Financial Press » FP Exclusives http://financialpress.com Breaking Business, Financial & Economic News Headlines Tue, 21 Oct 2014 17:32:17 +0000 en-US hourly 1 Smart Money Flows Into Copper http://financialpress.com/2014/10/15/smart-money-flows-into-copper/ http://financialpress.com/2014/10/15/smart-money-flows-into-copper/#comments Wed, 15 Oct 2014 14:30:28 +0000 http://financialpress.com/?p=45906 Doubleview Capital Drills 30 Kilometer Copper-Gold Trend–

By Financial Press

The smart money is flowing into copper. Lundin Mining (LUN-TSX) just agreed to pay $1.8 billion to buy the Candelaria copper mine in Chile. Mining legend Frank Giustra recently purchased 19.9% of Catalyst Copper (CCY-TSX.V). Last month, Mexican metal tycoon Germán Mota-Velasco spent $25 million of his own money buying up shares of Southern Copper(SCCO-NYSE).

As it builds on a fresh discovery in a prolific region of British Columbia, Doubleview Capital Corp. (DBV-TSX.V) is well positioned to attract international copper investors placing bets on the growing copper-supply deficit. Interest in Doubleview’s rapidly emerging Hat Cu-Au porphyry deposit in northwest B.C.’s Sheslay district can be expected to intensify as the company prepares to commence another round of drilling.

“The Hat Copper district is under-explored,” stated Doubleview President and CEO Farshad Shirvani in an exclusive interview with Financial Press. “It’s one of five or six major potential discovery areas in Canada. We’re on a minimum 30 kilometer long NW-SE trend that still has countless undrilled targets. And the drilling that has been done has shown an extremely high success ratio.”

Doubleview’s latest hole, HAT-022, intersected the strongest mineralization encountered at the property including a 118.4-metre interval grading 0.80% copper equivalent. Shirvani believes that there is a potential for higher grades and additional length within the Sheslay “red stock” and the zone identified earlier this year.

“The Hat Copper Project is our lead asset,” confirms Shirvani. “This is where we are focussing the bulk of our energy. There was a lot of work done by majors in the past, though no drilling, and we inherited millions of dollars of data at virtually no cost. IP and magnetic surveys revealed numerous anomalies and the initial drilling is certainly confirming that we have a very good shot at proving up a large deposit in a mining-friendly district.”

Shirvani points out that the copper values at the Hat are increasing with depth. Before the end of October the company intends to move the rig to the east of Hole 22 and commence an aggressive new drill program.

“These latest results confirm our belief that the Hat Property is an important new discovery,” stated Shirvani. “We have ample reasons to expect fresh breakthroughs as work continues. Mineralization remains open in all directions at the Lisle Zone (Anomaly “B”) where the vast majority of our holes have been drilled so far.”

DBVShirvani has recently recruited legendary geologist Patrick McAndless to the Doubleview team. The former V.P of Exploration for Imperial Metals, McAndless has over four decades in the mining industry primarily exploring for base and precious metal deposits.

“We now have seven geologists working on the Hat Project,” states Shirvani. “Pat and his team have a track record of developing similar deposits in the same region. To investors who know the local history of copper-gold porphyry exploration, the McAndless name is important. The strength of our technical team is now the equivalent to a senior mining company.”

In January of this year, Doubleview reported two discovery holes that sparked a staking rush in the area and breathed new life into the junior exploration sector in B.C. Shirvani believes this is only the beginning of much more excitement for this district which has certain infrastructure advantages not seen in other remote areas of the province.

“With each round of drilling the grades are getting better, our understanding of this system is improving, and we are building tonnage,” stated Shirvani. “Our team of geologists is unanimous in their belief that this could become a very important new deposit in northwest B.C.”

The latest 7 holes show a continuity of mineralization within the Lisle Zone. Geological, geophysical and geochemical testing have revealed highly prospective additional targets, within this zone and well beyond it, that have yet to be drill-tested.

“Just over a year ago, this was a grassroots project,” stated Shirvani. “In this challenging market, we’ve been able to execute a series of successful drill programs. We have confirmed high gold values and increasing copper values. These are still the early stages. Given the progression of this, we have every reason to believe the Hat has world class potential in a district where multiple new discoveries could be made.”

The International Copper Study Group has predicted that there will be a 466,000 tonne copper supply deficit in 2014. Copper analysts at Morgan Stanley recently stated, “We remain comfortable with our forecast for deficit conditions this year and next, as well as progressively higher prices.”

Doubleview Capital is currently trading at .17 with a market cap of $9.5 million.

Financial Press Legal Disclaimer/Disclosure to go at end of each client article:

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.

For further information please contact:

Doubleview Capital Corp.

