All posts by Peter Murray

CSE Issuer Stories, CSE Quarterly

IGEN Networks takes relationship between car and driver to a whole new level

This story was originally published at www.proactiveinvestors.com on Sep 03, 2015 and featured in The CSE Quarterly.

Have you ever wished you knew how fast your teenage son was driving your car when he borrows it? Or exactly where dear old dad is when he is 40 minutes late for a family dinner?

Or that your car battery is about to conk out before it does so and leaves you stranded in the middle of a downpour?

If so, then you’ll want to know about IGEN Networks Corp. (CSE:IGN; OTCQB:IGEN), as the company is beginning to commercialise a system that sends all this information and more straight to your mobile phone in real time.

From monitoring the location and driving behavior of family members to tracking a fleet of drivers to ensure they are doing what you pay them to, the enhancements to safety and efficiency are far-reaching.

IGEN President and CEO Neil Chan and his team have really thought this through, to the point that not only does their solution address safety problems for drivers but also marketing problems for car dealers.

The chain of use begins when a new car arrives on a dealer lot and is installed with the IGEN hardware, a box about half the size of a computer mouse. Dealers are able to track cars if they are stolen, and the companies that finance the cars know how many cars are on each dealer lot. They will know which ones too, as the system provides the Vehicle Identification Number unique to each automobile as part of its data feed.

When a customer purchases a new car they have the opportunity to subscribe to the IGEN service and have a full array of real-time data available to them to monitor the conditions and use of their car.

The dealer benefits as well, not only from having sold the system but also because it creates an ongoing connection with the car purchaser. One of the biggest challenges for car dealers is customer retention. In other words, once a customer purchases a car, how do you get them to come back to you for their next purchase, and in the interim how do you keep them loyal to your dealership for oil changes and other service?

Because the IGEN system is monitoring the vehicle, it can automatically inform the owner when it is time for an oil change. But this can be programmed as a dealer function as well. That way, the dealer can e-mail the owner to let them know that their automobile needs servicing, and perhaps send a coupon or some other type of enticement along with the message to encourage the owner to use the dealership.

“Less than 10% of customers come back to the dealer after the warranty period expires,” Chan points out.

It is the classic win-win situation, where the customer and the business both derive clearly identifiable benefits from use of the system.

Another benefit to consumers is the potential for lower insurance rates. In this scenario, the driver chooses an insurance company that agrees to a discounted premium in exchange for the ability to monitor driving habits so the insurer knows if the driver is operating the vehicle safely and adhering to limitations within the terms of the policy. The owner saves money and the insurance company knows it is underwriting someone who realizes they are being monitored and therefore had better drive responsibly.

Chan explains that the insurance industry in the United States suffers some $15 billion each year in what is known as “rating errors,” essentially money left on the table by insurance companies because they are incorrectly assessing the behavior of the drivers they insure. “The fact is they are guessing and don’t really know how you drive,” says Chan.

“The premium discounts come from the ability of the insurance company to have better visibility on your driving patterns. We have the capability within our platform to know whether you are a good driver or a bad driver. We have developed algorithms along with insurance companies to determine that as it relates to premium discounts.”

Chan names some of the biggest insurers in the United States and says “this is where they are heading – if you want a discount on your insurance you will have to have one of these in your car.”

The driving force behind the idea and creation of the technology to support it is Chan himself, whose background fits the IGEN vision perfectly. As Senior Vice President for Sales and Marketing at Webtech Wireless, a leader in GPS-based fleet management, Chan was essentially responsible for executing the company’s strategic plan. Under his watch, Webtech grew to have 800 customers and some 240,000 location devices in over 40 countries.

Earlier in his career, Chan founded and built Motorola’s broadband access business in the Asia Pacific region, establishing 12 regional offices along the way, and was involved in the actual creation of wireless broadband through a company he helped put together called Airvana.

Thanks to these and other Senior roles at successful technology companies, Chan also understands a relatively new, but very important, market that depends on our use of mobile phones, computers and other connected devices – big data.

Once IGEN has enough vehicles equipped with its monitoring hardware, it will be able to profile drivers in different jurisdictions and pool data that can be analyzed to show how people live their lives, via their cars. Marketers, government, infrastructure planners and many others should be willing to pay a pretty penny for IGEN data and related analytics.

“I can be specific regarding the various services we offer but at the end of the day this is our business,” says Chan of analytics. “We know the lifestyle of a family based on the time they are spending in the car. Who is driving and how much time are you spending in various locations throughout the day? There is a lot of information there and our model is targeted at the consumer segment, where we are going to get the biggest sample.”

Almost sure to make that sample larger over time is a relationship with Verizon Wireless in the United States announced on May 21 of this year. Under the agreement, Verizon sales representatives will sell IGEN’s system to automobile dealers in addition to the telephones and other products they are already marketing.

“One of the first things I always used to do was go find the gorilla to hold its hand, and that was usually the carrier. I get inside the carrier to develop a relationship and that is how you expand your channels,” says Chan.

“With the Verizon partnership, we are preparing the Verizon sales force to sell our products and services into dealer channels across the United States. We do business with 500 dealerships now but there are 25,000 new car dealerships in the country, so we have barely scratched the surface.” Chan goes on to explain that a large dealership sees about 500 vehicles pass through its lot every month.

When asked to boil the appeal for drivers down to a single concept, Chan is quick to choose “consumer empowerment.” He explains this using transportation trailblazer Uber as an analogy. “What the difference is between before Uber and the present is now the consumer interacts directly with the driver. It is simple but it has created a billion dollar industry. We’ve bypassed competitors who require you to talk to someone to get information. With IGEN the information goes directly to you.”

And taking that concept one step further, could the benefits extend beyond paying customers by serving one day as a solution to the plague of bad driving? “I believe family behavior changes,” says Chan. “I have never been alerted on speeding with any of my kids when they have taken the car. It does change everyone’s behavior for the better.”

Revenue in the quarter through June 30 was US$289,065, some 90% of it from hardware sales. The first year of service is baked into the initial sale, and profit margins are good, but it is in the second year — the renewals — when the margins get really juicy.

“We are bringing the control back to the consumer,” says Chan in summary. “Providing that direct information to the consumer is really the essence. Being able to collect and use that data, being in the analytics business, is where we think the future is. And we understand technically how all this needs to come together, and what metrics you need to focus on to make sure you have a profitable and ongoing business for the long term.”

Learn more about IGEN Networks Corp. at http://www.igen-networks.com/ and on the CSE website at http://thecse.com/en/listings/technology/igen-networks-corp

CSE Issuer Stories, CSE Quarterly

Global Gardens’ Veggemo beverage targets fast-growing dairy alternative space with fresh approach

This story was originally published at www.proactiveinvestors.com on December 8, 2015 and featured in The CSE Quarterly.

