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Research Reports

Steppe Gold Limited (TSX: STGO / OTC: STPGF) Extended Mine Life With an Updated Resource

An updated resource estimate reflected an 82% increase to 2.45 Moz Au Eq (gold equivalent) vs the 2017 reserve/resource estimate of 1.35 Moz. 88% of the 2021 resource is in the M&I category. The significant increase in resources was a result of resource expansion at ATO-4 (one of three known mineralized pipes), inclusion of a maiden resource at Mungu, and lower cut-off grades amid higher gold prices.

Monarch Mining Corporation (TSX: GBAR) – Formed After Selling Predecessor Company to Yamana for 5x Return – Initiating Coverage

Monarch Mining (“Monarch”) was spun-out from Monarch Gold, which was acquired by Yamana Gold (TSX: YRI) for $152M in December 2020. Yamana acquired Monarch Gold’s Wasamac property and the Camflo mill for $61M in cash, and $91M in shares.Prior to the acquisition, four advanced stage gold assets, and the Beacon mill, in the Abitibi mining camp in Quebec (valued at $47.5M), and $16M in cash, were spun-out into newly formed Monarch Mining. The assets sold to Yamana were part of a portfolio acquired from Richmont Mines in 2017 for just $25M. The sale to Yamana reflected a return of over 5x in under four years. Monarch Mining is run by the same team that ran Monarch Gold.

Capital Direct I Income Trust – Minimally Impacted by the Pandemic / Lowers Risk Profile

Despite the pandemic, Capital Direct expanded its mortgage receivable by 21% YTD to $243M, across 1,697 properties, by the end of Q3-2020. The company maintains its spot among the 15 largest mortgage investment entities in Canada.Due to lower lending rates, and slightly higher losses (0.28% of portfolio in 2020-9M vs 0.24% in 2019), annualized dividends declined in 2020 (9M) to 6.9%, from 7.4% in 2019 (full year). We expect yields to increase to 7.2% in 2021.

ION Energy Ltd. (TSXV: ION / FRA: 5YB / OTC: IONGF/ OTCQB: IONGF) – Preparing for the First Ever Lithium Brine Drill Program in Mongolia – Initiating Coverage

ION’s share price is up 47% since our introductory note on December 16, 2020. The company is recipient of Mongolia’s first ever exploration license for lithium brine.ION’s project is strategically located just 24 km from the border with China – the world’s largest Electric Vehicle (“EV”) and battery manufacturer.

South Star Mining Corp. (TSXV: STS / OTCQB: STSBF) Receives Mining License / Advancing to Production Next Year

On January 6, 2021, STS announced receipt of a three-year mining license for its 100% owned Santa Cruz graphite project in Brazil.STS has all the required permits to advance to construction, commissioning, and production.Management intends to develop the project in two phases: a Phase- 1/5,000 tonne per year (“tpy”) pilot plant operation (with a CAPEX estimate of US$7.3M) in the first two years, followed by a larger 25,000 tpy Phase 2 operation (US$27.2M CAPEX).

Apple Inc.(NASDAQ: AAPL) – Q1 Earnings Beat Expectations / Stronger than Expected Sales in China

We are raising our revenue forecasts for FY2021, and FY2022, on the back of faster growth from iPhone sales as well as strong contribution from wearables, home and accessories, and services. We expect iPhone sales to remain strong on continued consumer upgrading, as 5G networks have yet to be fully implemented across the globe. As a result of our higher revenue/EPS projections, and higher sector-average valuation metrics, we are raising our fair value estimate by 21% to $148.12, suggesting a potential return (including dividends) of 8.3% in FY2021.

Microsoft Corp. (NASDAQ: MSFT)-Strong Q2 / Growth Potential Already Priced-In

Q2 revenue was mainly driven by 51.2% YoY growth in the gaming segment coupled with sustained revenue growth in server products and cloud services (25.8% YoY). We expect server products and cloud services to sustain growth momentum as we believe flexible work arrangements will continue to be part of business operations post-pandemic.

Banxa Holdings Inc. (TSXV: BNXA)-Cryptocurrency Payment Solution Company’s Share Price up 2.5x After Going Public Yesterday – Introductory Note

We are introducing Banxa Holdings Inc. (“company,” “Banxa”), a Payment Service Provider (fiat-to-crypto and vice versa) (PSP) company based in Australia. Banxa went public yesterday through a reverse-takeover of a TSXV listed capital pool company. Banxa provides an international compliant solution enabling customers to engage in fiat-to-crypto as well as crypto-to-fiat transactions. The company targets both consumers (“B2C”) and businesses (“B2B”) in over 130 countries. Its solution permits the exchange of fiat currencies into bitcoin and other cryptocurrencies, and vice versa.

Universal Ibogaine Inc.-Focused on New Treatment for Opioid Addiction and Other Substances Going Public – Introductory Note

In this note we are introducing Universal Ibogaine Inc. (“UI”), a privately held company building an addiction treatment business. UI plans to file a Clinical Trial Application with Health Canada by mid 2021, as well as open ibogaine based psychotherapy centres in jurisdictions where ibogaine use is legal. The company is scheduled to go public through a reverse-takeover (“RTO”) transaction with a TSXV listed capital pool company. The transaction is expected to close in February 2021.

