Financial Press » FP Exclusives http://financialpress.com Breaking Business, Financial & Economic News Headlines Sat, 23 Aug 2014 13:44:01 +0000 en-US hourly 1 Washington Sells $127,000 a Day in Legal Marijuana http://financialpress.com/2014/08/21/washington-sells-127000-a-day-in-legal-marijuana/ http://financialpress.com/2014/08/21/washington-sells-127000-a-day-in-legal-marijuana/#comments Thu, 21 Aug 2014 14:45:55 +0000 http://financialpress.com/?p=29140 Affinor Grower Acquires 49% of Olympic Peninsula Producer - 

Washington State Marijuana users spent $3.8 million ($127,000 per day) in the first month of legal sales. That will bring in approximately $1 million in state taxes, from 18 stores.

Like Colorado, Washington is applying sales taxes and excise taxes to marijuana, which will be paid first by the growers, then the processor, then the retailer. The tax rate at all three points is 25%.

The financial incentives for governments to regulate and tax marijuana sales ensure that this new frontier will expand, and investment fortunes will be made.

On August 5, 2014, Affinor Growers (CSE:AFI) (OTCQB:RSSFF) (FRANKFURT:1AF) announced the acquisition of a 49% interest in Good to Grow LLC, a medical Marijuana dispensary and grower located on the Olympic Peninsula in Washington State.

“We are now partners in Washington State in a producing marijuana facility,” stated Nick Brusatore in an exclusive interview with Financial Press, “In Canada there are 40,000 patients allowed to purchase medical marijuana.  In Washington State there are 7,000,000 people.”

Initiative 502 is one of two marijuana-legalization initiatives approved in the US, which opens the door to legal investment in a business that already generates over $1 billion in sales every year.

“When we receive the 502 license,” stated Brusatore, “Affinor will be able to mass produce weed for recreational users in Washington State.  Since 10% of Americans smoked pot in the last year, that puts our immediate potential market at 700,000 users – plus out of state visitors.”

Good to Grow is part of small business revolution in the Port of Willapa Harbor, a picturesque region that is set to mature with the new marijuana industry.  The young company is fully operational.

“The existing facility is about 5,000 square feet,” stated Brusatore,” We are going to spend the $600,000 investment to scale it up into a state of the art production facility.  Affinor is the first publically traded Canadian entity positioned to service the recreational U.S. market in Washington State.”

The recreational industry is ramping up quickly and retail outlets have started opening. The Port of Willapa Harbor in Raymond Washington became the first government body in the state to establish a large-scale marijuana growing operation legally under section I-502.

“We anticipate having a 502 designation by January, 2015,” stated Brusatore, “The application is in, and we are just submitting our plan, and figuring out how to accommodate the residency laws.”

Raymond WA city officials confirmed that Good To Grow is a legal marijuana growing operation respecting all the laws and regulations. The new growing industry enjoys significant public support and the city is enthusiastic about the creation of new environmentally friendly jobs.

Good To Grow is owned by entrepreneur and horticulturalist, Richard Montoure, who arrived on the Olympic Peninsula by a circuitous route.

“I tried operating a collective garden in Seattle and other areas of Washington but I was looking for a more business-friendly environment,” stated Montoure in an exclusive interview with Financial Press, “Several of my associates had mentioned Raymond, Washington as a progressive place to do business so I came and checked it out – and I was very impressed.”

Montoure found a warehouse, met with the Port Commissioner and quickly achieved a high level of comfort.  The municipality prefers growers to retail outlets, so Montoure has been focussing on that.

“We’ve been growing high quality medical marijuana and doing about $30,000 a month in sales,” stated Montoure, “In terms of our future ambitions, this is basically a pilot project, in a 502-compliant building.  With Affinor’s investment, and the granting of the 502 status, we intend to become a significant revenue generator and local employer.”

“Affinor will bring the existing facility up to the strict standards required by Health Canada for growing and dispensing marijuana,” confirmed Affinor President and CEO Sebastien Plouffe, “This is an amazing deal for Affinor because it will generate immediate revenue in the US and Richard has already shown us his passion and dedication.”

AFI has also entered the multi-billion dollar strawberry market after acquiring an exclusive license to grow market-ready strawberries using automated, software-driven, vertical farming technology from Vertical Designs.

“Vertical growing technology works beautifully for strawberries, lettuce, herbs and marijuana,” stated Brusatore, “It produces about 13 times more food per square foot, than a traditional greenhouse while creating zero water waste.”

“I have a passion to grow marijuana,” stated Montoure, “It is a craft that I have honed over many years.  The partnership with Affinor makes it possible to do this on a much larger scale, using their cutting-edge expertise and technology.”

Washington State Tax Revenues are forecast to reach $122 million in the next two-years.

Affinor is currently trading at .45 with a market cap of $27.4 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

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Ecuador Rising: Dawn of a New Gold Rush http://financialpress.com/2014/08/20/ecuador-rising-dawn-of-a-new-gold-rush/ http://financialpress.com/2014/08/20/ecuador-rising-dawn-of-a-new-gold-rush/#comments Wed, 20 Aug 2014 16:39:16 +0000 http://financialpress.com/?p=29128 EGX Develops 8 Million Ounce Gold Deposit -

The Ecuadorian government has announced plans to abolish the windfall tax which torpedoed Kinross Gold’s Fruta del Norte gold project.

Ecuadorian President, Rafael Correa, recently stated on national radio that changes would be made to the country’s mining laws, which he acknowledged, “…have been a failure on the part of the government.” Mr. Correa has a PhD in Economics from the University of Illinois.

The new taxation regime is expected to benefit companies like Ecuador Gold and Copper Corp. (EGX-TSX.V), which controls five deposits within the Condor Gold Project in southeast Ecuador including two development stage projects: Santa Barbara and Chinapintza – a joint venture with the Chinese Guangshou Group.

“The Ecuadorian government is working on a package of rule amendments to the mining code,” stated Ecuador Gold CEO Glenn Laing in an exclusive interview with Financial Press, “Sources within the ministry inform us that these new regulations are expected to be drafted sometime in Q4, 2014.”

The new mining laws are expected to change the investment risk profile of the country, creating interest from larger mining companies looking for big assets.

“Ecuador Gold has a big asset in its flagship Santa Barbara Project,” stated Laing, “and we expect to benefit from this renewed interest in Ecuador. We are currently talking to potential joint venture partners, and deep pocketed financiers to finance the development of Santa Barbara.”