Suite 310, 675 West Hastings Street

Vancouver, BC V6B 1N2

Farshad Shirvani

President & CEO

T: (604) 678-9587

E: corporate@doubleview.ca

 

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Elon Musk’s $2 Billion Tweet http://financialpress.com/2014/10/09/elon-musks-2-billion-twee/ http://financialpress.com/2014/10/09/elon-musks-2-billion-twee/#comments Thu, 09 Oct 2014 14:43:11 +0000 http://financialpress.com/?p=45898 Fortune Minerals’ Cobalt Mine could Feed Tesla Battery Demand; $25 Million Financing Completed to Acquire Producing Silver Mine -

By Financial Press -

The electric car company Tesla (TSLA-NASDAQ) gained about $2 billion in market capitalization after Elon Musk’s October 1 tweet that it “was time to unveil the D and something else”.

Automobile industry pundits are speculating that Tesla may reveal a new driverless technology for the Model S on Thursday evening. Musk recently told CNN that he anticipated Tesla being “90% autonomous” in 2015.

Tesla’s $5-billion lithium-ion battery Gigafactory in Nevada – is expected to increase global cobalt demand significantly, directly benefiting Fortune Minerals (FT-TSX) (FTMDF- OTCQX) which has a North American reserve of 82 million pounds of cobalt, 102 million pounds of bismuth and 1.1 million ounces of gold at its vertically integrated NICO project.

“NICO is a shovel ready project strategically positioned to meet the rising demand for cobalt from leading innovators like Tesla,” confirmed Fortune Minerals President Robin Goad in an exclusive interview with Financial Press, “We have Environmental Assessment Approvals for the mine and mill in the Northwest Territories, and also for the refinery in Saskatoon.”

A bulk concentrate will be produced at the mine for shipment to the refinery the Company plans to construct in Saskatchewan where it will be further processed to battery grade cobalt sulphate, bismuth metal and chemicals and gold. Cobalt and Bismuth are both critical metals required to service a growing world economy, and particularly for new technologies.

Currently 61% of global cobalt mine supply comes from the politically unstable Congo, and 42% of refinery production comes from China. About 80% of bismuth supply is also from China and there are concerns about supply from policy risk.

“Up to 60% of a lithium-ion battery is cobalt by weight,” stated Goad, “Generally, the more cobalt, the better the battery. Cell phones, laptops, iPads – all of these devices require batteries containing cobalt cathodes. Tesla’s Model S uses the Nickel Cobalt Aluminum cathode chemistry for its batteries containing approximately 10% cobalt.

Tesla’s first Gigafactory is expected to produce more lithium-ion batteries than the entire world did in 2013. In fact, NICO would only be able to service a portion of Tesla’s total anticipated demand at the currently projected production rate.”

Under NAFTA, Fortune’s cobalt project also has significant cost advantages over Chinese refinery production. Unlike China, the company is exempt from import duties and transportation costs to the North American market will be lower. Tesla has stated publically that it is looking to secure a North American supply chain for its Gigafactory.

The NICO project contains about 12% of the global reserves of bismuth – a critical ingredient in the automotive, electronics and plumbing sectors.

“Bismuth is replacing lead in solders and brasses, used in the electronics and the plumbing industries,” stated Goad, “But the largest use is in automobiles. It is one of the very few metals that expands when it cools, and it is therefore used in anti-corrosion coatings, castings, pearlescent paints and windshield frit – the little black dots that surround your windshield to protect the seal from changing temperatures and sunlight.”

Fortune plans to do the preliminary processing (crushing, grinding, bulk floatation) in the Northwest Territories, and then ship the concentrate via truck and the Canadian National Railway to Saskatchewan for processing – where the cost of electricity is 5.7 cents per kilowatt/hour, versus 25 cents per kilowatt/hour in the Northwest Territories, and close to reagent sources and a skilled pool of engineers and metallurgists.

Notably, Fortune is already a producing mining company after raising US$25 million financing from a production prepay facility on October 1, 2014 to complete the purchase of the Revenue Silver Mine in southwest Colorado, U.S.A.. A second tranche of US$10 million is expected to close on October 16, 2014.

“The Revenue Silver Mine is a high-grade narrow vein deposit,” confirmed Goad “In fact, it’s one of the highest grade silver deposits in North America. Approximately 80% of mine revenue is derived from silver, the rest is from gold, lead and zinc.”

The Revenue Silver Mine is located near Ouray, about 490 kilometres southwest of Denver. Underground narrow vein mines require a specialized skill-set which Fortune has access to in the local community. The mine operated between 1876 and 1912, producing approximately 15 million ounces of silver. Because of the high grade deposit, and the stable labour environment, the mine can operate profitably in the current weak metal markets.