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Galane Gold Ltd. (TSXV: GG / OTCQB: GGGOF)-Ramping up Production with Easing Restrictions

With easing restrictions in both South Africa and Botswana, GG’s Q3 production increased 36% QoQ at Mupane (Botswana), and 50% at Galaxy (South Africa), and beat our expectations. We are raising our 2020 production forecast from 30.5 Koz to 32.5 Koz. Operating cost increased 5% YoY, and 2% QoQ, to $1,082/oz in Q3, and was higher than our expectations. However, gross profit increased 82% YoY, and 21% QoQ, to $790/oz, due to stronger gold prices.

QMX Gold Corporation (TSXV: QMX / OTC: QMXGF) Backing from Eldorado and Osisko Gold: Initiating Coverage

QMX Gold is focused on exploring its large land package, covering over 200 sq. km, in the Val d’Or East Mining Camp, southeast of the Abitibi Belt – one of the richest mining regions in the world. Eldorado Gold (TSX: ELD), Osisko Gold Royalties (TSX: OR), O3 Mining (TSXV: OIII), and Probe Metals (TSXV: PRB) are significant investors of QMX, and are active players in the region. We believe this creates opportunities for QMX to position itself as an acquisition candidate.

ION Energy Ltd. (TSXV: ION / FRA: 5YB)-Mongolia’s First Lithium Brine Explorer – Introductory Note

ION Energy went public through a reverse takeover in August 2020. It is the recipient of Mongolia’s first ever exploration license for lithium brine. Although the country has never been explored for lithium brine, previous studies suggest that its salt lakes hold potential for lithium. ION’s project, which is in early exploration stage, is strategically located just 24 km by road from the border with China – the world’s largest Electric Vehicle (“EV”) and battery manufacturer.

Indiva Limited (TSXV: NDVA / OTCQX: NVDAF) Wana Gummies Start Strong; Expecting Record Q4 – FINAL REPORT

In Q3-2020, Indiva reported $3M in revenue, up 1,532% YoY, and 18% QoQ, inline with our expectations. The increase was attributed to the introduction of WanaTM Sour Gummies last quarter, partially offset by a 41% QoQ decline in sales of Bhang® Chocolates due to seasonality in chocolate sales, and fewer new additions to the Bhang product line. Sales of gummies were well above our expectations, with $1.23M in revenue in the first month of sales (September), capturing 41% of the quarter’s revenue.

Inca One Gold Corp. (TSXV: IO / OTC: INCAF / FSE: SU9) Ramping up Production with Relaxed COVID-19 Restrictions

Q1-FY2021 (quarter ended July 31, 2020) production from Inca One was down 68% YoY to 1.7 Koz, and missed our expectations. From March to July, the company significantly scaled back activities as a result of the pandemic. Production has been ramping up since July. During July-September 2020, the company produced 3.5 Koz, up 81% QoQ. We expect production to continue to increase as Peru has been experiencing a decline in daily new cases of COVID-19. Despite lower sales, revenue increased 18% YoY to $6.6M in Q1 due to stronger gold prices. Gross profit was $163/oz (9% of revenue) in Q1-FY2021 vs $51 per oz (4%) in FY2020. Gross margins were well above our expectations.

Kontrol’s COVID Detection Unit Tested at a McDonald’s Location

Kontrol Energy Corp. (CSE: KNR / Current Share Price: $3.42 / FRC Fair Value Estimate: $6.72) announced today that it filed patent applications for its BioCloud technology in the U.S. and Canada. On another positive note, we found that a McDonald’s (NYSE: MCD) location in London, Ontario, gave BioCloud a test run last week. We reached out to the location’s management (ended up talking to a shift supervisor), and learned that KNR’s device was installed for a day to screen employees prior to checking in to work.

Three Point Capital Corp. Minimally Impacted by COVID-19

Three Point remains focused on first mortgages on single family residential properties. At the end of Q3, first mortgages accounted for 93% of the total portfolio. The loan-to-value (“LTV”) remains low at just 55%. The MIC has been diversifying its portfolio into Ontario (“ON”). At the end of Q3, B.C. accounted for 62%, and ON accounted for 29%.

Kaya Holdings Inc. (OTCQB: KAYS) – Vertically Integrated U.S. Cannabis Company to Tap into Growth Opportunities in Europe – Introductory Note

In this note, we are introducing Kaya Holdings Inc. (“company”, “KAYS”; market capitalization:US$6M), a U.S. based company operational since 2014. According to management, KAYS is the first publicly traded company in the U.S. to own and operate a medical marijuana dispensary. Their business model is focused on cultivating, processing, and retailing medical and recreational cannabis.