Ecuador Gold has had a very successful exploration program, completing a 22,500 meter drill program in the Spring and subsequently announced an expanded resource estimate for the Santa Barbara South and North Zones. In total, the company’s indicated and inferred gold resources in Ecuador increased 26% to 8 million gold ounces indicated; with 2.6 million gold inferred ounces at a cost of discovery of $2 per ounce. This type of resource puts it in the world’s top 10% of low discovery cost gold resources.

EGX

“Regarding the Santa Barbara Project, we are moving the Preliminary Economic Assessment forward,” stated Laing, “We have shipped a half tonne of metallurgical samples to mineral research laboratories in Denver and we are looking for ways to increase the metal recovery rates particularly out of the concentrates. You only get paid for the metal that you extract, so we are very focused on maximizing that.”

The economics of the Santa Barbara deposit will look ever better in this new taxation world. With a current valuation of less than $2 per indicated ounce-in-the ground, the stock has a lot of room to run.

“We anticipate that the PEA will be completed by November, 2014.” stated Laing.

On the exploration side, the EGX geological team is also working on several exploration prospects in and around the Santa Barbara and the El Hito copper project.

“We have identified and are developing a number of good prospects on our property,” stated Laing, “Some of these are grass roots projects – potential new discoveries – and others are brownfields projects that would potentially feed material into the Santa Barbara project.”

“The remainder of EGX’s Condor Gold Project is largely unexplored and there is the potential for a number of large projects still to be discovered “states Laing.

Ecuador is one of the last largely unexplored mining frontiers. With Colombia to the north, Peru to the south, the Andes Mountains gold zone straddles all three countries.

“There is no doubt that Ecuador is losing its stigma as a pariah state”, stated Laing, “President Correa is laying out a welcome mat for the international investment community. The early investors have first mover advantage, and they are likely to do very well.”

The exploration scene is not quiet in Ecuador and there are several new entrants onto the playing field. Ecuador is “elephant territory” when it comes to potential mineral deposits.

Mining legend Ross Beaty, who founded Pan American Silver and the Lumina Copper franchise, recently invested $5 million into Odin Mining‘s Ecuadorian exploration project, not far from the EGX properties. Odin is about to begin a $3 million, 15,000 meter drill program.

Cornerstone has a portfolio of six mineral properties in Ecuador covering 455 square kilometers. Exploration programs on two of the projects are being fully funded by joint venture partners. In northern Ecuador, SolGold Plc, lead by renowned mine-finder Nic Mathers, has earned an 85% interest in the Cascabel project.

EGX has a joint venture with the Chinese Guangshou Group on its Chinapintza deposit. EGX retains a 30% interest in the 300 tonne-per-day gold project while Guangshou funds the construction of the narrow vein, high grade deposit.

“The Guangshou Group is advancing the Chinapintza project along into mine production,” stated Laing, “and they are actively constructing and developing the operation. I expect extraction to begin in Q2, 2015.”

Ecuador Gold and Copper Corp. is currently trading at $0.06 per share with a market cap of $14.7 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

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Graphene is The Future of Tech. And The Future is Here. http://financialpress.com/2014/08/20/graphene-is-the-future-of-tech-and-the-future-is-here/ http://financialpress.com/2014/08/20/graphene-is-the-future-of-tech-and-the-future-is-here/#comments Wed, 20 Aug 2014 15:45:48 +0000 http://financialpress.com/?p=29113 Lomiko’s Cash and Investments Value Almost Exceed its Market Cap -

VANCOUVER, British Columbia, Aug. 20, 2014 (GLOBE NEWSWIRE) –Even though graphite companies have been ever increasing blips on investors’ radar screens over the past couple of years, the space got a massive visibility and validation boost when the already iconic Tesla Motors announced its planned lithium ion battery gigafactory to be completed by 2017 to support the demand for its new Tesla Model S. It’s partnering with Panasonic and initiatives by rival behemoths such as Samsung and others will undoubtedly add to the interest both for graphite and tech derivative graphene.

Without reciting readily available facts, the bottom line is that Telsa is projected to use 30k tons of battery grade spherical graphite derived from 102k tons of feedstock. At the moment, only 80k tons of the high-grade natural flake mineral necessary is being produced annually. And given that the cost per ton of synthetic graphite is roughly double that of natural flake, the future growth may well belong to the latter as more mines come on-stream.

“Investors need to understand that the impressive growth will ultimately come from graphite/graphene technology applications such as 3D printing,” stated A. Paul Gill, CEO of Lomiko Metals (TSX VENTURE: LMR) (PINKSHEETS: LMRMF) (FRANKFURT: DH8B). “Lomiko not only has first class mineral properties, but also intends to be an incubator of graphene technologies. The recent successful market debut of Graphene 3D Labs, of which LMR owns 11.23% or 4.4 million shares, has been a solid proof of concept that our aggressive plans to seek out the best opportunities deliver exceptional shareholder value.”

Considering there are more than 11,000 plus patents or patents pending for graphene technologies, the story just gets more compelling. Large companies such as General Electric and Lockheed-Martin and have also confirmed their interest in utilizing graphene technologies.

Credit Suisse forecasts that global 3D printing market revenues will reach almost $12 billion by 2020; it came in just over $2 billion in 2012. That represents annual growth of 20-30%. The retail consumer/small business market shows the largest growth potential with 100%+ year over year growth in 2013.

While financing for all companies is tough at the moment, LMR closed a $5.5 million financing in March 2014. As well, over the last nine months, the Company’s 100 % subsidiary, Lomiko Technologies, invested $350,000 for a stake in (with Graphene Labs) spinoff Graphene 3D Labs for a final ownership total of approximately 4.4 million shares.

GGG began trading on Aug 11th, 2014, and the shares rapidly hit $1.22 a share on Aug 13 2014, a rise of more than 800% on impressive volumes. The shares currently trade at about $0.95, evidencing the ongoing investor interest. For Lomiko, the collective math of the value of its stake following the GGG debut and recent financing should impress investors. Lomiko’s current market cap is a modest $10.25 million.

At $0.075 a share, investors in Lomiko are basically buying the cash and Graphene 3D Lab stake and getting the rest of the assets as a bonus.

Over and above the fact that Gill is a font of knowledge on all things graphite, graphene and the related technologies and applications, the way he has structured Lomiko is unique among peers. Is LMR a graphite miner? A tech company? An advocate for the economics and sustainability of natural flake graphite and graphene applications?

Anyone who has linked to Gill or Lomiko on LinkedIn, Twitter, Facebook or signed up for news directly from the Company will never have to wade through pedestrian information, but the latest and most relevant developments in the space. Given how fast moving developments are, investors who want to keep abreast should find LMR not only a great potential investment, but also an indispensable information resource.