With typical acerbic wit, the late columnist Mike Royko once offered his readers a simple rule for eating healthily: “If you enjoy it, you can’t have it; if you don’t like it, you can eat all you want.”

That was a little over three decades ago, when there was probably some element of truth to Royko’s tongue-in-cheek guideline. Today, however, the list of products that not only are tasty but also good for you is long and growing.

Global Gardens Group (CSE:VGM) made that list a little longer on November 5 when it released a product line aimed squarely at the highly popular almond and soy milks that many health-conscious adults view as a refrigerator staple.

Veggemo is a vegetable based dairy alternative that tastes delicious and feels so much like milk, according to the company, that even devoted milk drinkers will be hard-pressed not to give it serious consideration. Factor in the absence of bad stuff like trans fats and cholesterol and one begins to understand why the Global Gardens management team so deeply believes it has a winning combination on its hands.

That combination might never have come together were it not for a fateful meeting four years ago between now president and chief executive officer (CEO) Rob Harrison and vice president (VP) of  Marketing, Wade Bayne.

Harrison had traveled to Vancouver from Ontario to see an early version of the product at an incubator group founded by executives from Lululemon. Bayne had been invited to the office that day as well, and the two experienced consumer goods executives quickly found themselves on the same page. “We both perceived a huge opportunity,” says Harrison.

Bayne, whose background includes executive positions at names like Molson Coors and Procter & Gamble, explains that being in the right business at the right time is everything. “In an industry that is enjoying great growth, even an average company can do well, whereas in an industry that is flat or declining, a strong company will struggle,” he says.

“So, before you choose where you want to be, find an industry that has strong growth driven by factors that are sustainable.”

Harrison, who has advised the likes of Heinz, Nabisco and Nestle, claims that the dairy alternative beverage category is growing at double-digits per quarter, which compares to 1-2% growth for consumer goods overall in Canada.

And then there is dairy itself.

“You see dairy milk declining on a per capita basis for the last 25 years and people migrating to our category,” explains Harrison. “As marketers, you see exponential growth, a new category, great margins and strong demand from consumers, and we believe this shift is going to continue.”

Harrison says the alternative dairy industry is now valued at over $2 billion in North America.

In the four years since Harrison and Bayne met at the incubator, countless versions of the beverage have been created, a number of which were taken out for testing with large groups of consumers. The main tests took place in two waves: the first led to the conclusion that protein was breaking too strongly through the flavor matrix, thus causing consumers in the trials to report a slightly bitter taste.

“Protein doesn’t taste good,” says Bayne, “so you have to mask it and we spent three months getting that right.”

The next wave of testers liked the taste but said they would prefer the product to possess a little more body, “so we dialed up the texture to replicate a 1% or 2% milk,” says Bayne.

One might wonder how a vegetable-based drink manages its slightly off-white color. Bayne credits ingredients such as potatoes, organic potato starch, tapioca and a white-yellow pea sourced from Belgium for the milk-like hue. “It is not an artificial colour,” he points out emphatically, adding that genetically modified, or GMO, ingredients are similarly banned from the Veggemo recipe.

With the product perfected, the fourth quarter of 2015 was chosen for the start of an aggressive yet prudent roll-out.

“There are two things you measure in this business, and the first is distribution,” explains Harrison.

“We had set out to be in 450 stores at the end of the first quarter of 2016 and it appears the number is going to be closer to 800.”

Six months from the beginning of product roll-out the goal is to be in approximately 1,800 stores across Canada, including those run by several of the leading chains.

The roll-out continues in further stages to include chilled Veggemo (the first phase involves shelf-stable product, which is packaged in an environment such that the beverage remains fresh on the shelf for up to 14 months) and the addition of stores in the United States.

Looking a bit further out, Harrison says the company has its eye on the global marketplace, as North America accounts for only 18% of dairy alternative beverage sales volume worldwide. There are many attractive markets for Global Gardens to consider, he says, both for sheer size and, in some cases, high levels of lactose intolerance within the population.

A product can be fantastic, but if people don’t try it they will never know. Harrison and Bayne have already considered the appeal factor from multiple angles and have a game plan to ensure that consumers across the country find the product if not one way, then another. This, of course, drives the second metric Harrison was hinting at: sales per point of distribution, or how many units you are selling at each store.

Key to this is the brand and its character, which Bayne describes as “light-hearted, approachable and playful.”  A naturopath in Colorado that Harrison and Bayne refer to as a “guru” asserted that many healthy food choices brand in such a way as to appeal to hard-core health food consumers; because of this, however, they effectively alienate a large percentage of “average” consumers not drawn to a product branded in that fashion.

The packages for Veggemo’s three flavors – original, unsweetened and vanilla – are each different but share a common visual theme characterized by happy animals in fantasy-like nature settings. To say they stand out sitting amid rows of competitor’s containers, almost all featuring a white beverage splashing into a glass or cereal bowl, is an understatement.

Then there is in-store product demonstration, which begins this month.

“We will be doing product tastings at about 1,000 stores so that shoppers can come and try Veggemo before they make a purchasing decision,” says Bayne.

Prices for Veggemo, which at first will be offered only in the 946ml size, will differ from region to region and by retailer, but the company’s suggested retail price is $3.49. This is in the middle of the category and at a level that leaves a very nice margin both for the retailer and for Global Gardens, and the company’s margin can be expected to climb in later years as economies of scale and other efficiencies take root.

Research indicates that a consumer making a health and wellness purchase decision tends to be less price sensitive than an average consumer, and because Veggemo is so innovative it is essentially creating a new segment of non-dairy beverages. Indeed, at the recent Grocery Innovations Canada show, Veggemo was chosen as one of the 10 most innovative products, which is quite an accomplishment given that there were some 300 products at the show.

While one eye will always be on profit, Harrison understands that execution of the business plan is the most important thing as the company begins to establish the brand.

“The gross margin is great and the selling price is great, but it is really about the management team, the category growth and how we have positioned this product,” he explains. “We have a point of differentiation that is research-based and are selling an everyday consumer good resistant to recession.”

Investors seem to share Harrison’s belief. When the company went out to raise capital in the second quarter of this year, its target was $2.5 million. It ended up with $4.3 million.

A commitment to running lean and mean should help to make those funds stretch a long way. A team of just five people has brought the company to its current state, with an aversion to owning fixed assets serving to keep costs mostly on the variable side of the ledger. “We are a company that fits the times,” says Harrison. “Who wants to own fixed assets and a factory with lots of people when there are groups whose business it is to do that?”

Going onto shelves in the likes of Walmart, Save-On-Foods, IGA Market Place, Calgary Coop, Metro Quebec, Thrifty Foods and London Drugs there is bound to be at least one retailer close to most people in Canada carrying Veggemo no later than April. Try it. You might like it, and if you do…you can have as much as you want.