“We have an innovative financing structure,” stated Goad, “The Lascaux Resource Capital Fund is advancing a total of US$35 million which will be paid back with interest from the mine’s metal production. This structure has minimized share dilution in an otherwise weak capital market.”

In order to keep the mine footprint small, the mill has been constructed in an underground excavation. Fortune is investing additional capital in the mine to improve safety and operational efficiencies as it ramps up to the 400 short ton per day production rate.

If the Revenue Silver Mine is the Fortune’s present, the vertically integrated NICO gold-cobalt-bismuth-copper project, and the Company’s 80% owned Arctos anthracite metallurgical coal project in B.C. are the future organic development projects to grow the business.

Fortune Minerals is currently trading at .22 with a market capitalisation of $41.85 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.

Contact:

Fortune Minerals Ltd
148 Fullarton Street
Suite 1600
London, ON N6A 5P3

Robin Goad, President, or Troy Nazarewicz, Investor Relations Manager
Phone: 519-858-8188
Fax: 519-858-8155
Website: http://www.fortuneminerals.com

 

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Frac-Sand Demand to Increase 300% by 2016 http://financialpress.com/2014/10/07/frac-sand-demand-to-increase-300-by-2016/ http://financialpress.com/2014/10/07/frac-sand-demand-to-increase-300-by-2016/#comments Tue, 07 Oct 2014 14:30:42 +0000 http://financialpress.com/?p=45887 Declan Resources Partners With Opal Energy in Firebag River Property-

By Financial Press

According to energy analyst Sonny Randhawa, frac sand demand will increase from 28 million tons to 84 million tons by 2016.

“As E&P operators seek to optimize well results, they are using significantly more frac sand per well,” confirms a recent Morgan Stanley Research report, “we believe the industry now sits on the verge of a prolonged frac sand supply shortage.”

Frac sand is a key product that stimulates the hydraulic fracturing of oil and gas wells, optimizing efficiency and flow rates.

This “picks and shovels” sand fracking space has been a recent boon to investors.

Athabasca Minerals (ABM.V) is developing aggregate and silica sand in Western Canada; AMB stock price is up 115% in the last 12 months. U.S. Silica (SLCA) produces and sells silica to the oil and gas recovery markets in the U.S.; SLCA stock price is up 154% in the last 12 months. Emerge Energy (EMES-NYSE) produces and sells industrial sand used in the extraction of oil and natural gas; EMES is up 580% since its IPO in May 2013.

On September 29, 2014 Declan Resources announced that Opal Energy (OPA.H-TSX.V) has acquired the option to earn up to a 75% interest in Declan’s Firebag River Property located southwest of the Athabasca Basin in northeast Alberta.

“The Firebag property is an industrial mineral sand project,” stated Declan President and CEO David Miller in an exclusive interview with Financial Press, “This can be a very profitable business. The frack sand lies on the surface, so it’s relatively easy to scoop it up, wash it, screen it and put it into rail cars in one tonne bags. We are very excited about the partnership with Opal and the revenue potential of Firebag.”

The option agreement requires Opal to make exploration expenditures of $850,000 prior to November 22, 2016. Opal is reimbursing Declan’s option payment, exploration expenditures and making a cash payment of $250,000 as well as issuing 4 million shares over a two year period to Declan. The end result will be that Declan has no further cash obligations on the Firebag Property but still retains a significant material interest in it.

The Firebag Property consists of six metallic and industrial minerals permits encompassing approximately 50,000 hectares. It is west of Fission Uranium Patterson Lake South (PLS) project, and about 30 kilometers south of the southernmost mapped margin of the basin. It also lies adjacent to the east of the Athabasca Minerals silica sand project.

“The economics of a project like Firebag can be vibrant, stated Miller, “With a growing demand for API standard silica sand and a large potential resource a strategic joint venture at this stage makes economic sense for us.”

photo

Declan completed an initial review of the Firebag River property in November 2013. Surface samples returned values that met or exceeded API standards for roundness, silica content and sphericity. A high percentage of the sand falls within the preferred 20/40 and 40/70 mesh sizes. The Firebag River has year round access is close to the oil and gas hub of Fort McMurray, Alberta – which is serviced by highway and rail.

The option agreement with Opal confirms Declan’s corporate strategy of monetizing and retaining partial ownership in high value projects. Miller says that the DNA of Declan is in uranium and that is why the company has chosen to spin Firebag out.

Miller is a heavy-weight in the uranium space. There have been two significant uranium discoveries in the Athabasca basin: Waterbury – a joint venture with Korean electric power corporation – and Patterson Lake South. As the former President of Strathmore and Fission Energy, Miller green-lit the acquisition of both properties.