Graphene 3D Labs has proprietary technology which management believes has the potential to bring 3D printing to the next stage of commercial development and create new markets. The company has two US patent applications pending for its technology.

Nobel Laureate Andre Geim discovered graphene in 2004. Simply put by Geim in a 2013 CNN interview:

Because of its range of extraordinary properties, people are considering using graphene in a myriad of different applications. For example, because graphene is so strong, people want to use it to reinforce plastics, making them conductive at the same time. Because it’s transparent and conducts electricity, people want to use it in applications like mobile phone screens, touch screens, TV screens and so on. People are also considering using it to go beyond silicon technology and make our integrated circuits even denser and speedier. Those are just few examples.

While the applications in 3D printing are impressive, there are several multi-billion dollar industries that will benefit from this alliance including the medical appliance market, biotech and super capacitors. RFID, smart packaging, ITO replacement, sensors, logic and memory are also areas where graphene will likely see exceptional growth.

Lomiko’s flagship property, the 3824 hectare Quatre Milles in Quebec continues to move ahead. The eastern portion has already been drilled. The exciting part is what was found in the West Claim Block in the July 2014 survey; 88 magnetic anomalies with no less than 23 high priority targets. These represent by far the best potential within the property, displaying the same size as the eastern anomalies but larger in number of targets. Since the Company can’t ignore the impressive potential of these findings, drilling is being stepped up within the 2014 plan. Lomiko’s cash position will fund the development.

If you want a pure graphite mining play there are lots of candidates. If you want one that is already diversifying revenue streams, positioning itself at the leading technology edge of this burgeoning space and can be had for what seems to be a ridiculously low price, kick Lomiko’s tires.

Lomiko trades at $0.06 with a market cap of $8.2 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the author’s only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to Financialpress.com are provided. Thank you.

Lomiko Metals Inc.
A. Paul Gill
604-729-5312
info@lomiko.com
www.lomiko.com

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Whether Recreational or Medicinal, Only The Finest Marijuana Will Do http://financialpress.com/2014/08/18/whether-recreational-or-medicinal-only-the-finest-marijuana-will-do/ http://financialpress.com/2014/08/18/whether-recreational-or-medicinal-only-the-finest-marijuana-will-do/#comments Mon, 18 Aug 2014 14:50:07 +0000 http://financialpress.com/?p=29051 Vodis Secures Milestone Joint Venture With Pacific Pharmaceuticals -

Early stage industries always provide a myriad of conundrums for investors. Which companies to buy? Which will survive? What areas will display the most compelling and consistent growth? In the recreational and medical cannabis space, all of these questions are germane. There are, however, early stage companies and prospects appearing that warrant investor interest.

As with any health related compound, the purest of ingredients should be the minimum standard: And so it should be with cannabis, particularly that used for the development of drugs and therapies. Investors should accept from the outset that the key to achieving this standard is not merely in successful mass cultivation, but in the science of that cultivation. Obviously, this standard should and must also pertain to recreational cannabis quality as more US states legalize its use.

“From the outset, Vodis Pharmaceuticals (VP: CSE, 1JV: FSE) has already established itself as a producer of the highest quality cannabis,” stated Otto Folprecht, CEO. “As noted in our recent announcement detailing our arrangement with Pacific Pharmaceuticals (PT: CSE, PCFTF: OTC) to develop cannabis therapies, this Joint Venture further validates the importance of purity and consistency of specific strains as demonstrated by our multiple award winning products.”

Vodis is taking a unique approach. First and foremost, quality and consistency is its hallmark. Second, it is moving into both the medical and recreational realms. The Company is waiting for final inspection by Health Canada to secure a license for its 12,000 square foot Canadian facility as well as in the early stages of building a 25,000 commercial production site in Washington State. As more states legalize recreational marijuana and the pharmaceutical market develops efficacious therapies as an alternative to the toxicity of Big Pharma drugs and devoid of nasty side effects, Vodis is firmly on both sides of that exceptional growth equation.

Vodis’ 25 award winning strains currently fall into three categories:

 

  • Indica: integral for pain relief including from arthritis, MS and Fibromyalgia. As well, relief from Chemo side effects, insomnia, epilepsy and migraines.

 

  • Sativa: For depression, migraines. A slightly milder version for afflictions addressed by Indica

 

  • Hybrid: Pain relief as Indica without drowsiness. Considered ‘super’ strains and will have use in both medical and recreational applications.

Pacific Therapeutics will use extracts from Vodis’ high quality marijuana strains to develop therapies in line with its mandate to reformulate approved drugs to increase efficacy and patient compliance, while reducing side effects. Current applications address fibrosis as well as erectile dysfunction; both high margin, high growth fields. In addition to the $1.1 billion Pulmonary Fibrosis market opportunity, Pacific’s PTL-202 may be effective as a treatment for Liver Cirrhosis a $1.56 billion global market opportunity in 2010, that is expected to grow to $2.03 billion by 2017 (Global Data, Feb, 2011).

In an August 8th Press Release, Pacific’s CEO Doug Unwin states: “If the growth of the medical use of marijuana is to develop, physicians need therapeutics that they can trust to deliver consistent doses of cannabinoids to their patients. We are very excited to enter into this agreement and to begin the development of these in demand therapeutics using specific strains of cannabis developed by Vodis.”

Therapeutic delivery methods will also be developed such as a transdermal patch to ensure consistent and measured dosages. This approach is particularly important not only as an alternative delivery system, but critical when dealing with therapies for children.

Extracting the appropriate Cannabinoids (CBD) takes a significant amount of cannabis ‘feed stock’ for the more than 100 that have been identified so far. For that reason, the best cannabis pharma companies will seek out and engage those suppliers that can deliver the purity and consistency. Unlike a lot of peers in the space, Vodis has been laser focused on delivering, arguably, the industry’s finest cannabis.

Investors need also note that Vodis’ management has an impressive provenance. CEO Folprecht has held positions such as LC developer for Siemens, Chief Information officer at TI Industries, Business Architect at Golden Boy Foods LP, VP at Sumvin Bioscience where he was recruited to run distribution strategy for North America and was COO for Albi Naturals Inc; one of the oldest brands in dietary supplements with over 150 products.

President Ivan Millovski brings a wealth of experience and knowledge about the growth and production of medical grade marijuana. He was the Chief Operations Officer at Canadian Cannabis Research and Technologies and the Chief Executive Officer and co-founder at Vancouver Independent Producers (now Vodis Innovative Pharmaceuticals). He has introduced improved methods and processes that are now standards within the industry.