Learn more about Global Gardens Group Inc at http://globalgardensgroup.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/global-gardens-group-inc

CSE Issuer Stories, CSE Quarterly

Golden Leaf shows way for public marijuana companies with strategy timed to perfection

This story was originally published at www.proactiveinvestors.com on December 9, 2015 and featured in The CSE Quarterly.

The rush of junior public companies into the marijuana space over the past couple of years has been fast and furious as laws regulating the drug’s use changed in Canada and some US states.

Despite the best of intentions, many of these companies have not fared well, though in fairness regulatory hang-ups undermined momentum for those focused on operating in Canada.

Golden Leaf Holdings (CSE:GLH) chose a decidedly different path by positioning itself to take advantage of regulatory change in states on the US west coast. It turned out to be a shrewd move, as the company has gone from strength to strength literally since day one.

Golden Leaf was established in May 2014 and in the one-and-a-half years since has succeeded in growing sales to over US$1 million per month. Oregon has proven to be the perfect jurisdiction for its operations, with the company having been able to legally sell its refined marijuana oil products to medical marijuana users since inception.

Recreational use was legalized in Oregon on October 1 of this year, but the only products that can be purchased through approved dispensaries at the moment are dried leaves and buds. Golden Leaf chief executive officer (CEO) Don Robinson anticipates that the second half of 2016 will bring permission for dispensaries to sell oils and edibles to recreational users, a move that would expand the market for Golden Leaf’s products by leaps and bounds.

All Golden Leaf products are based on the extraction and refining of oil from marijuana plants. The oil is sold in a variety of delivery systems, including vaporizers and edible products, the latter slated for introduction late in the current quarter or early in 2016.

“Our business model is built around the lowest cost production of the highest quality oils, based on competitive advantage, economies of scale and intellectual property,” explains Robinson.

“We think we have a different approach to the industry than other companies.”

Well-funded (the company raised a total of US$17 million in two financing rounds prior to going public on October 14 of this year) and with a strong team, Golden Leaf has proven its ability to move quickly when opportunities present themselves.

“We believe we are the biggest extractor in all of North America – we don’t know anyone bigger,” says Robinson in describing the company’s market position.

“Our growth has been explosive, from $150,000 in revenue in September 2014 to over $1 million in April 2015. We have added equipment in the last month, and by the end of this year will have doubled our output capacity and be at a monthly run rate of $2.5 million.”

Robinson explains that the company has been able to sell all of the product it makes, and that further capacity will be needed once refined products become legal for sale to recreational users. So far, Golden Leaf’s sales have come entirely from the medical use market in Oregon.

Right next door to Oregon, of course, is Washington State, where the market is twice the size of Oregon’s.

“When you put Washington and Oregon together, you are looking at a combined market of US$2.5 billion, and almost 1.4 million consumers,” says Robinson.

Keeping up with demand will require significant capital spending. “Capex for us,” explains Robinson, “is all about acquiring more machines. Each machine is close to $300,000 dollars with a two-month payback. We had three machines and added two over the summer, and by the end of the year will have 11. With each extractor you need support and auxiliary equipment because you extract with one machine and refine with another. That is the bulk of our capital spending.”

Funds have also been used to enable production of marijuana itself. “We are attempting to grow all of the feedstock for our extraction process and the reason we want to be self-reliant on feedstock is we believe it is important to be organic. You also get a better quality of feedstock if you do it yourself as opposed to buying it on the open market, where it is inconsistent.”

That claim was borne out in a November 18 press release from the company giving quality control through in-house production part of the credit for extraction yields reaching 14%, up 50% from the year-to-date average to the highest level ever experienced by the company.

From a structural perspective, part of that credit belongs to a Golden Leaf subsidiary in Israel called Green Point Science, which conducts research and development work.

“Everything that happens in Israel with cannabis is best practice,” explains Robinson. ”They have been experimenting with cannabis since the early 1970s and we are adopting their best practice in growing, breeding and greenhouse operations. In a perfect world, we would have our own strain optimized for extraction that would grow faster, with less light, less water and more disease resistance, and therefore be organic.”

Golden Leaf has grown at breakneck speed so far and with recreational use of oils in Oregon seemingly on the horizon, demand looks like something the company may never have to worry about. Still, it is hardly a bad thing that ongoing regulatory change in other parts of the country, and even nationally, will likely to add to its demand prospects.

“Four states and Washington DC are legal medically and recreationally, the states being Alaska, Colorado, Washington, and Oregon,” says Robinson. “In addition, 23 states are in some form of decriminalization.”

Then there is the national front. “The Obama administration took a big step earlier this summer and now allows research into medical marijuana,” Robinson explains.

“Up to now it has been illegal so claims as to the efficacy of marijuana from a medical standpoint are all anecdotal. Once medical studies start coming in that prove efficacy in a formal way, you will see a sea change.”

Getting back to the principle of positioning for change before it happens, Robinson points to the strength of his team and says that when it comes to management, “we have invested ahead.”

It is all about striking the right balance, mixing team members with years of experience in various aspects of the marijuana industry with executives from outside the space who bring branding and other valuable skills.

“This is going to be a very big business and we believe it requires the best of big business practice applied to cannabis,” says Robinson. “It is that marriage of talent plus ready access to capital that will enable us to continue taking advantage of opportunities as they come our way.”

Learn more about Golden Leaf Holdings at http://goldenleafholdings.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/golden-leaf-holdings-ltd

CSE Issuer Stories, CSE Quarterly

Laguna Blends – Combines Unique Product, Technology Edge to Put Own Spin on Network Marketing

This story was originally published at www.proactiveinvestors.com on May 25, 2016 and featured in The CSE Quarterly.

Technology companies are renowned for their rapid growth rates, but apparently even they can’t keep up to successful groups in a tried-and-true business that many of us are in contact with all the time.

Network marketing, also known as multi-level-marketing (MLM), is the practice of individual direct sales coupled with recruitment of new direct sellers by existing salespeople.  If you are thinking Amway, you’re on the right track.  With some 3 million salespeople worldwide, Amway is the MLM king, recording US $9.5 billion in sales in 2015.  Avon (NYSE:AVP) and Herbalife(NYSE:HLF) are among other big MLM names.

Laguna Blends (CSE:LAG) is the latest entry onto the MLM scene and the potential to go from zero to 100 overnight was one of the key factors that convinced its founder to go all in.  “I have put over $1 million of my own capital into the company,” says Stuart Gray, Laguna’s CEO.  “Successful MLM groups grow faster than tech companies so one of the nice things about Laguna is that we have the ability to get bigger really quickly.”