“Ten years ago, Strathmore was one of the largest property holders in the Athabasca basin, with over 3 million acres. We are now executing the same strategy with Declan, acquiring a large portfolio of properties of which we have 100% ownership – or close to it. From this position we can put together joint ventures with Asian partners who have the capital but not the expertise to explore the basin”.

With the Firebag deal done, Declan can now earn up to 100% in over 600,000 acres within or close to the high-grade uranium Athabasca basin (Fission Uranium and NexGen have both discovered long strikes of uranium mineralisation).

Declan’s assets include the Saskatchewan properties: Paterson Lake NE, Beatty River, North Star, Maurice Creek, Big Sandy Lake and Thorburn Lake – as well as Alberta Properties: Rene Lake, Maybelle North, Jackfish Creek, Maurice Creek and Richardson River.

“We like the Athabasca Basin,” stated Miller, “But the shallower step is on the edge – so our initial focus will be there. However, with a strategic partner, we’re not afraid of undertaking projects in the center of the basin. I would rather have 20% uranium at 400 meters than .1% uranium at the surface.”

Declan recently did a geophysical survey on the Richardson River Project and discovered some interesting anomalies. They are currently getting bids from geo-physical companies to survey Davidson River.

“In this uranium basin, that is the recipe book,” stated Miller, “You start with geo-physics and from there identify drill targets. Our objectives over the next 12 months are to add more prospective properties to the portfolio and to form one or more a joint ventures with deep-pocketed Asian partners.”

Miller has long-standing relationships in the Asian uranium community. Miller has lectured on uranium geology and “in-situ” mining for the IAEA in Beijing, he maintains those contacts and others in China. Miller has also had success with North American uranium assets joint-venturing with companies in Japan and South Korea.

Declan is currently trading at .03 with a market cap of $5.11 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.

Contact:

Declan Resources Inc
1620 West 8th Avenue
Suite 302
Vancouver, BC V6J 1V4
Canada

Dave Miller – CEO
Phone: 604-639-4450
Website: http://declanresources.com

 

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$60 Trillion in U.S. Debt Bullish For Gold? http://financialpress.com/2014/09/24/60-trillion-in-u-s-debt-bullish-for-gold/ http://financialpress.com/2014/09/24/60-trillion-in-u-s-debt-bullish-for-gold/#comments Wed, 24 Sep 2014 13:45:43 +0000 http://financialpress.com/?p=45864 Phoenix Gold Drills Next to Newmont Gold Mine -

U.S. government debt has surged $1 trillion in the last 12 months, which combined with U.S. business and personal debt, has now reached a mind-boggling $60 trillion – 25 times the total debt that existed when the U.S. uncoupled from the gold standard in 1971.

If rampant money printing leads to the global devaluation of paper currency there will be a frenzied flight to gold benefiting junior explorers like Phoenix Gold (PXA-TSX.V) currently drilling on its 100% owned Plumas Property, an outcropping gold-silver mineralized system that has seen limited underground historical mining, and is now being drill tested for the first time.

The Plumas Property is located adjacent to Newmont’s (NEM-NYSE) Phoenix-Fortitude Gold/Copper Mine in Nevada’s Battle Mountain District.

On September 17, 2014 PXA released drill results from the first 3 drill holes confirming veined and disseminated sulphides which, along with the coincident magnetic anomaly, suggests the potential for a significant mineralized sulphide system at depth.

The first drill hole (CPL-1) located at the southernmost end of a large area of a significant mineralized system intersected numerous gold zones with 0.25 g/t gold over 45.5 feet including 9.44 g/t gold and 116.8 g/t silver over 0.9 feet.

The second drill hole (CPL-4), located 200 feet north of CPL-1, intersected numerous gold zones, including 0.85g/t gold over 9 feet and 0.41 g/t gold over 34.5 feet with 3.37 g/t gold over 1.5 feet, and 0.35 g/t gold over 46.0 feet with 2.44 g/t gold over 1.5 feet.

The third hole (CPL-7), located about 200 feet north of CPL-4, provided assays for about two-thirds of the hole with additional assays pending.  The results received so far for CPL-7 intersected numerous gold zones including 2.21 g/t gold and 16.8 g/t silver over 2.5 feet, 2.68 g/t gold over 4 feet and 15.85 g/t gold and 938 g/t silver over 2.0 feet.

“The market is looking for high grade intercepts,” stated PXA CEO, Glenn Laing, in an exclusive interview with Financial Press, “But when you start drilling into a big system, it’s impossible to figure out what you have with just 3 holes.  We have just begun to explore a large mineralized system on the Plumas property.”

Based on the assay results and geology and structural analysis, PXA believes that the size of the known mineralized sulphide system is increasing. The PXA geological team is confident of a relationship between sulphide mineralization in the drill holes and the magnetic anomaly.