Obviously, Vodis will be looking to secure other Joint Ventures to expand its distribution. As well, it is constantly applying best practices to ensure it maintains a leadership role in the development and production of the highest quality product. There is no room for anything less when the health, welfare and treatment of patients are the primary goals.

Within the recreational market, another plank in the Company’s revenue profile, it will make available cannabis also of the highest quality in concert with the best distribution partners.

President Ivan Millovski states: “Vodis Innovative Pharmaceuticals has an ambitious plan to grow the company over 4 years to a totals sales volume of approx. $100M Canadian dollars on an annual basis by the end of 2016.”

Vodis currently trades at $0.39 under the symbol VP on the Canadian Securities Exchange.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

 

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

 

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Canadian Junior Secures $138 Million Deal with Freeport Nevada http://financialpress.com/2014/08/18/canadian-junior-secures-138-million-deal-with-freeport-nevada/ http://financialpress.com/2014/08/18/canadian-junior-secures-138-million-deal-with-freeport-nevada/#comments Mon, 18 Aug 2014 14:45:03 +0000 http://financialpress.com/?p=29072 Quaterra Could Retain 25% of Yerington Copper Project with no incremental cash needed -

Quaterra Resources’ (QTA: TSXV, QTRRF: OTCQX) recently announced Membership Interest Option Agreement covering the Yerington, Nevada Copper District with Freeport-McMoRan Nevada LLC [an indirect subsidiary of Freeport-McMoRan Inc. (FCX: NYSE)] deserves a closer look, because there are many reasons to be optimistic about copper in general and Quaterra in particular.

Merely finding copper is no longer a guaranteed path to a profitable mine. Resource nationalism and environmental issues now dictate that it is more about where one can mine, versus where one wants to mine. Consider that grades continue to decline while production costs are rising and permitting has become more expensive and time consuming. Copper inventories in LME warehouses are currently at their lowest levels in six years. That leaves copper prices open to upward price pressure due to short-term supply disruptions.

Given the optimistic prognosis for the copper market, the outlook for Yerington to once again become a significant copper producing district is positive. Historically, it was a significant producer when the Anaconda Company mined copper from the Yerington open pit for 25 years beginning in the early 1950’s. The documented 43-101 and historic resources in Yerington, along with a large land position and water rights controlled by Quaterra’s wholly owned subsidiary Singatse Peak services (SPS) provide an excellent opportunity for expanding the Company’s copper resources. The fact that Nevada is one of the world’s most favorable mining jurisdictions and that Yerington has in-place infrastructure and community support reinforces the positive outlook.

“Quaterra’s strategic plan focuses on working with the best partners to deliver exceptional shareholder value” stated Steven Dischler, President and CEO. “To that end, we intend to advance our large Yerington Project with Freeport McMoRan Nevada LLC. Based on prices recently paid for in situ copper resources, we believe that continued work at Yerington has the potential to create significant shareholder value.”

In June 2014, Quaterra and SPS reached a Membership Interest Option Agreement (Agreement) with Freeport-McMoRan Nevada LLC. The benefit for Quaterra is that, should Freeport elect to complete its investment, the Company will retain 25 to 45% of a large and potentially district scale copper asset at no additional cost to shareholders.

Under the agreement, after conducting additional due diligence about SPS over the next year, Freeport has the right to earn an initial 55% interest in SPS by providing funds to SPS to complete three staged investigation and work programs totaling US$38,600,000 in project funding. During these stages, Freeport provides funding to SPS for property maintenance, G&A, environmental compliance and, in later stages, exploration. Freeport can earn a further 20% interest in SPS (increasing its holding to 75%) should it elect to fund SPS with a further US$100,000,000 of spending, or complete a feasibility study, whichever comes first.

Quaterra also has three other agreements with Freeport-McMoRan subsidiaries covering projects in Utah, Nevada and Texas. The long and ongoing history with major miners such as Freeport and Goldcorp speak to the growth potential of Quaterra. Quaterra management’s focus on Yerington is expected to continue and could include monetization of its gold and silver assets particularly the Nieves Silver Project in Mexico and the Herbert Gold project in Alaska.

As far as management track record, Quaterra President and CEO Steven Dischler brings over 3 decades of successful mining and natural resource experience. Chairman Dr. Tom Patton has a successful track record of making mineral discoveries over a 40 year career. Backed by a Board with decades of mining finance and exploration success with senior and junior mines, Quaterra appears a solid component within a junior mining investment portfolio.

Data from Morningstar shows that some of the largest natural resources funds, including JPM Natural Resources and BGF World mining, have increased their exposure to copper companies in the last few months. Recent transactions for in situ copper resources at Rosemont in Arizona and Taca Taca in Argentina suggest that Yerington is an undervalued asset with significant upside potential.

Investors should note that approximately 16% of Quaterra is owned by financial institutions including AGF, UBS, Investors Group and 4% by Goldcorp. Management owns 7%.

Quaterra recently closed at US$0.45 with a market cap of approximately $8.7 million.

 

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

Quaterra Resources Inc.
1199 West Hastings Street
Vancouver, BC V6E 3T5
Canada
Scott B. Hean
Chief Financial Officer
1-604-641-2747
info@quaterra.com

 

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‘Grey Tsunami’ Creates Surge in Physiotherapy Growth http://financialpress.com/2014/08/12/grey-tsunami-creates-surge-in-physiotherapy-growth/ http://financialpress.com/2014/08/12/grey-tsunami-creates-surge-in-physiotherapy-growth/#comments Tue, 12 Aug 2014 14:45:00 +0000 http://financialpress.com/?p=29008 Agility Health Consolidates a Profitable but Fragmented Industry -

David Cole (54), a Seattle businessman, still plays competitive soccer and that is taking a toll on his body. “In the last three year years I’ve torn a quad muscle, a calf muscle and a tendon in my shoulder,” explains Cole, “This has required multiple trips to the physiotherapist”.

Aging athletes are a key part of the “Grey Tsunami” that is flowing into Rehab and Physiotherapy Clinics across the U.S.   The $31 billion market is growing at an annual rate of 6.1%.

Agility Health (AHI-TSX.V) has carved out a profitable niche in this space, and the company has just announced a “transformative” deal which is expected to increase annual revenues from about $65 million to pro forma revenues exceeding $100 million.  The current market cap of Agility ($40 million) has not factored in the significant anticipated revenue bump ($39 million) from the new acquisition.