Laguna began its sales quest in March focused on the nutritional and health benefits of products containing hemp.  Hemp is known for being rich in protein, as well as omega fatty acids 3, 6 and 9, plus magnesium and other nutrients important to a balanced diet.  Gray summarizes the product category as “functional beverages” given that a hemp-infused instant coffee and four flavours of a sports drink mix called Pro 369 (after the omegas) comprise the initial product line.

Gray originally learned about the benefits of hemp as a consultant to several companies in the medical marijuana industry.  But while the health benefits of hemp strains used for food, as opposed to intoxication, were obvious, he felt that the approach to selling these products could be improved upon.

“We see hemp-based products on the shelves at many of the biggest food retailing names in the world, but in some cases the product has not sold through as well as the producers thought it would,” says Gray.  “There remains a lot of education that needs to take place as to the true value of hemp, so we chose direct marketing because it enables potential customers to really learn about what they are buying.”

Gray understands that MLM is an ultra-competitive universe and as such is relying on more than just unique products to set Laguna apart.  “We are definitely differentiating ourselves by pioneering hemp-based products that nobody else has,” explains Gray.  “But really, how we separate ourselves is through technology.  We have virtual 3D technology that replaces the need to go to hotel meetings to learn how to recruit.  Everything you need to build your business is on there.”

The objective of a company such as Laguna is to provide products, infrastructure, support and training for independent affiliates, he explains, whose role it is to then go out and build the business through sales and recruitment.

Gray says the combination of unique product and what might be the industry’s only 3D training and administration platform enabled the company to grow its affiliate network from zero at the beginning of March to 700 members in Canada and the US less than one month later.  “We have proven that we can do this,” he says.

It is not only affiliates that Gray has been able to attract to Laguna.  In early May the company announced that Ray Grimm had agreed to come on as president.  Grimm has some 25 years of experience in direct sales of weight loss and nutritional products, and is credited with leading three companies in the space to north of $50 million in sales in their first five years.

“Ray is considered a legend in this industry and he told me we have not only great products, but the best technology he has ever seen,” says Gray.  “I really think that if you look at digital disruption, we are one of those companies that changes the game.”

Another key member of the team is Stuart Kawasaki, president of wholly owned subsidiary Laguna Blends USA, who has been in network marketing since 1988.   “One of the companies he was a consultant with early on did $1 million of sales in its first year, $15 million in the second, and by year five was over $300 million,” explains Gray.

Experience is deep on the technology side as well, with Martin Carleton and Charles Carleton – early contractors to the team that built Skype – overseeing technology for Laguna Blends.  Martin also sits on Laguna’s board of directors.

The company has inventory ready to go with a retail value of about $1.65 million, so at a 40% payout on sales to its affiliates, Laguna looks set to generate good numbers as product begins to make its way out of the warehouse.

With proven management in place and product straining at the gate, Gray anticipates meaningful levels of revenue are just around the corner, following in virtual lockstep with expansion of the associate network.  “It is no different than when a stockbroker goes to a new firm, his clients follow him,” says Gray.  “If you are an MLM leader and you move, some of your people follow you.”

Given the company’s technology leanings, social media is also proving to be a worthwhile recruiting tool.  “With Laguna having the leading technology, a lot of people found us through social media,” explains Gray.  “I ask newcomers who they were referred by, because we always want to make sure that the affiliate gets credit, but in many cases they just found out through an article or a video.  MLM can now even spread through networks where people e-mail their base a video or put it on social media and it goes viral.”

Not on that dangerous edge where you are re-inventing the wheel, nor on the lost-in-the-crowd track of doing the same thing as everyone else, Laguna Blends has apparently positioned itself in something of a sweet spot by introducing modern tools and unique products to an established industry.  With an experienced executive team in place and sales underway, the company and its investors will soon find out just how many tech companies Laguna can leave in the rear view mirror.

Learn more about Laguna Blends Inc. at http://www.lagunablends.ca/your-company and on the CSE website at http://thecse.com/en/listings/diversified-industries/laguna-blends-inc

CSE Issuer Stories, CSE Quarterly

VirtualArmor – advanced network and cybersecurity

This story was originally published at www.proactiveinvestors.com on May 26, 2016 and featured in The CSE Quarterly.

VirtualArmor debuted on the CSE in November of last year at $0.25.  It sat quietly for its first couple of months before starting to build a following that has since seen the stock close as high as $0.75 (a 200% gain), and more recently at $0.65 (up 160%).

A basic analysis of the company yields some familiar themes, including experienced management and rapid growth underscored by hard-won advantages in a large, fast-growing market.

Founder and Chairman Christopher Blisard explains the challenges facing every entity with a presence on the Internet, and thereby the opportunity for VirtualArmor, in a manner hard to dispute.  “Where we are going as a world is that everything is being moved to the edge,” Blisard explains.  “You as a consumer or business want everything available all the time at any location.  We’ll continue to grow because technology is pushing the boundaries of where data is stored and those areas can become very vulnerable very quickly.  You really have no choice but to call companies like ours to take care of your problems.”

Established in 2001, VirtualArmor has crafted a business model over the years that Blisard says literally has no peer within the industry.  It involves working closely with hardware manufacturers so that the VirtualArmor team can go beyond providing a security overlay “a mile wide and an inch deep” and get inside the actual hardware, where the most talented of hackers often go to lay their traps.

“We work hand in hand with the manufacturer, plugging their software into our platform so we can go incredibly deep into every piece of equipment we are managing on your network.  It is not just a reactive environment at that point, but also a proactive environment.”

When VirtualArmor discusses security with a potential client, it insists on bringing the hardware that will serve as the backbone of the entity’s computer network.  Instead of trying to fix the myriad bugs inherent in a system that should have been designed better in the first place, VirtualArmor brings in what it knows will work.

Looking at the financial picture, accrual earnings were skewed in 2015 by non-cash items related to the go-public effort, but cash flow was positive for the year, and that’s the number that really counts.  Fiscal 2016 should be more indicative, and thus far is shaping up nicely.  The company announced on March 8 that it had booked US $2.4 million in sales in the previous 90 days.  Given that revenue for full-year 2015 was US $7.4 million, VirtualArmor is so far on pace to beat handily year on year.

Matthew Brennan, Vice President of Sales, points to the importance of convincing investors that growth in revenue and earnings is sustainable.  “When you have an organization as successful as ours and all of that revenue came from two salespeople, to know we are going to end the year at between six and eight salespeople suggests you will see things move in a positive direction,” he says.

Blisard adds that part of the benefit of listing on the CSE has been to broaden the understanding of VirtualArmor and give it new tools to conduct the full extent of the expansion it envisions.  “Looking at 2016 to 2017, the objective will be to expand our reach internationally,” he says.  “That includes going into Canada and Europe, and particularly the London market.”  Blisard goes on to explain that the company has a 10-person Security Operations Center, or SOC, just outside of London that can play a very helpful role in landing and serving local customers.

