Tag Archives: cse issuer stories

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

Supreme Pharmaceuticals Inc shapes medical marijuana strategy around Canada

This story was originally published at www.proactiveinvestors.com on May 18, 2016 and featured in The CSE Quarterly.

Legalising marijuana for medical use can still be a thorny topic in some countries.

But Supreme Pharmaceuticals Inc. is hoping to lead the way in harnessing its acceptance and benefits in Canada.

Supreme obtained regulatory approval to grow medical marijuana at its site in Kincardine, Ontario, in March.

The company is on track to harvest its first crop in the summer and hopes to get final approval to sell it in September or October.

In the US, four states have legalized the plant for recreational use and 12 others allow its consumption for medical purposes, although that remains a relatively small proportion of the country as a whole.

But in Canada, the medical marijuana business has legalised progressively in the last 15 years.

A key milestone came in 2014 when the government’s Health Canada arm introduced the Marijuana for Medical Purposes Regulations.

The government also said last month it will press ahead in 2017 with plans to legalise marijuana for adult recreational use.

That market is expected to be worth US$5bn a year by 2020 according to leading industry analysts.

Supreme is targeting a domestic medical market, which it expects to be worth about US$100mln by the end of this year and US$1.2bn by 2020.

Supreme’s president and chief executive, John Fowler, said he believed Canada was doing better than some other countries in overcoming concerns about using the plant for clinical purposes.

“I wouldn’t say the stigma has gone but we’re moving in the right direction,” he said.

Fowler began working in the medical marijuana sector more than 10 years ago.

He pursued a legal career to help medical marijuana patients with legal challenges relating to access, jobs and tenancies, working on major cases.

He now sees his mission as being not only to provide Canadians with access to high-quality, low-cost medical marijuana, but to work with physicians to improve their awareness and support for it.

“The hope is that the doctor will be more educated and more willing to subscribe to the company’s products,” he said.

Bottom line

Supreme and its wholly owned subsidiary, AMMCan, have set up a federally-licensed, seven-acre greenhouse in Kincardine on the shores of Lake Huron.  When fully operational, the company expects to be able to produce in excess of 50,000 KG per year.

Supreme has obtained exclusive rights to work with international seed supplier Dinafem.  The arrangement will provide Supreme with access to over 100 unique cannabis strains to put into production in the Kincardine greenhouse.

“Choosing the right genetics is one of the most important aspects of producing high quality cannabis for both medical and recreational markets,” Fowler said.

“It was important we seek out a partner like Dinafem to ensure we grow only the best genetics in our greenhouse which will maximize output, increase quality and have a direct impact on our bottom line.”

Supreme has raised more than US$10mln, three quarters of which it has spent on fitting out the greenhouse and the rest of which it still has in the bank.

It expects those reserves to sustain it until it starts earning revenue from marijuana sales later this year.

Supreme is among about 25 companies holding 31 licences to produce medical marijuana.

The current market of about 45,000 patients is increasing at a rate of about 5,000 per month and is on track to more than double in this calendar year.

Supreme’s primary aim was to supply the consumer market direct by mail order.

But it is exploring the possibility of becoming more of a business-to-business supplier of licensed marijuana to other companies that would retail it.

Fowler said: “The benefits of that are long-term, stable revenue based on supply agreements, rather than volatile revenues from retail.”

Supreme has had to take extensive security precautions at Kincardine to prevent theft, such as high fencing and cameras, and the end product is stored in a vault.

“We like to joke that our marijuana in the vault will be more secure than our money in the bank,” Fowler said.

Fowler also acknowledges the general risk of abuse of the product. However it is worth pointing out marijuana consumption is seen to be less dangerous than tobacco or alcohol with few reported side effects, he said.

Strict regulation compels the company to ensure its products are not contaminated by pesticides or other substances that may be in marijuana bought from street dealers.

Supreme has international ambitions and is eyeing opportunities in countries such as Australia, Germany and Austria.

Canberra recently legalized marijuana for medical use and Berlin and Vienna are considering doing the same.

The company believes it will be able to generate US$200mln in annual domestic revenues within the next decade.  This keeps the company’s focus on executing on its domestic business as a top priority.

Fowler said: “It’s very important to me as the chief executive that we don’t allow the prospect of new markets to in any way negatively affect our primary market, which is right here in Canada.”

Learn more about Supreme Pharmaceuticals Inc at http://www.supreme.ca/ and on the CSE website at http://thecse.com/en/listings/life-sciences/supreme-pharmaceuticals-inc

CSE Issuer Stories, CSE Quarterly

Adaptability the watchword for Pasinex Resources

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

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

The quote above is often wrongly attributed to Charles Darwin. But it does, I am told, summarise eloquently his seminal work ‘On The Origin of Species’.