The total acquisition consideration of $20.8 million cash is less than 5x the anticipated pro forma EBITDA of the entity and would expand Agility Health operations to more than 200 sites across 26 states with more than 1,800 employees providing services for approximately 2 million patient visits per year. The acquisition of the target will be immediately accretive to Agility’s earnings.

“The target company complements a key area of strategic growth,” stated Davidson, “It’s a line of business that we are looking to further grow in, and to specialize in. We believe we can advance their existing client relationships for both company’s benefit.”

Agility Health currently operates 74 outpatient or onsite rehabilitation locations in 17 states. The company also contracts rehabilitative services to 41 hospitals and inpatient rehabilitation units, 36 nursing homes, long-term care facilities and other service locations in 9 states.  The company also provides embedded services at manufacturing facilities for a plethora of Fortune 500 companies.  Further, Agility has an orthotics company with an elite athlete client list.

“Our service offerings are diverse by design,” stated Davidson, “In the US, each region is unique, with different micro-healthcare economies. Our diversity allows us to cross-sell, and it creates a strong defensive position if market conditions change. Our skill set and services are customizable to any regulatory environment or geographic location. The key is that we have developed proprietary software that ties it all together.”

“Another area of strategic growth is outpatient clinic acquisitions and development,” stated Agility Health CEO Steven N. Davidson in an exclusive interview with Financial Press, “We target clinic owners who have developed 2-5 clinics.  Agility run outpatient clinics are free-standing, and we partner with clinics where Agility become a majority owner.  It’s a good niche that is still meaningful for companies of our scale, but too small for larger competitors.”

Davidson explains that a typical owner of a rehab clinic is very passionate about being a clinician, and building their practice. Agility provides “the back office functions that they don’t like to do, and typically not skilled at”.  Namely, human resources, accounting, technology, data management and compliance.

When Agility acquires clinical practices, the seller typically retains 20-30% equity, so they are incentivized on the backend.  Sellers also have access to funds to monetize and further scale their business.  “The real synergy comes when a clinic operator can say, “I know doctors in an under-served area, let’s investigate the economics of starting a clinic there to address the market need.”

“We have developed a high tech infrastructure designed for outpatient clinics and hospital departments,” stated Davidson, “We can take time consuming tasks off their plate which allows them to be better practitioners, better businesspeople.”

Agility also manages the technology practice management for hospital rehabilitation departments.  The company presently has about 25 hospital clients that are transitioning to Agility’s next generation of software that also contains a clinical database with 290,000 cases.  “We are currently validating data that will help us predict how long somebody should typically be receiving therapy, based on a standardized set of clinical data collection embedded in our software,” stated Davidson, “This will allow us to manage cases internally and also externally for insurance companies.”

“Our sweet spot is deploying our technology and entrepreneurial skill set to a hospital that doesn’t regard rehab as a core competency,” stated Davidson.  “Joint-venturing with a hospital is the perfect scenario for us.  We are in discussions with various hospital systems right now, demonstrating to them how we can save money, streamline business, and increase their quality of care.”

“Data means everything to all stakeholders and is key,” confirms Davidson, “It is vital for clinicians to have the ability to validate effectiveness and patient satisfaction. Data-driven decision-making is where we see the future. Creating software to manage a clinical database is central to our vision.”

There is a big push in the U.S. to transition patients out of the hospital as quickly as possible – creating more post-operative care.  ‘Evidence-based medicine’ is in vogue and prompts the question: “What’s the research behind a given therapy?” If you’re a spine patient, should you be receiving acupuncture, surgery, chiropractic treatment or physiotherapy?  What treatment modality provides the best value and results?

Davidson further explains that “Obamacare” supported initiatives are putting the money into the hands of institutions to manage the entire length of a patient case, from the time the patient sees a doctor for their condition, through to surgery and post-operative care.

The ‘grey tsunami’ is a meaningful factor for Agility. As you get older, injury rates go up. Physiotherapy utilization is 3-5% a year for the general population and over 10% for a 65-year-old.  Also, there are changing attitudes to physiotherapy, as patients are increasingly self-referring to a physiotherapist.”

Agility Health is currently trading at $0.51 with a market cap of $41 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

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South African Refinery Loses Chunk of Gold the Size of a Microwave http://financialpress.com/2014/08/11/south-african-refinery-loses-chunk-of-gold-the-size-of-a-microwave/ http://financialpress.com/2014/08/11/south-african-refinery-loses-chunk-of-gold-the-size-of-a-microwave/#comments Mon, 11 Aug 2014 11:20:40 +0000 http://financialpress.com/?p=28968 Starcore’s Petty Cash Swells to $10 million

New Inventory software revealed that South Africa’s Rand Refinery is missing 87,000 oz. of gold worth $114 million at today’s prices. The lost chunk is the size of a conventional microwave.

A small army of analysts is trying to figure out what that chunk of gold will be worth a year from now, or five years from now.

“I remember watching gold when it was $35 an ounce and we thought if it ever hit $100, the world would come to an end,” former U.S. Representative Dr. Ron Paul told CNBC this week, “so yes, gold is going to keep creeping up.”

Successful gold investing involves ‘de-risking’ – and one of the simplest strategies is to invest in a debt-free, unhedged gold producer that is profitable at current gold prices.

Starcore (SAM-TSX), a Canadian-based gold miner operating in Mexico, fits this profile.

“Our San Martin Mine in Mexico produces about 24,000 ounces of gold equivalent a year,” stated Starcore President and CEO Robert Eadie in an exclusive interview with Financial Press. “The cash cost is $840 an ounce. We own 100% of the project with no debt and about $10 million in cash.”

When Starcore bought the mine, it raised the money in the equity markets and with debt, so for 5 years gold production was hedged. But the company has been debt free for a year. The cash profits go right into the bank, allowing it to drill and expand without dilution.

“When Wheaton River was going through a merger with Goldcorp,” stated Eadie, “it was determined the mine was too small for them so we picked it up for $26 million, and it’s been producing now for 7.5 years, and we expect it to produce for another 50-60 years.”

Officially San Martin has a 7-year mine life, but Eadie points out that it has remained 7 years for the last 20 years.

“Starcore manufactures gold,” stated Eadie, “That is our business model. As long as it is profitable for us to haul the rocks out, we’ll keep doing it. Drilling a working mine is expensive and complicated. It isn’t worth it spending that money. As long as the veins of gold continue, it’s more cost effective to keep mining it, as the life-of-mine expands out in front of us.”