The revenue outlook is further enhanced by the stickiness of the client base, which is actually very easy to assess: “We have never lost a managed services customer and our longest one has been with us for 10 years,” says Blisard.

Also helping the share price was the announcement March 16 that the company was cancelling just under 3 million of its shares outstanding, and that several third-party shareholders had agreed to put a total of 3 million shares into escrow.  The resulting reduction in dilution, not to mention clear vote of confidence, set a positive tone that the stock price responded to immediately.

Blisard is happy with the way the stock has performed to date but points out that he knows education is a process and that it will take time for the company to build the following it thinks it ultimately deserves.

“For the Canadian markets a company like this is unique,” Blisard explains.  “The investment community understands the importance of cybersecurity in their lives.  The people we talk to understand the way our company is structured, how it drives revenue, how it drives profit, and where it sits within the cybersecurity world.”

Concludes Brennan, “It is very important that an investor understands there is a roadmap.  We made a good decision in not growing too quickly, taking our proceeds and placing smart bets on particular territories and hiring the right people.  I think it is key that the investment community understands this.”

Learn more about VritualArmor International Inc. at http://www.virtualarmor.com/ and on the CSE website at http://thecse.com/en/listings/technology/virtualarmor-international-inc

CSE Issuer Stories, CSE Quarterly

Pudo – Pick it up. Drop it off.

This story was originally published at www.proactiveinvestors.com on May 26, 2016 and featured in The CSE Quarterly.

PUDO Inc. debuted on the CSE on July 28, 2015 at $0.70, proceeded to drop to $0.18, yet within two weeks was conducting a private placement of 1.1 million shares at $0.63.  Using that as a reference price, the stock has closed up as much as 443%, and as of publication date is up a still respectable 280%.

“While you are out and about, we’re here accepting your deliveries” reads the tagline on the company’s website, and that pretty much captures the essence of the PUDO service.  We all know how frustrating it is to be waiting for a package, only to arrive home and find that someone tried to deliver it, but unable to do so left a sticky message indicating that you cannot obtain your parcel until the following day.  Even more annoying is learning that the package had been delivered, only to be stolen off the front stoop.

PUDO completely eliminates this inefficiency by creating locations called PUDO Points where customers can specify their parcels be dropped off so as to be picked up at their convenience.

The benefits to all participants in a transaction run deeper than that, but at its core the service makes life more convenient for consumers.  It is the simplicity and connection to all of us that PUDO CEO Frank Coccia believes is behind the impressive performance by the company’s shares in the short time the company has been public.

“It is a story that everyone understands,” says Coccia.  “It is not a biotech company or mining exploration where it can be difficult to see the real potential.  I enjoy going out and speaking with investors.   They see that couriers, retailers and consumers can have a field day with this.”

Digging a little deeper, one learns why the concept would have more natural allies than competitors.  Coccia explains that PUDO seeks nothing more than to provide pick-up points inside convenience stores and other established physical locations.

Couriers thus know they have a guaranteed delivery and save money by not having to attempt re-deliveries after a failed visit.  Retailers that ship product to fulfill customer orders gain flexibility to negotiate with multiple couriers and thereby reduce their shipping costs.  The consumer gains the peace of mind that comes with knowing a parcel is available to pick up at a convenient location whenever they like.  Convenience stores and other PUDO Points not only earn fees for holding and putting parcels in the hands of their owners, but also from impulse buys thanks to the extra foot traffic.

Coccia says that investors also like the fact that PUDO keeps its costs under control by needing little more than to maintain and support the technology behind the service.  “The beauty of PUDO is that we don’t own anything outside the technology,” explains Coccia.  “The bricks and mortar is already there.  We are just taking advantage of the elements in an ecosystem that already exists.”

Growth on the ground has been quick to date, with Coccia saying that the company has already established some 800 PUDO Points in Canada and the US and over 6,000 registered locations, this latter category being locations signed up that have yet to go through training so they are fully ready to roll.

“Once we hit 3,500 to 4,000 locations in Canada then we should be exactly where we want to be,” Coccia says.  “In the US we have over 3,700 registered locations at present and ultimately want 16,000 to 20,000.  Once we reach those two numbers we will have a fixed cost with a control centre that manages everything.”

Experience helps small companies avoid costly mistakes, and fortunately for PUDO Coccia has been at this for 35 years.  “I built niche courier systems, which basically are courier systems for one industry.  We did it for the travel industry and the financial services sector and for lawyers serving one another documents and papers.  It is all about consolidation where people can pick up mail and drop off their mail.”

Coccia expects growth to continue apace, thanks in part to several potential partners he is talking to in the US.  “We’d suddenly have a network in the US that could rival that of any national carrier – UPS or even the post office,” he says.

With just 15.6 million shares outstanding, PUDO has plenty of room to maneuver if Coccia deems it necessary to raise equity capital for supporting growth.  And while the company is not flush with cash, liabilities are fairly low as well, so with revenue beginning to come in Coccia has a good shot at preserving a nice share structure until PUDO reaches the point at which it becomes self-funding.

Experienced management, enviable share structure, rapid growth, consistent communication.  Does that qualify as a formula?

Learn more about Pudo Inc at http://www.pudoinc.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/pudo-inc

CSE Issuer Stories, CSE Quarterly

Urbana’s mix of private and public holdings beats street, appeals to deep value investors

This story was originally published at www.proactiveinvestors.com on May 26, 2016 and featured in The CSE Quarterly.

One would think that with a track record like Urbana Corporation’s (CSE:URB; TSE:URB) the chance to buy its shares at a discount would be almost non-existent. At an annual return based on net asset value exceeding 14% since it was launched in 2002, Urbana easily ranks as one of the better performing investment companies on the block.

Puzzling then that its stock is priced around $1.97, while its per-share net asset value is closer to $3.50. “Since October 2002 the rate of growth has been just under 14.54% but the share price is at a significant discount to the asset value, to an extent due to lack of coverage,” explains Thomas Caldwell, Urbana’s President and CEO.

Caldwell, of course, is also Chairman of investment dealer Caldwell Securities Ltd. He is well known on Bay Street and Wall Street for making big returns from investing in stock exchanges. “At one point we owned 37 exchanges,” Caldwell notes.

That legacy remains a major part of the Urbana investment approach, reflected these days more so in the heavy portfolio weighting in companies involved with the financial industry, be they major banks or service providers to the mortgage business. “That is where I spent most of my career and is an area we like to think we understand,” Caldwell says.

In many ways, Urbana is structured to offer investors the best of all worlds. It has just shy of $200 million under management, about 55% in public investments, plus 45% in private investments that its shareholders would almost certainly be otherwise unable to access.