“I am convinced this is a large unexplored system which we just starting to understand,” stated Laing, “The composition of the sulfides we are finding is indicative of a very large mineralised deposit.  Obviously with a large complex system, it takes multiple holes to get a clear picture.”

PXA 1

Further drill results are pending.  Hole CPL-7 has been completed by a further 298 feet to a depth of 937 feet; hole CPL-8 has been completed to a depth of 988 feet; hole CPL-10 is complete to a depth of 497 feet and CPL-9 is targeting the Plumas fault system and is planned for 800-900 feet to further test the extent of the sulphide related system.

“You got a lot of day traders who don’t trade on fundamentals,” confirms Laing, “Typically they get panicked when the first grade is not spectacular, which creates a buying opportunity investors who understand how precious metal projects are developed.”

Laing’s geological team believes that the magnetic signature is a significant indicator.  The company will continue drilling into the system to expand it.  The first three holes did not go deep and PXA plans to explore the deeper mineralized zones.

On August 28, 2014 PXA closed $374,500 of the planned $750,000 Private Placement.  The company expects to complete the balance of the private placement by approximately the end of September 2014.  Proceeds will be used for the current drill program and associated exploration and development expenses.

Gold mining in Nevada is one of the largest sources of gold in the world, with total historical gold production from Nevada (1835 – 2013) of over 153 million ounces.

“What is happening with the Plumas project is not wildly different from the early development of the Newmont’s Phoenix-Fortitude Gold/Copper Mine,” stated Laing, “They started with a high grade zone – but the long term value was in the lower grade mineralization at depth.”

PXA is currently trading at .045 with a market cap of $1.6 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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Is HempOmega™ the New Coconut Water? http://financialpress.com/2014/09/24/is-hempomega-the-new-coconut-water/ http://financialpress.com/2014/09/24/is-hempomega-the-new-coconut-water/#comments Wed, 24 Sep 2014 13:15:26 +0000 http://financialpress.com/?p=45859 Omega nutritional market arguably the largest supplement market category in the world -

Naturally Splendid Develops HempOmega™ Superfood Line -

In the last decade, sales of coconut water have gone from zero to over $1 billion USD, driven by its mystique as a super-hydrating natural health drink. HempOmega™, a patented, water soluble, plant-based omega product has the potential to grip the consumer’s imagination – and wallet – in the same way.

Naturally Splendid  (NSP - TSX Venture) (NSPDF – OTCQB) (50N – FRANKFURT) – a Canadian Superfood manufacturer is on the leading edge of this “Superfood” trend.  Superfoods are food products considered “beneficial to your health”. The Company is developing products and markets for HempOmega™ and has just received its first commercial production run – one metric tonne of the patented hemp-based omega 3 product.

Omega nutrition provides multiple health benefits, including: weight loss, increased energy, lowered cholesterol and blood pressure, faster recovery from disease or injury, reduced inflammation and improvement in circulation and immune system. Product testing for HempOmega™ has been carried out in conjunction with the BC Cancer Research Agency.  The initial study confirmed that HempOmega™ displayed superior “bio-availability” and stability to “control sample” vegetable oils – which can often be degraded by sunlight and oxygenation.

The omega nutritional market is arguably the largest supplement market category in terms of dollars generated annually. Packaged Facts puts the omega-3 products market at about $24.4 billion (€19 billion) in 2011.
According to Packaged Facts, a 2010 Gallup study of nutrient knowledge and consumption found that in 2011, 34% of shoppers chose products because of their omega-3 content.
Frost & Sullivan, a global growth consulting firm, believes the global omega-3 ingredient market grew to $1.89 billion in 2011, up from $1.68 billion in 2010.

Double-digit growth is forecast from 2012 to 2016.
According to Euromonitor International, the retail value sales of foods (including milk formula) and drinks with added omega fatty acids reached $30 billion in 2012.
Sales of foods/beverages carrying an omega-3 claim reached $1.8 billion in U.S. supermarkets in 2011 (Nielsen, U.S. Healthy eating trends: part 1. Jan. 26. 2011.)

In an Ipsos Reid survey conducted by BioAccess, Canadian respondents showed that a full 80% of Canadians are influenced to buy a product if it contains omega-3 fatty acids.

The Hartman Research Group determined that 52% of Americans are currently attempting to increase their intake of omega-3 ingredients – and HempOmega™ has the potential to be a powerful delivery mechanism.  In Canada, there has been a 1,700% growth in consumption of omega-3 natural health products in the last ten years.

Following years of development at their base at the University of British Columbia, Boreal Technologies, NSP’s technology partner, has commenced production of the plant based omega 3 product-line. It will be available as an additive to existing food products and beverages as well as a stand-alone omega 3 supplement.