SAM image An underground epithermal vein mine, San Martin has about 315 employees. It uses an innovative processing technology called ‘dry tailings’ – which means that 75-80% of the chemicals are recovered.

“If you look at our tailings stack you’ll see plants, trees, cacti growing out of it,” stated Eadie. “That is because the waste is benign. I got tired of explaining the tailings system so we dug plants into it to demonstrate how clean our technology is.”

Starcore has many community programs in place including building a vegetable cooperative that will feed about 170 people a day.

“I understand that social responsibility is not a high priority for all investors,” conceded Eadie. “But it is important to us. And it is good business. We have an established corporate track record which will be an advantage in the development of future acquisitions or expansions.”

Starcore plans to spend a million dollars on a drill problem about 4 kilometers from the current producing gold mine. That’s about 10% of the current cash-on-hand.

“Our property is 10 by 13 kilometers, which is about 12,900 hectares,” stated Eadie. “There are no royalties. We know that there is a large epithermal gold system on our property but we don’t know where the source is. With the banked profits from the San Martin mine, we can investigate and hopefully answer that question.”

As well as being in a politically stable mining jurisdiction, the mine has excellent infrastructure. San Martinez (pop. 500) is directly adjacent and supplies labour. You can drive a brand new car right up to the mine and not get it dirty. The main road is only one kilometer away.

“The mine is hooked up to the national power grid of Mexico,” stated Eadie. “It’s basically a smart grid, so we gain operational efficiencies, for instance by doing maintenance between 6 p.m. and 10 p.m. We’ve got so much water that we trade it to the local farmers for access rights.”

The mill runs 18 hours a day in three shifts – morning, afternoon and night. The current capacity of the mill is 850 tonnes a day. Starcore is considering increasing that to 1,200 tonnes per day, at a cost of about $1.5 million.

“Starcore is profitable,” stated Eadie. “We’re production focused, we have a successful operating team, and we are deploying our cash reserves to increase efficiencies and expand operations”.

Market Vectors Junior Gold Miners (GDXJ-NYSE) increased 25% in the last 60 days to $42.87. According to Financial Post Data, there have been 41 Canadian mining deals in 2014 worth $7.1-billion.

Starcore is currently trading at $.16 with a market cap of $22.9 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

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Medical Marijuana Patients Can Smoke Marijuana at Work http://financialpress.com/2014/08/08/medical-marijuana-patients-can-smoke-marijuana-at-work/ http://financialpress.com/2014/08/08/medical-marijuana-patients-can-smoke-marijuana-at-work/#comments Fri, 08 Aug 2014 17:44:43 +0000 http://financialpress.com/?p=28960 Supreme Pharmaceuticals Builds Massive Marijuana Facility in Southern Ontario -

According to Canadian employment lawyer David Whitten, medical marijuana patients have a legal right to ingest their prescribed drugs at work.

“Employers are going to ignore Mary Jane at their own peril,” Whitten told CTV News, “She’s coming to the dance whether they like it or not.”

Supreme Pharmaceuticals (SPRWD-OTC) (SL-CSE) is a leader in this space, pursuing multiple medical marijuana facilities in Canada while evaluating medical cannabis investment opportunities within the State of Arizona.

Medical Marijuana is currently being prescribed to treat pain, neurological disorders, mental health, back spasms, and gastrointestinal disorders. Surging demand and a rapidly changing regulatory environment are creating a once-in-a-lifetime investment opportunity for early movers into government-sanctioned production facilities in the U.S. and Canada.

“We intend to mitigate market and legislative risk,” stated a Supreme Director, in an exclusive interview with Financial Press, “Arizona is a promising market and we have begun investigating opportunities there to complement our Canadian property.”

Recent successes in the medical marijuana space include producers Tweed, which has a market cap of $98 million, Windfire Capital whose stock has increased 300% in the last 12 months and Affinor, which has experienced 700% share price increase in the last four months after declaring its intention to diversify into medical marijuana and industrial hemp.

Supreme recently announced a 1 for 5 share consolidation, which is expected to be a major catalyst for the company going forward.

“Now that the shares are consolidated it prepares us to attract institutional funding and move forward with the project,” stated the director, “Because our facility is so big, it does require capital expenditure.”

Many institutional investors have internal rules forbidding them from investing in companies trading at less than .10. Supreme’s consolidation opens the door to raise money at a higher price, with less dilution, while putting the stock in the hands of strong long term investors. Likely financing participants include brokerage firms, boutique investments banks and merchant banks.

“Prior to the 1 for 5 share consolidation, we had 290 million shares outstanding, trading around .08.,” confirms President and CEO, David Stadnyk, “That was a lot of shares to continually eat through. Now we have 59 million shares outstanding, trading around .35. It is a much tighter structure and it puts up in a position of strength.”

Without the consolidation, the company believes it could have raised $3 million without institutional investment, and now a target of $5 million is achievable – which is what the company needs to complete the construction of the Southern Ontario facility.

“Security is the biggest single cost we are facing,” stated Stadnyk, “You can imagine the public relations nightmare if a government-sanctioned marijuana facility was robbed. So – with good reason – the security protocols are rigorous.”

To receive final approval from Health Canada the facility needs to be ready for a full grow cycle. The nursery, the vault, the grow rooms – everything has to be completely operational.

“As vigilant protectors of shareholder value,” stated a Supreme Director, “We would not be doing this if we were not in possession of a preapproved license which basically says: ‘assuming you do the following things, we will approve your license after the audit.”

The Supreme greenhouse was originally a joint venture with Agriculture Canada used to grow tomatoes.

“The government spared no expense,” stated Stadnyk, “Our civil engineers inspected the facility and said, ‘Wow, this is a first class industrial facility that is over-built, in terms of construction, water supply, agricultural standards.”

Supreme’s key ‘de-risking’ factor is the preapproved letter. Without that, it is just one of 600 greenhouse companies applying for a license. A second significant de-rising factor is the size of its facility. At 342,000 square foot, the production facility is the size of six NFL football fields.

“Supreme has the potential to supply a significant percentage of the total Canadian market at full capacity,” stated Stadnyk, “The government’s agenda is to regulate fewer operations and collect tax. Is it more efficient to regulate and tax one 342,000 square foot facility – or sixty-eight 5,000 square foot facilities? From the government’s point of view, bigger is better – and we are big.”

Arizona is one of 23 states where marijuana is now legal for medical use. The state has 52,731 licensed users, with approximately 70% using marijuana for the treatment of chronic pain.

