Monday, July 7, 2014

The TSX Venture looks to be poised for a rebound soon - with the chart and pattern already bucking trends of the usual "summer doldrums".

Here are some great ideas for the Sept-March PDAC bull run that might be coming soon.

1) Western Lithium (WLC:TSX)
Remember this old name? After its meteoric rise to fame back in 2009 backed by Small Cap Ventures, the longtime US favorite lithium junior got a nice rebound and closed a financing after Tesla (TSLA:NYSE) announced a $3 billion dollar plant.
Props to management team and longtime CEO Jay C for innovative product such as OrganoClay which is based off the hectorite clay at King Valley. Way to keep the company going until mainstream lithium comes back!

Western Lithium Announces the Closing of CDN$9.2 Million Bought Deal Offering

Western Lithium USA Corporation (“Western Lithium”, the “Company”) (TSX:WLC) (OTCQX:WLCDF) is pleased to announce that it has, today, closed the previously-announced bought deal offering with Dundee Securities Ltd., on behalf of a syndicate including Haywood Securities Inc. (together, the “Underwriters”), with RK Equity Capital Markets LLC acting as a U.S. Placement Agent.  The offering consisted of 15,870,000 units of the Company (the “Units”) at a price of CDN$0.58 per Unit for aggregate gross proceeds of CDN$9,204,600 (the “Offering”), which includes those Units issued on the exercise in full by the Underwriters of their over-allotment option.
Each Unit consists of one common share (“Share”) of the Company and one-half of one common share purchase warrant.  Each whole common share purchase warrant ("Warrant") entitles the holder thereof to acquire one Share at a price of CDN$0.75 for a period of 24 months following the closing of the Offering.  The Units were offered in all provinces of Canada (except Quebec) by way of a short form prospectus.
The Company’s current cash balance is approximately CDN$16.6 million after giving effect to the net proceeds of the Offering of approximately CDN$8.4 million.  The Company intends to use the funds available to it for the completion of the organoclay manufacturing plant in Nevada, which is scheduled for commissioning in the fall of 2014, the procurement of the equipment and operation of the Lithium Demonstration Plant in Germany in the fourth quarter of 2014 and for working capital and general corporate purposes.
This news release does not constitute an offer of securities for sale in the United States.  The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.

2) International Lithium (ILC:TSXV)
Not too many lithium juniors out there who can claim a joint venture with a large customer / Chinese battery company. Proof is in the deal and we are surprised this ILC deal is hanging around $0.04. Possibly a bit too more shares than most lithium co's but at $0.04 it's certainly a bargain for a reasonable % ownership of a lithium pond in Argentina. Other projects in Ireland and both will see some development this year from the JV partner, Ganfeng Lithium.

Int'l Lithium JV budgets $2.64-million for exploration

2014-06-18 14:51 ET - News Release

Mr. Kirill Klip reports
The board of directors of Ganfeng Lithium Co. Ltd., a partner of International Lithium Corp., has approved a 2014 annual mining exploration budget for wholly owned subsidiary GFL International Co. Ltd. of 15 million yuan (approximately $2,645,000). The funds were approved at a board meeting held on June 5, 2014, and will account for expenditures on the Blackstairs and Mariana projects collectively.
"We are encouraged by Ganfeng Lithium's approval of this exploration budget. These projects are a potential source of raw materials for GFL's manufacturing operations, and we are officially making headway moving them along in accordance with our initial vertical integration model," said Kirill Klip, president, International Lithium.
We seek Safe Harbor.

3) Energold Drilling Corp (EGD:TSXV)

The quiet drilling company that could. Most analysts and investors seem to have overlooked the energy services division of Energold.
Q1 results came out late May and since the news stock jumped from $1.50 to nearly $2. Currently at $1.80 - and by our basic calculation even net book value and tangible assets are worth nearly $1.50 along, not to mention the nearly $0.50/share in cash they have on books.

Pick up some at these levels and when mining recovers these guys should be a leading indicator for the health of the sector. Wasn't long ago this was a $5-6 stock. Business has only grown but outlook on mining has this down in the dumps.

Comparables we like - Geodrill (GEO:TSX) and Major Drilling (MDI:TSE).
Foraco (FAR:TSX) is too debt heavy and only has focus on mining - which means short term there'll be more pain.

May 29, 2014
Energold Drilling Group Announces First Quarter 2014 Financial Results

 Energold Drilling Corp. ("Energold" or "the Company") announces first quarter revenue in 2014 of $37.0 million across four business divisions, representing a 31% decrease over first quarter 2013 revenue of $53.9 million. Lower year over year revenue is due mostly to the decline in the mineral drilling segment although the Company realized strong offsetting results in the energy business. These results highlight the successful diversification objectives made by the Company over the last several years.

Gross margin for the quarter was 29% on a Company-wide basis compared to 30% in the same period in 2013. Net earnings per share for the quarter was $0.03 compared of $0.08 in the first quarter 2013. The Company's overall gross margin reflects the energy division's typically strong first quarter activity levels and associated operational efficiencies made in previous periods, allowing for a strong profit in the quarter. The adjusted net earnings** in Q1 was $1.8 million or $0.04 per share compared to net earnings of $7.3 million or $0.15 per share in 2013.

The first quarter is historically one of the slowest periods in mineral drilling for the Company due to the weather conditions in South America and the ramp up from low activity levels after the holiday season. Meanwhile, the diversification efforts made by management over the last several years continue to prove beneficial to shareholders as the Company's oil sands coring business operated at near 100% capacity in northern Alberta during the period. Strong profit for the energy division in the first quarter reflected ongoing efforts to contain costs as management seeks to reduce downtime and associated start-up costs on a go forward basis. The manufacturing division's contribution during the period reflects the typical seasonal effects in that business, where the beginning of the year involves bidding on new contracts with a ramp up in output and revenue recognition occurring in the second half of the year.

Energold's balance sheet for Q1 2014 remains well capitalized with $20.6 million in cash and $75.1 million in working capital.