To date approximately $16 million has been spent by Boreal developing technologies and products and NSP has secured exclusive North American rights to market HempOmega™ and H2Omega™, as well as the FlaxOmega™, CanolaOmega™, and ChiaOmega™.

Boreal’s Chairman, Charles Brink, is a veteran of the functional food and beverage industry. His recent business venture was the creation of a consumer products company that reached $1 billion in sales in less than four years.

Boreal’s technology delivers omega nutrition more efficiently to the human digestive system, offering increased bioavailability and sustainability. The proprietary manufacturing process transforms nutritious but insoluble hemp oil into a stable, aqueous suspension, or converts it into a fine, dry powder.

In an exclusive interview with the Financial Press – Naturally Splendid CEO Craig Goodwin states, “The opportunities for HempOmega™ continue to expand. Beyond human food, there are significant commercial opportunities present in livestock feed and pet food markets. Longer term potential exists for the inclusion of HempOmega™ in aquaculture, cosmetics, cosmeceuticals and nutraceuticals. Our exclusive marketing rights for these breakthrough omega 3 products, which includes HempOmega™, extends North America wide.”

Naturally Splendid plans to conduct research and product development specifically targeted for the pet food market at the Food Science and Technology Centre located in Brooks, Alberta. The center will develop optimized pet food formulations and processing capabilities followed up with nutritional and performance testing at an approved lab. The goal of this study is to develop pet superfoods fortified with HempOmega™ in order to provide optimum nutrition for pets and participate in this multi-billion dollar market.

In addition, tests were recently conducted at the University of Manitoba by Professor James House. These studies confirmed the effectiveness of HempOmega™ in feed for chickens resulting in a significant increase of over six times (6X) the omega 3 levels found in eggs of chickens that consumed a current commercial feed product. As well, the actual meat of the chickens showed over three and a half times (3.5X) increase in levels of omega 3. Astonishingly, while increasing the ‘good fats’ (omega 3&6), testing showed that the ‘bad fats’ (transfats) were actually reduced.

Importantly, these tests have also proven Boreal’s ability to convert plant-based omega oils into powder and aqueous forms without changing the composition of the oil, leaving all the benefits of omegas intact. Boreal’s HempOmega™ powder has clinically demonstrated enhanced nutritional integrity.

Boreal’s scientists have discovered that omega oils are problematic because of their lack of stability, and limited end-uses. NSP’s intention is to deploy omegas in a new format, and that is where HempOmega™ comes in.

“With a water soluble powder, we can create differentiated products and sell them to a wide spectrum of end-users”, states Goodwin. “This product is easier to handle, ship and store and will have an extended shelf life over the basic oil. We hope to change the nutritional standard. So that the omega symbol “Ω” is not just used as a marketing tool associated with trace amounts of omega. Our products will contain meaningful quantities of omega offering nutritional value and measurable positive health outcomes.

Goodwin continues to say, “The wholesale market for HempOmega™ will not only complement our healthy offerings, it has the potential to surpass our retail line by a wide margin. We are focusing on retail now to build a solid business platform and generate cash flow to support our vision for biotech food solutions. We will continue to build the retail line to support the R&D side, it’s good synergy. We’re penetrating retail chains with our current NATERA brand products, and using the cash to develop new, innovative products like HempOmega™ that we expect will generate significant interest in the bulk sales category.”

Thrifty Foods, Vancouver Island’s largest grocery retailer, will be carrying select products from the NATERA™ hemp-based superfood line throughout its entire retail chain. Thrifty Foods is a division of Sobeys who is already carrying the line.  NATERA™ products can be found in large retailers such as: London Drugs, Save On Foods, PriceSmart Foods, HomeSense, Winners, Urban Fare and Nature’s Fare Markets.

Goodwin and his team are also exploring the concept of commercializing HempOmega™ in the pet and livestock food sectors, linking the nutritional benefit in commercial animal production to potential health benefits in pets.

Consumer demand for pet food, health and wellness products, grooming and pet related accessories is growing at a rate of 4% annually according to Packaged Facts. The overall market in Canada for pet related items reached $6.6 billion in 2012 and is expected to grow to $8.3 billion by 2018.

This macro trend toward Omegas and healthy eating can be observed in the share price of healthy food companies like United Natural Foods (UNFI-NASDAQ) and Whole Foods Market (WFM-NASDAQ) – up 300% and 350% respectively in the last 5 years. Annie’s Organics, (BNNY), a retailer of healthy product lines, was recently purchased by General Mills for $820M.

The global functional food market has exploded from $164 billion in 2007 to a projected $240 billion in 2014.