There are about 40,000 qualified medical marijuana patients in Canada today. Those patients include children suffering from epilepsy. In ten years the number of qualified patients is expected to be over 450,000 (source: Health Canada).

“An employer is not required to accommodate a secret prescription,” Whitten told CTV News, “So you only really engage the protection of the legislation, of the Human Rights Code, by disclosing to your employer that you have a prescription. “

Supreme Pharmaceuticals is currently trading at .32 with a market cap of $18.7 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

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Jungle Warfare: Peru Destroys Illegal Mining http://financialpress.com/2014/08/05/jungle-warfare-peru-destroys-illegal-mining/ http://financialpress.com/2014/08/05/jungle-warfare-peru-destroys-illegal-mining/#comments Tue, 05 Aug 2014 14:56:54 +0000 http://financialpress.com/?p=28899 Inca One Seizes the Opportunity in Peru

Peru’s new high commissioner for mining formalization, former army general Augusto Soto Castañola has ordered an all-out assault on the 40,000 illegal miners operating in the jungles of Peru.

A multi-force police operation has been burning down mining camps along the Inter-Oceanic Highway linking Peru and Brazil – destroying boat engines, vehicles, mining equipment and chemicals including large stockpiles of mercury that was destined to end up in jungle rivers.

“We have struck a major blow against illegal mining,” Soto said on local Peruvian Television, “We’re going to continue the fight. We’ll give no quarter.”

io_image

The muscle behind the new mining legislation creates a perfect storm of opportunity for Inca One (IO-TSX.V) – a Canadian-based resource company with a gold milling facility and an exploration project (Corizona) in Peru.

“The rules in Peru create something of a captive market for Inca One,” confirms influential Gold Newsletter Publisher Brien Lundin in the July 2014 issue, “The company is currently trading at bargain basement prices and looks primed for significant appreciation once its business model gets a head of steam. It’s another buy.”

Mr. Lundin is CEO of Jefferson Financial, publisher of Gold Newsletter, and hosts the New Orleans Investment Conference, the oldest and most respected investment event of its kind.

Inca One’s goal is to become the small-scale miner’s company of choice for legal, environmental and technical guidance, emulating North American Standards.

The new mining legislation in Peru requires formal miners to use fully permitted mills to process ore, mills accepting ore from non-formalized miners will be jailed, formal miners must acquire permits for all operations and there will be jail time for gold miners who haven’t formalized.

“There are over 200,000 small scale miners in Peru,” stated Edward Kelly, President and CEO of Inca One, in an exclusive interview with Financial Press, “There has been explosive growth in revenues in this sector while the junior mining area has languished. Our recent financing will allow us to quickly ramp our Chala Plant to process 50, then 100 tonnes per day.”

At just 50 tonnes a day, Inca would generate $4 million in gross operating profit.

Flying under the radar screens of most investors, at $0.15 cents and a modest market cap, Inca One warrants consideration as a precious metals play and an innovative strategy to achieve significant gold production with low capital expense.

For context, Dynacor (DNG: TSX), which currently mills 250 tonnes per day at its plant in Acari, southern Peru has a market cap of $65 million at a $1.80 share price. The Company also has 5 exploration properties.

DNG’s market cap is currently 6 times Inca One’s. As Inca One ramps up to 100 tonnes per day, that market cap gap should narrow to roughly 3 times, resulting in a compelling return for current shareholders.

On July 15, 2014 Inca One provided an update on the Company’s Phase I Chala One Plant expansion in Arequipa, Peru. The company has engaged an engineering firm experienced in building milling facilities up to 300 TPD.

Two new 50 tonne per day ball mills have been purchased to augment the current 25 tonne per day circuits at Chala One. The first ball mill is scheduled to go on line by end of Q3 while the second ball mill will be added by end of Q4.

With the two new 50 tonner per day ball mills operating in tandem, the Company will achieve a combined capacity of 100-tonnes per day. The mill already has sufficient tailings capacity to support the additional throughput.

Inca One is stockpiling initial shipments of ore for continuous mill processing by end of Q3. The company is pursuing additional ore-purchase agreements with several small-scale miners who can meet or exceed the Company’s gold grade target of 0.8 ounce of per tonne gold (24.9 grams per tonne gold).

The Chala One plant is currently a 25 tonne per day carbon in leech (CIL) plant located on 17 hectares of property in the region of Arequipa. Arequipa hosts the largest amount of small-scale mines, which are legal to buy and process ore from. These are mines that are unable to support stand-alone plants and the potential demand for ore processing is considerable.

“The recent $5.5 million debt financing will be utilized in two ways,” stated Kelly, “First, we will take $3.5 million to build out our Chala facility to ramp up to milling 100 t/pd. The remaining $2 million will be used to buy ore. And we know there is gold available. Lots of it.”

In the first quarter of 2014, Inca’s Chala facility milled 365 tonnes of ore, which yielded 172.4 ounces of gold with an average grade of 18.17 grams per tonne.

The reason the grades and recovery are so good is that the local miners know where the gold is and that means better prices for their ore and ultimately better returns—and cashflow—for Inca One.

Inca One is joining Rio Tinto (RIO-NYSE), Newmont Mining (NEM-NYSE), Anglo American (AAL-L) and Goldfields (GFI-NYSE) in Peru.

“Comparable operations by Dynacor Gold Mines managed to generate US$9.1 million in net earnings in 2013,” stated Lundin in the July 2014 Gold Newsletter, “Dynacor has averaged US$265/ounce in gross profit during the three years prior. Using a slightly more conservative number of $250/ounce, Inca One’s management figures it can make around C$8 million in annual cash flow by quickly expanding Chala One to a 100 tpd operation and consistently processing at least 0.8 ounces/ton ore.

Inca One is currently trading at .15 with a market cap of $9.5 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the authors only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.

Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.

 

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If Big Pharma Isn’t Nervous, It Should Be. http://financialpress.com/2014/07/31/if-big-pharma-isnt-nervous-it-should-be/ http://financialpress.com/2014/07/31/if-big-pharma-isnt-nervous-it-should-be/#comments Thu, 31 Jul 2014 14:55:56 +0000 http://financialpress.com/?p=28868 Early Stage Cannabis Technologies…Potentially The Next GW Pharma

can_2Deep in the brain, buried within the central nervous system as well as lymphatic tissues and organs throughout the body are cannabinoid receptors; patiently waiting to help address a myriad of diseases. With the advent of cannabis research and therapy development many patients will likely trigger them very soon.

