
Desjardins Securities upgraded Northland Power to "buy" from "hold" and hiked its price target to $19.50 (Canadian) from $19.
Canaccord Genuity cut its price target on Merus Labs International to $3 (Canadian) from $4.25 and maintained a "buy" rating.
Paradigm Capital upgraded Yangarra Resources to "buy" from "speculative buy" with a price target of $4.50 (Canadian).
FirstEnergy Capital upgraded Crew Energy to "outperform" from "market perform" with a price target of $12.75 (Canadian).