Naturally Splendid (NSP) is currently trading at $0.25 with a market capitalisation of $10 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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Cannabinoids Create Log Jam at U.S. Patent Office http://financialpress.com/2014/09/18/cannabinoids-create-log-jam-at-u-s-patent-office/ http://financialpress.com/2014/09/18/cannabinoids-create-log-jam-at-u-s-patent-office/#comments Thu, 18 Sep 2014 13:40:56 +0000 http://financialpress.com/?p=45823 GeoNovus Launches Innovative Cannabinoid Initiative in Uruguay -

There are 5,000 pending patents on different cannabinoid compounds at the U.S. Patent Office – most of them registered by Pharmaceutical companies who are intending to commercialise the naturally occurring compound found in the Cannabis Sativa.

GeoNovus (GNM-CSE) (GMINF-USA) is a Canadian company positioning itself to benefit from a research explosion that is expected to drive the legal marijuana market from $1.53-billion in 2013 to $2.57-billion by the end of 2014.

On June 26, 2014 GeoNovus announced that it has signed a letter of agreement with a Uruguay company actively working in multiple areas of the medical marijuana, industrial hemp and cannabinoid science industries to develop products for consumer use.

The initiation of the agreement within Uruguay gives GeoNovus pioneering and exclusive rights to acquire and participate in multiple business ventures in Uruguay including: growing facilities, cannabinoid product development, medicinal trials and industrial hemp product development.

Uruguay recently became the first country in the world to legalize the sale cultivation and distribution and consumption of cannabinoids in December of 2013.

“I got involved with medical marijuana in 2001, when my mother was diagnosed with ovarian cancer,” stated Julian Strauss, GeoNovus Uruguayan Operations Manager in an exclusive interview with Financial Press, “we discovered it had medicinal properties not available from conventional drugs.”

In Vancouver, BC Strauss collaborated with researchers from the University of British Columbia and formed a compassion club, developed “partial decarboxylation delivery systems” for patients dealing with painful side-effects of therapeutic treatments for multiple sclerosis and cancer. The club organised informal trials, and the results went off the charts.

“At that point I started reaching out to doctors,” stated Strauss, “We collected patients, grew medical marijuana, created oil extracts and collaborated with health authorities and doctors. It was impossible grow enough marijuana to satiate the demand for medicinal oils.”

The team created proprietary collection systems to produce oils on an industrial level, anticipating that Canada would deregulate, and they could begin human trials with the developed intellectual property or “IP”.

“The de-regulation did not come in a way that was helpful to us,” stated Strauss, “The narrative in Canada changed to guys in dread-locks promising to save the world. So I got on a plane to Uruguay and began discussions with the Latin American scientific community, and also with regulators and legislators. We are now building a legal and logistical framework for the development and commercialisation of cannabinoids in partnership with Uruguayan government bodies, universities, and growers clubs.”

Strauss believes the quickest route to cash flow in the marijuana industry is by creating infrastructure for clinical hemp and marijuana trials, and then creating protocols for lab studies, full-spectrum therapies, chemical and mechanical fiber analysis.

“The 5,000 pending patents tell the story,” stated Strauss, “Research into the uses of cannabinoids is about to explode. We can offer entrepreneurial companies an environment to collect data, run trials and ultimately register intellectual property. For providing this service in Uruguay, our company will maintain a royalty percentage. We believe there is a great financial opportunity in helping to legitimize cannabis technology companies.”

“Dry cannabis is a smokescreen thrown up to regulate the medicinal value of cannabis,” explains GeoNovus President Michael England, “This is not where we see the big business opportunity. There is a $200 billion dollar industry waiting in the wings for deregulation. We intend to create manufacturing protocols for specific pathologies. By establishing operations in Uruguay, we can get in on the ground floor.”

Cannabinoids are one of the only compounds in nature that naturally break down the blood barrier in the spine and brain. MRIs and CAT scans of the body’s reaction to therapeutic treatment confirm the endless potential for hemp-based homeopathic remedies.

“Every pharmaceutical company in the world is creating allopathic carbon-based lab derivatives of cannabinoids to try and mimic the natural function found within the plant’s genome,” stated England, “But natural cannabinoids are the answer, and for that they will need a scientific and regulatory environment that promotes experimentation and clinical trial. Uruguay provides us with all of these factors as well as access to a significant pool of professional expertise – Big Pharma will be taking notice.”

Therapeutic cannabinoid treatments for all types of ailments from multiple sclerosis and cancer to headaches and seizures are quickly becoming a popular alternative to traditional chemo and medicines. Ground-breaking cannabinoid research being conducted by companies like GeoNovus in “Cannabis friendly” countries like Uruguay will pave the way for the future of these emerging alternative therapies.