Another benefit is that the closed-end nature of the fund is a perfect fit for Caldwell’s investment strategy. “A closed-end investment corporation like Urbana is a great way to manage money because the capital we have is permanent,” he explains. “The problem with mutual funds is that you get your money at the worst time – at the top of markets – and you lose it at the best time – at the bottom of markets. But that is when you should be doing the opposite – you should be selling at the top and buying at the bottom. If a market is going down I am not worried about a run-off of assets and that’s where I make our money. I’m a bargain hunter.”

Well-represented sectors these days include US financials, which Caldwell says make up 32% of the portfolio, while a recent move into a set of holdings he calls “Canada Inc.” saw Urbana take meaningful positions in Barrick Gold (TSE:ABX), Suncor Energy (TSE:SU) and Teck Resources (TSE:TCK.B). “Our Canadian banks are up 10%, Suncor is up a few percent, and Teck is up 100%,” Caldwell explains.

One of the CEO’s favourite holdings is a private company called Real Matters. Real Matters runs a technology platform and network of more than 100,000 independent field agents that help financial institutions and other entities in the real estate business perform appraisals, insurance inspections, title searches and mortgage closings. Its customers include 60 of the top 100 mortgage lenders in the US and a number of large insurance companies.

“Real Matters is run by an extremely bright executive named Jason Smith,” says Caldwell, noting that he invited the Real Matters President and CEO to speak at Urbana’s annual general meeting this year. “I say now that I am not interested in ideas anymore. I am only interested in people who can execute on ideas. He can do that.”

Caldwell sees Real Matters eventually listing in the public realm via an IPO, a path that Urbana likes its private investments to move along as they grow and mature.

Another successful holding on the private side that anyone who follows Urbana will be aware of is the Canadian Securities Exchange, in which the investment company holds a major stake. Caldwell also serves as the exchange’s Chairman.

“The CSE fills a role that I believe, and my directors and partners believe, is important to Canada,” explains Caldwell. “Canada is an entrepreneurial country but it is very hard to build a company here because we are losing a lot of independent dealers and don’t have the big venture pools like they have in Silicon Valley. So what the CSE can do as an exchange is to simplify the role of accessing capital.

“Ned Goodman (Deputy Chairman of the CSE and founder of Dundee Corporation – a significant shareholder in the CSE) and I both say the same thing – we feel the CSE is an extremely important link in Canada’s prosperity going forward. We pursue this with almost religious fervor because both Ned and I feel so strongly in terms of helping Canadians. Remember, the large financial institutions and many of the resource companies are going to be generators of unemployment in the years to come. New jobs and head offices are only going to come from new enterprise. That’s where the CSE lives and that’s what we try to nurture.”

Fervour certainly is an apt word to describe the way Caldwell feels about the industry he has built his life around, and it troubles him to see certain pillars of the financial community struggling so mightily. “Independent brokerage firms are being massacred and that is going to impact Canada’s standard of living, the number of head offices and new companies,” he explains. “It is a difficult environment right now for new companies trying to raise money. Regulators don’t see that they are addicted to evermore regulation and the damage they are doing to the economy.”

Asked about the possibility of Urbana seeing this as an opportunity, Caldwell suggests he needs to know more. “I’d love to sit down with regulators at some point and find out what their intention is. If they are planning to wipe out an industry, which it appears they are, then naturally I would not be doing bargain hunting in it.”

In the end, he suspects the over-regulation he witnesses does not even achieve its intended objective. “Quite often in an onerous environment the people who will work hard to jump through the hoops are the ones with the more speculative deals. So it does not even mean that you are thinning the ranks of the villains because those are the ones that will bend the rules.”

Regulation run rampant is an issue Caldwell sees as a threat to the Canadian economy but, paradoxically perhaps, he sees strict regulation of the financial industry in the US creating an investment opportunity. “There has been tremendous regulatory pressure on US banks and it is the shareholders who suffer,” says Caldwell. “Our feeling is that they will have to ease up, which would be good for the banks. If they don’t then US banks may unilaterally break themselves back up into commercial and investment banks, which I think would also be good for the stocks. If history has shown us anything it is that when you break up a company, the parts are usually worth more than the whole.”

With the discount to net asset value at Urbana so significant, it makes sense to use a portion of the corporation’s capital to buy back its own shares. “We have been very aggressive buying back stock and cancelling it,” says Caldwell. “We have bought back about 37 million shares at a discount, and this has benefited the remaining shareholders.”

The buyback has doubtlessly contributed to share price stability, but there still remains a gap wide enough to present opportunity for new investors. “The great bargain right now with Urbana is that for $2.00 you get $3.50 working for you, and that $3.50 has been growing at over 14% per annum for the last 14 years. The stock price will eventually catch up with it but I think in the meantime you can get pretty good management and assets at a discount.”

Learn more about Urbana Corporation at http://www.urbanacorp.com/ and on the CSE website at http://thecse.com/en/listings/diversified-industries/urbana-corporation

CSE Issuer Stories, CSE Quarterly

Lite Access lights it up

This story was originally published at www.proactiveinvestors.com on May 26, 2016 and featured in The CSE Quarterly.

Lite Access Technologies listed on the CSE in a transaction that saw the company raise just over $1.84 million at $0.25 per share, with its first trade printing on June 1, 2015.  Since then, its stock price has closed as high as $1.80, up 620%, and at time of publication was $1.61, or 544% higher.

Lite Access could hardly have chosen a better time to go public, what with a worldwide “supercycle” in optical fibre installation by large telecoms driving growth for the company’s products and services.  And if that cycle is, as the company suggests, merely in the second inning, it is easy to understand why investors have gotten so excited about the prospects for strong, sustained earnings.

“Everyone today is touched by the digital world and realizes that high broadband speed and capacity is essential to a modern economy, economic growth and the daily lives of most consumers,” says Michael Plotnikoff, Lite Access co-founder and Chief Executive Officer.  “And as rapidly as fiber optic deployment is growing in a general sense, the micro-trenching and air-blown fibre sub-sector that Lite Access specializes in is growing faster.  We not only offer pure-play exposure to the space, but our total integrated solutions are based on both proven technologies and widely accepted installation methodologies considered to be the solution of choice for fibre-optic connectivity – that is pretty difficult to find.”

Lite Access uses specially designed proprietary equipment to create “micro-trenches” into which it places exclusive crush-proof microduct (micro-conduit) designed for all types of telecom applications, both for today’s needs and those of the future.  The microduct serves as a medium through which optical fibre is blown using compressed air to create high-speed broadband connectivity in a matter of minutes and at a cost far less than with traditional cable installation methods.