It might equally be applied, in stock market terms at least, to the junior miners that have survived the recession that has decimated the industry.

Adaptability has been the watchword for Pasinex Resources (CSE:PSE), joint owner of the Pinargozu Mine in Turkey’s Adana Province.

It and local partner Akmetal set out in 2012 to compile a significant zinc resource – in the order 10 million tonnes – from claims staked around the historic Horzum Mine.

Pretty soon the cold harsh realities of life caught up with the companies, which luckily enough had a plan B to fall back on.

This was to mine high grade direct shipping quality zinc, crush it and send it off for export.

In a time where the capital markets have been shut to juniors such as Pasinex, the Pinargozu operation has provided manna from heaven – or at least a welcome source of working capital.

To date 16,000 tonnes of zinc material grading around 35% have been unearthed from this carbonate replacement-style deposit.

The extraction costs are currently around US$140-150 per tonne, while Pasinex and its partner receive “well in excess of US$200” a tonne for what they ship from Pinargozu.

With 120 people on-site, production is ramping up from 25-30 tonnes a day to around 60 tonnes.

This equates to output of around 20,000 tonnes a year. As capacity grows, so costs ought to fall.

Exploration work – the company carried out 12,000 metres of drilling last year – is aimed at finding and chasing high grade veins and delineating enough ore to keep the hoppers full.

“There was an old small-scale miner who went in and dug some high-grade zinc at very small tonnage,” says Pasinex chief executive Steve Williams, explaining how Pinargozu came into being.

“But that was clearly an indication that there was more high-grade zinc and that proved to be the case.

“We went in and started exploration and drilling. We found some very high-grade material and quickly realised there was the opportunity to get in and start mining.

“The horrible situation we have in the market and the terrible situation the exploration industry finds itself in was very much a driver for this.”

Located in the Taurus Mountains, Pinargozu is thought to be the sweet spot for a much larger zinc deposit.

In fact the area, which hasn’t been extensively explored using modern techniques, is itself a small part of a belt that extends into Iran and Afghanistan.

In a different world, one where the capital markets were open, share prices were buoyant and there was ready demand for new zinc projects, the Pasinex-Akmetal ground would have been comprehensively explored and its potential tested.

In the current environment compiling an independent resource estimate is a waste of time and money. When the wind changes Pasinex will adapt its plan of attack, says Williams.

In the meantime, it will look at methods to expand output a little further.

The commodity markets haven’t been especially kind to Pasinex. The price of zinc has come down to 77 cents per pound from around US$1.10 at its height last year.

Pasinex’s budgeting is done at 67 cents, which is more conservative than other operators out there.

But like its rivals it is operationally geared to an uptick in the price of the metal.

This could happen if the older, less economic mines continue to be shuttered. Glencore recently turn the spigots down – but then as Williams points out it could very easily push output up when the market conditions become a little more benign.

Demand for zinc might start nudging up in the latter part of 2016, but don’t bet on a recovery in the mining sector this year, says the Pasinex boss.

“Zinc I think will be one of the first metals to move; capacity is being removed.

“The [equity] markets? Well, I’m really not so confident. The big miners still have some big news to shake out. That will keep pressure on share prices.”

In Turkey foreign companies almost always take a partner. Pasinex’s Williams said he’s has had some minor differences of opinion, but the experience with Akmetal has been an “overwhelmingly positive” one.

The Turkish miner has been able to interact more astutely with the politicians than a foreign company might, while it has also been active and effective on the ground with the local population.

This expertise was used to good effect to fully permit and bring Pinargozu into production in about two years.

Practically, Akmetal had the plant and equipment needed to mine the deposit.

The country itself is caught on the fringes geographically but in the middle politically of one of the most volatile regions in the world.

Millions of Syrian refugees have flooded over the border since the hostilities began, and Turkey’s major cities are on red alert after a series of bombings.

But while Adana is near to the border, the mountain mine of Pinargozu remains isolated from what’s going on around it.

“We are in the northern part of the province so it is business as usual and we don’t see anything,” says Williams.

“But the country as a whole has been influenced by the conflict and in particular the refugee crisis.

“Turkey is a strong country, but in a difficult area of the world.”

Pasinex is an oddity on any exchange – a revenue generating mining junior that is able to survive under its own steam.

Is this recognised by the market? Definitely not at the moment. Neither is the long term potential of its zinc assets, or the copper property we haven’t even touched on.

But this is the harsh reality of life for the likes of Pasinex.

“This last three years have been very tough for us as it has for everybody,” says Williams.

“I think doing what we have been doing is the right thing for this moment in time.

“At some point we’ll get recognition for what we have done and the assets we have.”

Learn more about Pasinex at http://pasinex.com/ and on the CSE website at http://thecse.com/en/listings/mining/pasinex-resources-limited

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