GeoNovus is currently trading at $0.04 with a market cap of only $2 million under the symbol GNM on the Canadian Securities Exchange (CSE) and GMINF in the USA.

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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Leading Diamond Explorer Advances Two of Industry’s Most Promising Projects http://financialpress.com/2014/09/18/leading-diamond-explorer-advances-two-of-industrys-most-promising-projects/ http://financialpress.com/2014/09/18/leading-diamond-explorer-advances-two-of-industrys-most-promising-projects/#comments Thu, 18 Sep 2014 12:30:37 +0000 http://financialpress.com/?p=45811 Diamond Valuation Results Could Be Game Changer For North Arrow Minerals -

A bulk sample from the largest diamondiferous kimberlite pipe in the eastern Canadian Arctic is scheduled to arrive in Montreal next week. Diamond processing will be conducted throughout the fall before the final parcel makes its way to the diamond capital of the world, Antwerp, Belgium, for an official diamond valuation.

The sample contains over 1,500 tonnes of ore from a 12.5-hectare kimberlite referred to as Q1-4. The kimberlite is one of 8 pipes already discovered at North Arrow Minerals’ (TSX-V: NAR) and Stornoway Diamonds’ (TSX: SWY) Qilalugaq project, one of the most anticipated diamond exploration projects in the industry.

North Arrow 1

Qilalugaq, meaning “beluga whale” in Inuktitut, holds 7,000 hectares of contiguous mineral claims in northeastern Nunavut, and the Q1-4 pipe in itself already has a considerable mineral resource of 48.8 million tonnes equating to an inferred resource of over 25 million carats of diamonds.

The pending diamond valuation is perhaps the most significant catalyst since BHP Billiton originally staked the property in 2001. An official diamond valuation will accompany official tonnage and grade estimates providing the final data point needed to extrapolate the potential economic value of Q1-4 and the Qilalugaq project as a whole.

Qilalugaq has flown under the radar as described by North Arrow CEO Ken Armstrong in an exclusive interview with the Financial Press, “Qilalugaq has never really been anyone’s primary project so it hasn’t had the profile it might otherwise have had, if say a junior company had made the initial discovery.” Armstrong added, “Q1-4 is rather unique in terms of its size and location near the ocean.”

Q1-4 is estimated to hold 53 carats per hundred-tonnes, meaning a report from Antwerp indicating an average diamond value of $200 per carat would value the Q1-4 resource at over $5 billion; $400 per carat would value the resource at over $10 billion. Not a bad potential return for North Arrow’s $3.7 million investment in the mini-bulk sample that also secures the company an 80% stake in the project from joint-venture partner Stornoway.

Economically mined Canadian diamonds tend to be valued at $100 to $500 per carat, so a $200-400 valuation is certainly not out of the question. Its worth noting that a unique occurrence of fancy colored yellow diamonds at Q1-4, recovered in earlier stage sampling, could aid in boosting Q1-4’s valuation towards the higher end of the above range.

North Arrow 2

Diamonds recovered in early stage sampling at Q1-4. Image: North Arrow Minerals

While Qilalugaq is considered one of the Canadian diamond industry’s primary and most important projects, North Arrow (80%) and partner Stornoway (20%) are also aggressively progressing Canada’s newest diamond discovery, the Pikoo project.

In July 2013 North Arrow discovered kimberlite after successfully hitting 9 out of 10 drill targets on the 33,000-hectare eastern-central Saskatchewan property. After the discovery, North Arrow stock subsequently rallied 40%.

The primary kimberlite discovered, referred to as PK 150, has since shown very encouraging signs with a 209 kilogram sample returning 745 diamonds, 23 diamonds of which were greater than 0.85 millimeters and considered “commercial” sized diamonds.

North Arrow is currently processing over 440 Pikoo till samples that were collected over the summer. At the time of writing, 40% of the till sample results had been received by the Company. Reportedly, new and distinct trains of kimberlite indicator minerals are emerging from the results which suggest Pikoo could host multiple diamond bearing kimberlites similar to PK 150, which could greatly increase the possible economic viability of the project.

Recently financed North Arrow has plans for a 3,000 meter, $1 million-plus, drill program at Pikoo this coming winter.

The Canadian diamond industry has been buzzing with activity this year as Stornoway successfully financed its $900 million Renard mine in Quebec, and Mountain Province Diamonds (TSX: MPV) progresses construction at its mine, Gahcho Kué, which is estimated to eventually be the 7th largest diamond mine in the world. In addition, high-end diamond cutter and polisher Deepak International finalized a deal to purchase a polishing plant in Yellowknife along with the exclusive rights to the Polar Bear brand, a bid of confidence in the secular demand for Canadian diamonds.

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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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.

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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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