Financial Press » FP Exclusives http://financialpress.com Breaking Business, Financial & Economic News Headlines Tue, 16 Sep 2014 19:01:36 +0000 en-US hourly 1 NSA Shakes Down Yahoo for $250,000 a Day http://financialpress.com/2014/09/15/nsa-shakes-down-yahoo-for-250000-a-day/ http://financialpress.com/2014/09/15/nsa-shakes-down-yahoo-for-250000-a-day/#comments Mon, 15 Sep 2014 14:00:41 +0000 http://financialpress.com/?p=45789 SecureCom Launches Open Source Mobile Encryption Service - 

New court documents reveal that the US government threatened to fine Yahoo (YHOO-NASDAQ) $250,000 a day if it refused to hand over user data to the National Security Agency (NSA).

According to the documents AOL (AOL-NYSE), Apple (APPL-NASDAQ), Google (GOOG-NASDAQ) and Microsoft (MSFT-NASDAQ) have all reluctantly participated in the NSA electronic surveillance program.

Big Brother is here. Counter-surveillance is now a billion dollar industry with start-ups like SecureCom Mobile (SCE-CNSX) launching encryption software that cannot be circumvented by mobile carriers or other parties, thereby ensuring end-to-end communication privacy.

“People in the technical community have been aware of widespread electronic surveillance on citizens for the last 15 years,” stated Sean Comeau SecureCom Chief Technology Officer in an exclusive interview with Financial Press, “But it took an NSA contractor like Edward Snowden with a huge pile of documents, to push it into the public consciousness.”

Comeau is a serial entrepreneur, a founding member of the Canadian security conference, CanSecWest – and he has a proven track record in innovative security technologies.

“I have friends in the communications industry who inform me that even before the digital era, when tapping a phone involved alligator clips on wires, more often than not electronic surveillance was carried out without any legal authority,” stated Comeau, “And here is the remarkable thing: as long as it is done professionally, there’s an unspoken rule that you don’t disconnect it. Now that everything is digital and completely automated, the cost of storage has fallen to a couple of cents per gigabyte, and compression technology has significantly improved, it’s become practical to target everyone all the time”.

SecureCom Mobile develops consumer software and hardware encryption communications products for mobile phones, tablets, and computer-based platforms, employing strong cryptographic algorithms and protocols to protect communication from surveillance.

“The problem isn’t just with the NSA,” stated Comeau, “I’ve heard first hand stories of CSIS [Canada’s CIA] strong-arming network operators into installing surveillance.  A couple of CSIS representatives just walk into a company and say, ‘We want to monitor your customer’s communications.  If you help us your expenses will be covered. If you don’t co-operate you’re going to find yourself receiving unwanted and costly attention from other government agencies.’ It sounded pretty unbelievable at the time, but now we know, and have proof, that situations like Room 641A are the rule rather than the exception.”

Peter Wilson, the CEO of SecureCom has raised more than $150 million for a variety of mining and technology companies. The Founder and President of Sterling Grant Capital – Wilson sees communication privacy as a sector with big opportunities.

“SecureCom is releasing a free version of our counter-surveillance technology to get as many people using the service as possible,” stated Wilson, “We anticipate generating revenue from the premium features such as the ability to send large attachments and enjoy voice calls with higher quality audio.”

SecureCom’s private messaging app allows the use of telephone numbers and e-mail addresses as usernames. The app permits 5 MB encrypted file attachments.  Group messaging is also supported. Wilson believes the private messaging app is a viable and secure alternative to e-mail, which is inherently unsafe due to the legacy of its design.

“Right now we have free downloads available for the Android platform,” stated Wilson, “and we have fully tested software for Blackberry awaiting approval.  We are also developing technology for IOS, Windows Mobile, Windows desktop and Mac OS X.

“As the ability to store the communication of large populations over a long time line gets cheaper and cheaper,” stated Comeau, “The question is not: ‘Could any of this information damage me now?’ The question is: ‘Could this information damage me – ever?’”

The Snowden documents have made it clear that that mainstream communication systems like email, Skype, phone, texting – are all extremely vulnerable to privacy violations.

“The NSA is building vast data centers to sort and store all the data they are collecting,” stated Comeau, “It’s scary. Do you know exactly what information you want to be public 20 years from now? Who’s to say that data will never leak to the general public? After all, they couldn’t even secure their super-secret plans to spy on us all.”

SecureCom releases its technology under an open source license to confirm the absence of “backdoors” or other methods to remotely control access to private information.

“We want users to be able to see the code, analyze it, download it and if they are motivated and technically capable, they can change it,” stated Comeau.