The beauty of the system, and a main factor driving demand, is the lack of interference with the local environment and archaeologically sensitive areas both during initial installation and any subsequent upgrade cycle.  As the micro-trenches are narrow, Lite Access installation teams can be in and out of a site quickly (micro-trenching and installing up to 1 metre per minute of microduct) and at a cost much lower than more disruptive conventional methods.

Later, when fibre needs to be replaced due to technological obsolescence or upgraded in support of future growth requirements, there is no need to dig up the roadway again.  Lite Access simply blows new fibre from the starting point through to its destination at the other end and, voila, there is your upgrade.  Nobody outside of the companies involved even knows it took place.

As Plotnikoff explains, Lite Access is a pioneer in the micro-trenching and air-blown fibre business, and as the industry shifts into high gear he has a proven team behind him that has successfully completed dozens of projects globally, some quite challenging from an engineering perspective and at times not possible using traditional installation methods.  Well-rounded project and management experience is serving Lite Access well from both an operations standpoint and in the market with investors.  It is one of several important boxes it has ticked.

Good people?  Check.  And that includes over a dozen partners around the world certified to install microduct and handle air-blown optical fibre installation.  These partners will contribute to a re-balancing of the revenue stream in future years as they collectively come to install more of Lite Access’s patented equipment and supplies than the company does itself.

Good financial management?  Check that box, too.  Lite Access has just 30.6 million shares outstanding and no financing has been conducted since the initial $0.25 round.  A corporate update released February 1 explained that milestone payments had been received on a $7 million project for BC’s Haida Gwaii community, plus there was over $1 million in receivables and inventory on the most recent balance sheet.

Another key point to note is that with the types of customers Lite Access has – which include cities and municipalities, First Nations and Native Americans, as well as private enterprise and local governments – odds are the company rarely, if ever, finds itself chasing anyone for payment.

Plotnikoff speaks warmly about shareholders he has interacted with over the past year, saying some have essentially become advocates for the brand, helping build awareness and even calling in with business opportunities.  Shareholders are welcome to visit the company’s headquarters and main warehouse in Richmond, British Columbia, if that level of contact is important to them.

“Our shareholders are comfortable because they have an open line of communication and clear, transparent access to information,” explains Plotnikoff.  “I like to think that if we preserve that approach as a principal component of our corporate culture and continue to deliver growth, we will always have a strong degree of support in the market.”

Learn more about Lite Access Technologies Inc. at http://liteaccess.com/ and on the CSE website at http://thecse.com/en/listings/technology/lite-access-technologies-inc

CSE Issuer Stories, CSE Quarterly

MGX Minerals thinks outside the box in pursuit of grand goal

This story was originally published at www.proactiveinvestors.com on March 1, 2016 and featured in The CSE Quarterly.

The stated goal of MGX Minerals (CSE:XMG) – to put seven to ten mines into production over the next decade – is as ambitious as they come.

But speaking to the company’s CEO, Jared Lazerson, a philosophy begins to show itself that is different than that typically followed within Canada’s junior mining community.　It is certainly one that fits the company’s objective.

MGX does not embrace an exploration model aimed at defining an ever-expanding resource, but rather a more standard business model with near-term profit as its core objective.  Thus the vision of bringing multiple mines on-stream, and doing so as quickly as possible.  Or what Lazerson refers to as a “right into production model.”

The first property scheduled for production is Driftwood Creek, a 776 hectare magnesium project located in the East Kootenay region of British Columbia.

Magnesium is a mineral most people have heard of but few probably know what makes it useful.

In different forms, magnesium can do everything from strengthening steel to fortifying vitamins, and is also used for wastewater treatment.

Lazerson believes magnesium oxide (what the magnesite at Driftwood Creek would become after beneficiation and secondary processing) is suited to yet another application which is still emerging but could grow to be huge.

“One of the potential game changers in the magnesium oxide market is that it can be used as a replacement for gypsum in drywall,” Lazerson explains.  “There is in Asia very heavily produced magnesium oxide wallboard and this is a market we are moving on quickly.”

He goes on to explain that wallboard out of China is characterized by “a wide variety of qualities,” which means there is opportunity for a company with a reliable source of high-quality magnesium oxide to address North American demand for wallboard.

“It is being used in high-rise buildings and also in Florida and other areas where flooding is common,” says Lazerson, explaining that drywall containing magnesium oxide has parallels to cement products, absorbing some moisture but not losing its structural integrity when it dries out.

“In terms of where the massive growth in market demand for the commodity is, we are betting on that,” he says.

Magnesium alloy is a different story and, for the time being, not something MGX wants to target.

Like various other commodities, magnesium alloy’s is a market somewhat controlled by large players and governments.  Lazerson explains that the US maintains high tariffs to discourage Chinese and Russian imports, leaving the country with the highest magnesium alloy prices in the world.  “You have one market that is fantastic and then the rest of the world is reasonably priced.  It fits more into that space where there is sufficient supply globally to support demand.”

With the end user equation seemingly figured out, the question of what hurdles are left to clear before reaching commercialization at Driftwood Creek is an obvious one.  MGX announced in January of this year that a mining lease had been awarded for the project by the province. Separately, it received a permit to conduct bulk sampling of 100 tonnes of material at the site in the fourth quarter of last year.  Its road permit came around the same time.

“In terms of getting stakeholder sign-off – government, First Nations, local community – the mining lease required everybody to sign off, so that is a big step in terms of not running up against any major delays,” says Lazerson.

The bulk sample, he explains, “will allow us to put some hard economics to it – we will see really what it is and what it costs to operate in a true mining environment.”

Major steps to go include construction, meeting capital requirements, environmental permitting, and then obtaining the actual mining permit.  Anyone who knows anything about mining understands that while that might be a short list, the timeframe to check all the boxes is almost always tremendously long.

But Driftwood Creek has a major advantage in that production will not result in any tailings to speak of.  “We don’t have any tailings – we will essentially sell 99.8% of our product,” says Lazerson, adding that “our permitting will be tied largely to showing the public and government and other stakeholders that there are no tailings issues.”

If all goes according to plan, the mine could be in production before the end of 2016.

Looking beyond Driftwood Creek, MGX recently entered a purchase agreement to acquire a 100% interest in 96,000 hectares of property in Alberta.  The land package contains multiple oil and gas wells that the company says contain brines rich in lithium, potassium and magnesium.  It comprises six permits and six permit applications.

Like Driftwood Creek, the Alberta properties reflect an approach of acquiring projects with fairly well outlined deposits that can be put into production for initial outlays of no more than $50 million.

Lazerson explains that lithium, similar to magnesium, is a fit for the company mandate: “industrial minerals, Western Canada, low barriers to entry, low capex.

“We are going back into existing oil fields that are essentially barren.  You are at a 98% water to oil ratio, so there is some oil in there, but it is nominal compared to the level of brine.”