Two known receptors in the Endocannabinoid system are CB1 and CB2. There is mounting evidence that there are many more. Simply put, this system of receptors is involved in dealing with a variety of physiological processes including appetite, pain-sensation, mood and memory.

Activating these receptors by introducing the appropriate drug based on a specific formula of cannabis, primarily utilizing Cannabidiol (CBD) and Tetrahydrocannabinol (THC) has already shown remarkable potential efficacy, albeit somewhat anecdotal, in the treatment of a host of afflictions ranging from cancer to epilepsy, glaucoma, MS, Tourette’s and even eczema.

To date there have been approximately 100 cannabinoids identified; each with the potential to be an integral component of a lower cost treatment; countering the expensive and frequently toxic Big Pharma drugs and therapies.

The current level of research and development of cannabis therapies is analogous to where the Internet was in the mid 1990’s. What is known is that the introduction of targeted phytocannabinoid formulations, such as those with CBD and THC, signal the body to make more endocannabinoids and open more cannabinoid receptors enhancing the body’s ability to fight pain and disease.

“At this point, we don’t actually know how many therapies are possible utilizing phytocompounds, but we suspect hundreds, if not thousands,” stated Craig Schneider, President and CEO of Cannabis Technologies (CAN: CSE, CANLF: OTCQB). “To that end, CAN has developed a proprietary Cannabinoid Drug Design Platform (CDP) to identify new bioactive compounds within the cannabis plant that interact with certain genes responsible for specific diseases.”

The poster stock in this Life Sciences sector is GW Pharmaceutical (GWPH: NASDAQ). The Company IPO’d at $8.90 in May 2013 and traded as high as $107 in 2014. When investors compare the metrics of peers GWPH and CAN, the case for the latter appears compelling.

While it would be easy to draw the usual David and Goliath analogy, in this case the participants, while competitors are really more peers, working toward the same therapeutic goals. And, as a result of the focused CDP development process, cannabis therapies can be on the market in 4-6 years versus 10-15 years as is the norm through the Big Pharma pathway.

GW currently trades at $87 has a market cap of $1.5 billion and had trailing twelve-month (ttm) revenues of $50 million, is virtually debt free and has approximately $163 million in cash. Cannabis Technologies trades at $0.37 is pre-revenue and has a market cap of $12 million with roughly $600k in cash. CAN shares have a 2014 high of $0.71 and low of $0.33.

GWPH market cap is 30 times revenue. Translating that multiple to eventual revenues to early stage CAN evidences compelling growth potential.

GWPH, as CAN, decided early on to dedicate R&D to therapy development and plant their respective flags firmly in Life Science space instead of the class of ‘Medical Marijuana’ companies with all the different connotations.

These companies are involved in serious and life saving science. There are others as well, including AbbVie, which makes the FDA approved chemotherapy nausea treatment Marinol, which is a synthetic formulation of THC. Valeant Pharmaceuticals produces Cesamet, which is a like treatment. The best known to investors is likely GW’s vapor delivered Sativex, used currently in 25 countries outside the US for treatment of the spasticity associated with MS. Sativex is currently in clinical trials for approval as a treatment of cancer pain.

CAN’s Schneider notes: “The media has categorized CAN as an early-stage GW Pharma, a comparison we welcome. We are currently entering Phase 1 trials for our glaucoma treatment CTI-085, which showed great therapeutic promise in pre-clinical trials relieving the ocular pressure associated. This initial therapy is much more, being a proof of concept of the ability of our CDP to identify specifically engineered treatments to deal with many debilitating and deadly diseases.”

For context, the $12 billion ocular disease market includes $5.7 billion for glaucoma.

Other drugs in development include GW’s Epidolex for the treatment of rare diseases as well as other compounds in clinical trials for treatment of autoimmune, diabetes and schizophrenia.

The key to therapy going forward is this specific engineering and the ability to replicate the compound for quality and consistency. Sativex is basically 50% CBD and 50% THC. The CBD component has the dual task of being the active ingredient as well as damping down the psychotropic effects of the THC. CBD comes from the hemp plant and has only trace THC.

As new cannabis drugs develop, individual formulations will be more therapy specific, have non-cannabis ingredients added and undergo stringent quality and consistency controls.

Big Pharma has a right to be nervous. Side effects from cannabis therapies are virtually non-existent, development costs are extremely low by comparison–$5 billion on average per Big Pharma drug—and companies like CAN are confident that as it progresses it can develop therapies in a period of 60-90 days instead of decades.

Part of the strategic engineering is not just how much of this and that goes into a compound. The key is to develop plants that produce the right material for each formulation. It is not inconceivable that if there were 500 cannabis therapies, there would be 500 different strains of cannabis plant as ‘feed stock’.

The label of Medical Marijuana companies, when referring to enterprises such as GW, CAN, AbbVie and Valeant, are the exception to what appears to be a wild west show at times. These are serious life science companies. To include them with the plethora of Medical Marijuana initiatives, whether junior mining companies looking for a new direction or those that feel simply growing generic marijuana is a sound business plan, many will likely fail or be swallowed.

Like the Internet of old where there are few survivors today from that era, the cannabis space will eventually be littered with casualties as it builds out. What is not in dispute, is that the efficacy of cannabis appears undeniable and therapy development will continue and likely speed up, building on early successes. GW and CAN will likely be among those to grow and prosper; a good thing for both shareholders and, more importantly, those millions of patients suffering from particularly nasty diseases and conditions.

Innovative science requires scientists. Rounding out CEO Craig Schneider’s 20 years of capital market and biopharmaceutical experience CAN has two world-class scientists. Dr. Sazzad Hossain Ph.D, M.Sc., Chief Science Officer, brings two decades of experience in new drug discovery and natural health product development. His practical experience includes senior scientist at the NRCC bringing and has generated over $500 million in revenue from therapies he has been involved in developing from the discovery to commercialization.

Key as well is the Company’s breeding, genetics and cultivation division led by Dr. Hyder Khoja, Ph.D., M.Sc., A.Ag. who brings 17 years of extensive research and business provenance in life sciences and business services.

Management has spoken frequently about addressing larger therapy markets including cancer, metabolic diseases and pain and inflammation. On par with GW, CAN has plans to produce medicines in-house initiated by its CDP technology, breeding and cultivation division and proprietary formula engineering. Even at this early stage, the Company is keenly aware of the need for not just the development of therapies but the ability to replicate each with strict quality and consistency.

Further adding to shareholder value is a patent pending for CAN’s CDP and a plan to protect IP by filing patents as therapies are developed.

If you are considering investing in the cannabis space, buy the science. Hype has a very short shelf life.

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