‘Open source” refers to a program that has source code available to the general public for use and modification. Open-source code is a collaborative effort where programmers share the improvements within the community.

The open source’ model is proven in this sector. Sourcefire (FIRE-NASDAQ) is an open source technology company that provides advanced threat protection from any device to any cloud. Last year, Cisco (CSCO-NASDAQ) purchased Sourcefire for $2.7 billion.

SecureCom is currently trading at .55 with a market cap of $16.6 million.

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Seeking Alpha’s Peter Epstein talks Dynacor vs Gainey Capital http://financialpress.com/2014/09/10/seeking-alphas-peter-epstein-talks-dynacor-vs-gainey-capital/ http://financialpress.com/2014/09/10/seeking-alphas-peter-epstein-talks-dynacor-vs-gainey-capital/#comments Wed, 10 Sep 2014 17:07:51 +0000 http://financialpress.com/?p=45775 Great piece wrtten by Seeking Alpha’s Peter Epstein . Great writer knows his industry very well . Makes a Great Read.

Dynacor vs Gainey Capital , 2 Similar company’s one the father one the Jr . The Jr has bigger upside and its toll capacity is catching up to Senior one to look out for .

Epstein’s gold junior pick with tremendous upside — Gainey Capital

Gainey CapitalGainey Capital Corp. (TSXV: GNC) is a gold and silver exploration and development company exploring an aggregate of 18,766 hectares strategically located in the gold/silver-rich Sierra Madre Occidental Trend in western Mexico. Surrounded by major and mid-tier TSX and NYSE precious metals producers First Majestic Silver, Primero Corp, Chesapeake Gold, Goldcorp, Endeavor Silver and Great Panther Silver, the Company’s flagship El Colomo property is largely underexploited and is the focus of the Company’s near-and long-term development plans.

However, what makes Gainey Capital unique is its 100% ownership of a completely refurbished gold processing facility operating at 300 tonnes per day, “tpd,” capable of being upgraded to 600 tpd with minimal additional capital. This is the ONLY facility in the area to include a gravimetric/flotation processing center, which optimizes recovery rates. Gainey is in active negotiations with multiple parties about toll milling their ores. Toll milling will generate meaningful cash flow to fund exploration and development of Gainey’s own properties. The company could be mining its own ore and processing it at its own mill within 6-9 months. [Please See Video Clip of Mill at the bottom of the company's homepage]

Under-Promise & Over-Deliver, Everyone Says it, CEO David Coburn Does it

I have been speaking with Founder & CEO of Gainey Capital Corp., David Coburn about his plans for the company. I had been hearing that Gainey was a company to watch. Then on June 13th, Jay Taylor put out an excellent report on Gainey. I called Coburn. Over the years, I’ve spoken with hundreds of management teams. One of the more frequent things I hear from them is that, “I want to under-promise and over-deliver!” While that’s a great corporate philosophy, rarely does it seem to happen….

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That’s why it was so refreshing to speak with someone with vast experience running successful companies efficiently and delivering on promises. As CEO, he has very little support staff and ends up doing a wide range of work himself, which he’s happy to do–it’s in his DNA. Proof of his prudent corporate governance came just recently when Gainey was offered C$10 million in equity capital. Coburn conservatively took only C$2.7 million to avoid excessive dilution.

Exceptionally Strong Team for a Junior Company

Like any successful manager, David surrounds himself with top-tier talent. For example, in charge of Gainey’s 300 tpd gold processing facility is George Cantua, Mexican Operations Manager. He was hired from Barrick Gold where he supervised a 24,000 tpd milling facility. George was responsible for Gainey’s mill upgrades coming in on time and under budget. Board member Larry Segerstrom was Geology Manager at the largest gold mine in the world for 7 years, Freeport McMoRan’s Grassberg project as well as COO of Paramount Gold/Silver. Gainey also has Peter Megaw on the team. His company Cascabel is heading up the explorations strategy. He is the most successful exploration geologist in Mexico. Peter is the technical brains behind Mag Silver.

Strong Financial Team

David Coburn has also assembled some of the smartest, “precious metal” investment bankers and investors in the USA/Canada/Mexico whose investment in Gainey Capital have been lead by Mexico Billionaire Ernesto Echavarria. Coburn explained that this investment by Echavarria of $1.3 Million is a key strategic play for both Gainey and Echavarria given Gainey’s operations are literally in Mr Echavarria’s back yard and that Mr Echavarria is an extremely intelligent & successful precious metal investor among his other business holdings. Mr Echavarria was quoted as saying,

“I am excited to participate as a major investor in Gainey Capital given it is in an area that contains very high gold and silver mineralization ” Echavarria went on to say “this is a unique opportunity given that Gainey has a operational Mill that is in one of the best areas in Mexico”.