Risk management is another theme that runs throughout a discussion with Lazerson.

In discussing MGX’s commitment to operating in Western Canada he references his team at length.  “Everybody on the ground in terms of geology and engineering has done a tremendous amount of work in Western Canada and I can’t overstate how important an understanding of the local geology, community and infrastructure is – these are what allow　us to do things relatively inexpensively, but more importantly than anything, quickly.

“That’s what maybe sets us apart about the way we do business.  We consider time as the most expensive thing, and really the enemy of all that we do.”

Another pillar of the MGX strategy is a focus on industrial minerals with “a small footprint,” the reason being, according to Lazerson, that these types of projects tend to require smaller amounts of capital to put into production.  Driftwood Creek is a good example, and because it is a magnesium oxide resource there should be minimal environmental impact at the mine or in the processing.

Implied, if not directly stated, in all of this is the vision of establishing MGX as a company that walks the walk, if you will.  A company that gets mines up and running efficiently and makes money.  Once that track record has been established, attracting new projects and financing, not to mention all the other tasks that need taking care of in order to accomplish corporate objectives in this incredibly challenging business, would become that much easier.  Ambitious to be sure, but worth the effort.

Learn more about MGX Minerals at http://www.mgxminerals.com/ and on the CSE website at http://thecse.com/en/listings/mining/mgx-minerals-inc

CSE Issuer Stories, CSE Quarterly

Western Uranium blends big resource base, new technology in low-cost model

This story originally was published at www.proactiveinvestors.com on February 23, 2016 and featured in The CSE Quarterly.

Two things make Western Uranium (CSE:WUC) stand out from the junior mining pack: size and technology.

The first is straightforward enough. Western Uranium is the second largest holder of uranium resources in the United States, according to chief executive George Glasier.

The largest holder is Energy Fuels (NYSE MKT:UUUU), a company to which Western Uranium has close connections.

“We acquired our base assets from Energy Fuels in August 2014,” says Glasier, so there’s one connection. There’s also the small matter of Glasier having founded Energy Fuels himself.

So if there’s a man who knows his US uranium, it’s Glasier. And the company he’s now proceeding to build is a clear reflection of that.

A lot has been achieved in a short time.

At the time of the acquisition from Energy Fuels, Western Uranium was private. But shortly after that, in December 2014, it listed publicly on the Canadian Securities Exchange.

And following on from there Western Uranium acquired Australian company Black Range Minerals in a 1-for-750 all-share deal.

The entity thus created now controls a total resource base of upwards of 100 million pounds of uranium and 35 million pounds of vanadium across two of the key US uranium mining states, Utah and Colorado.

It was the acquisition of the seven permitted uranium mines that came with Black Range that catapulted Western Uranium into the number two slot behind Energy Fuels.

But there was more to that deal than just building scale.

Because it was with Black Range that Western Uranium acquired the second factor that gives it the edge over its junior peers: technology.

New technology in mining can be a mixed blessing, as anyone who’s followed the trials and tribulations of investing in nickel laterite processing can testify.

In uranium, certain types of deposit are amenable to leaching in-situ, which cuts down considerably on waste and completely does away with the need for tailings facilities.

Black Range’s technology doesn’t quite do that, but the effects and benefits are comparable.

It’s called “ablation”, a term borrowed from the medical profession, and it was originally developed by metallurgists looking to apply it to refractory gold deposits.

That didn’t work, but the same metallurgists then applied the technology to sandstone-hosted uranium deposits and the results were a whole lot better.

“Ablation causes a collision between sand grain particles,” says Glasier. “It removes the uranium coating and leaves a clear particle. That means it can leave up to 80% of the rock at the mine site.”

Perhaps even more significant in this environmentally conscious age, it’s a completely physical process and doesn’t involve any chemicals. Thus, the use of sulphuric acid in the milling process at a uranium mill can be significantly reduced. “It should substantially reduce the cost of producing uranium from our mines,” says Glasier.

So, with the two arms of the company – the resource base and the technology – in place, the next trick will be to find the finances to initiate production.

To that end, Glasier is about to embark on an extended roadshow that will encompass the US, Canada and Europe.

The thinking is that it will take approximately US$3million to get mining operations at the Sunday complex in Colorado into production while building the required additional ablation production units (‘ABT Units’), addressing the additional permitting costs of the State of Colorado for use of the ABT Units in the mining process and to retire the remaining debt.

That money will probably be raised through equity.

At the same time though, the company will also be working on putting together a US$35 million debt package to allow for the construction of a mill at a site already permitted at Pinon Ridge in south-western Colorado. The permitted mill site is currently owned by Pinon Ridge Mining Inc., an affiliate of the Company with common ownership interests of the principles of Western.

Ultimately, says Glasier, the plan is to produce upwards of 3 million pounds of uranium per year, and at very low cost.

Why so low? The first answer to that is the ablation technology, which is patented and tested. The second is that Western Uranium’s tenements also allow for a substantial vanadium credit to be applied in any economic model that gets built.

All told, Glasier reckons that Western Uranium will go into the lowest 10% of the cost quartile, which is welcome given that the uranium price has been relatively depressed of late.

Indeed, that weaker uranium price is the reason why the seven mines that Western Uranium acquired from Energy Fuels ceased production back in 2009. Other than the naked economics, they are ready to go.

But will the uranium price improve?

Longer-term, there’s plenty to be optimistic about. China is building nuclear reactors at a rate of knots. And Russia too is set to add significant new nuclear capacity, although the country is also one of the main producers of uranium. It’s estimated that by 2025 the number of nuclear power reactors in the world will have risen from the current 439 to a more substantial 497.

Western Uranium itself already has one secured customer.

An off-take agreement is in the bag with one US utility and doubtless there’ll be more to come. What the pricing will be in further deals is an open question, but it was interesting to see commentary from Cameco (TSE:CCO) recently in which the uranium giant argued that a position of oversupply is likely to linger for most of this year, but that an uptick may then be likely.

If so, the timing would suit Western Uranium nicely. “By the end of the year,” says Glasier, “we’re going to get production at the Sunday mine complex.”

Work on the mill will probably be well underway too, and there will be the additional kicker of marketing the ablation technology to companies overseas. The application to sandstone-hosted uranium deposits would suit some of the more well-known African uranium deposits in particular, and could well have a significantly beneficial impact on the economics of these projects.

More immediately though, the next crucial steps will involve the financing, a listing on a US exchange, and then deployment of those funds to generate early production.

Because this is not a market in which a junior miner can afford to take its time. But George Glasier knows that.

“The company’s moving fast in a tough market,” he says. “We are a low-cost and near-term producer.”

Learn more about Western Uranium Corporation at http://western-uranium.com/ and on the CSE website at http://thecse.com/en/listings/mining/western-uranium-corporation