Comparison Made to Peru’s Dynacor, Gainey Capital Even Better

Jay Taylor made a compelling comparison between Gainey Capital and Dynacor, based in Peru. Dynacor has proven the business model of toll milling for strong cash flow and deploying that cash into exploration & development. However, Gainey has a market cap that’s one third that of Dynacor and Mexico is a safer location to do business than Peru. Make no mistake, I like Dynacor a lot and think that stock could double in the 12 months. Gainey Capital hopes to expand Mill capacity to 600 tpd. Coburn believes an expansion to 600 tpd could be accomplished within 6 months at an all-in cost of just C$100k-C$200k.

In a prime example of under-promise and over-deliver, Coburn’s team got its 100% owned processing facility up and running in June without fanfare. Instead of a grand press release, Coburn has been methodically operating the plant and, importantly, testing local ores, to work out the kinks. While Coburn is not prepared to discuss the profitability of the 300 tpd facility, he has every indication that profitability should be robust. As a proxy, investors have publicly available data on Dynacor’s gold processing facility. That plant is fed with higher grade material than Gainey’s facility has access to, but Dynacor’s facility reported net income in 2013 of C$9 million. That C$9 million was ENTIRELY from toll milling third party ores.

If Gainey could reach a run-rate of just half of that amount, C$4.5 million of profit on a C$19 million market cap, that alone would be a solid outcome. However, with margins possibly rising next year if the company starts processing its own ore AND with throughput possibly doubling to 600 tpd, Gainey could be looking at annual run-rate profits of greater than C$4.5 million next year, without selling a single share of stock or borrowing any money. Did I mention that I like this story very much?

Tight Capital Structure, Zero Debt, C$ 3 Million of Cash, Surrounded by Majors….

What’s not to like? Gainey is sitting on C$ 3 million in cash, it should be cash flow positive in August, it has no debt and a tight capital structure with 42.4 million shares outstanding. Of that amount, 19.2 million shares are in escrow from 1-3 years. The basic market cap at C$ 0.45 per share is C$ 19 million, again with zero debt and C$ 3 million of cash on hand. That’s an Enterprise Value, “EV” (market cap minus cash + debt) of C$ 16 million.

Mexico is a top mining jurisdiction and there are several well known players nearby including Primero, First Majestic, Great Panther and Goldcorp. Unlike many juniors who are out of cash and increasingly desperate to sell out to a major, Gainey is in the opposite position. Not only does Gainey not need to turn to larger neighbors for help, those neighbors may turn to Gainey as some have highly prospective, non-core properties to sell…. Properties that are worth a lot more to Gainey because it owns the only gold processing facility in the region to include a gravimetric/flotation processing center, which optimizes gold and silver recovery rates. Yes, I know, I already said that, but it’s worth repeating.

Opportunity For Near-Term Production

How many times have I heard this, “near-term production.” Near-term appears to range from next month to next decade! How close is Gainey to first production of its own ore? The company could begin mining ore from an owned, fully permitted property within about 6-9 months. This could be a potential game-changer, especially if the company expands to 600 tpd of processing capacity before that time. Again, all of this could be achieved with no additional shares or debt.

Dynacor is printing money in Peru and deserves the praise it receives for operating a highly successful toll milling business model. To reiterate, Dynacor is ONLY toll milling third party ore, exactly like Gainey is. If Gainey can double capacity to 600 tpd AND start to process its own mined ore, upside on the stock could be significant. NOTE: This is my opinion only. Coburn will continue to take things one step at a time, under-promising and over-delivering

That means making sure the existing 300 tpd facility is running at high efficiencies. It means doing some further work on its owned, permitted property that might have three mineralized veins, not just one. It means signing toll milling customers to fill the 300 tpd mill and possibly installing a new ball mill to expand to 600 tpd. This is not pie-in-the-sky long-term dreams… this is highly actionable neat-term activities that should cause the stock price to rise.

Conclusion

Investors in natural resources stocks have had a rough 2-3 years. Hundreds of junior miners are out of cash and out of time. They are desperate to be acquired or are looking at continued equity dilution for years to come. Gainey Capital breaks the mold, it’s entirely different. Gainey has all the blue-sky upside of a junior miner, but is poised to be cash flow positive, has no debt, no need to raise additional equity and is sitting on C$ 3 million of cash. Run-rate annual profits could exceed C$4.5 million next year for a company with an EV of C$ 16 million as CEO David Coburn executes on specific, relatively low-risk operating plans in a proven, low-risk jurisdiction.

To access the Gainey Capital Corp. corporate presentation, click here