European Residential REIT (TSX: ERE.UN) A Unique Opportunity to Own European Rental Properties – Initiating Coverage

European Residential Real Estate Investment Trust (“ERES”, “company”) provides exposure to rental markets in Europe, with a focus on the Netherlands, one of the most attractive regions in Europe. The country is one of the top performing economies in the European Union, with above average per capita income, below average unemployment rate, and one of the strongest export economies.

FinCanna Capital Corp. (CSE: CALI / OTCQB: FNNZF) Starts Receiving Royalty Revenue

In Q1-FY2021 (quarter ended July 31, 2020), FinCanna Capital Corp.(“CALI”, “FinCanna”) generated $55k in revenue, of which, $44k was from royalties, and the remaining was from accrued interest (non-cash) from a loan offered to its portfolio company named CTI. Although we were pleased with the commencement of royalty revenue, they were well below our expectations. CALI reported a net loss of $0.44 million (EPS: -$0.00) in Q1. As Q1 was the first quarter of royalty revenue, we believe it is not appropriate to compare Q1’s performance with prior quarters.

Mammoth Resources Corp. (TSXV: MTH) Regrouping After Centerra Terminates Option

In September 2020, Centerra Gold Inc. (TSX: CG) notified Mammoth Resources Corp. (“company”, “Mammoth”, “MTH”) that it will not be continuing with its option agreement on MTH’s Tenoriba gold-silver project in southwestern Chihuahua State, Mexico. This move was totally unexpected as CG had recently filed a permit application to drill 139 holes, and had two drill companies bidding for a drill contract. CG stated that their decision to cease exploration was not a reflection of Tenoriba’s potential.

GMV Minerals Inc. (TSXV: GMV / OTCQB: GMVMF) Updated PEA Demonstrates Scalability and Flexibility

GMV Minerals Inc. research report: On November 3, 2020, GMV Minerals (“company”, GMV”) announced results of an updated Preliminary Economic Assessment (“PEA”) on its Mexican Hat gold project in southeast Arizona. Management decided to update a previously completed 2018 PEA to account for higher gold prices and evaluate the economics of a lower throughput/lower initial CAPEX scenario.

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Steppe Gold Limited (TSX: STGO / OTC: STPGF) Extended Mine Life With an Updated Resource

An updated resource estimate reflected an 82% increase to 2.45 Moz Au Eq (gold equivalent) vs the 2017 reserve/resource estimate of 1.35 Moz. 88% of the 2021 resource is in the M&I category. The significant increase in resources was a result of resource expansion at ATO-4 (one of three known mineralized pipes), inclusion of a maiden resource at Mungu, and lower cut-off grades amid higher gold prices.

Read More

Monarch Mining Corporation (TSX: GBAR) – Formed After Selling Predecessor Company to Yamana for 5x Return – Initiating Coverage

Monarch Mining (“Monarch”) was spun-out from Monarch Gold, which was acquired by Yamana Gold (TSX: YRI) for $152M in December 2020. Yamana acquired Monarch Gold’s Wasamac property and the Camflo mill for $61M in cash, and $91M in shares.Prior to the acquisition, four advanced stage gold assets, and the Beacon mill, in the Abitibi mining camp in Quebec (valued at $47.5M), and $16M in cash, were spun-out into newly formed Monarch Mining. The assets sold to Yamana were part of a portfolio acquired from Richmont Mines in 2017 for just $25M. The sale to Yamana reflected a return of over 5x in under four years. Monarch Mining is run by the same team that ran Monarch Gold.

Read More

Capital Direct I Income Trust – Minimally Impacted by the Pandemic / Lowers Risk Profile

Despite the pandemic, Capital Direct expanded its mortgage receivable by 21% YTD to $243M, across 1,697 properties, by the end of Q3-2020. The company maintains its spot among the 15 largest mortgage investment entities in Canada.Due to lower lending rates, and slightly higher losses (0.28% of portfolio in 2020-9M vs 0.24% in 2019), annualized dividends declined in 2020 (9M) to 6.9%, from 7.4% in 2019 (full year). We expect yields to increase to 7.2% in 2021.

Read More

ION Energy Ltd. (TSXV: ION / FRA: 5YB / OTC: IONGF/ OTCQB: IONGF) – Preparing for the First Ever Lithium Brine Drill Program in Mongolia – Initiating Coverage

ION’s share price is up 47% since our introductory note on December 16, 2020. The company is recipient of Mongolia’s first ever exploration license for lithium brine.ION’s project is strategically located just 24 km from the border with China – the world’s largest Electric Vehicle (“EV”) and battery manufacturer.

Read More

South Star Mining Corp. (TSXV: STS / OTCQB: STSBF) Receives Mining License / Advancing to Production Next Year

On January 6, 2021, STS announced receipt of a three-year mining license for its 100% owned Santa Cruz graphite project in Brazil.STS has all the required permits to advance to construction, commissioning, and production.Management intends to develop the project in two phases: a Phase- 1/5,000 tonne per year (“tpy”) pilot plant operation (with a CAPEX estimate of US$7.3M) in the first two years, followed by a larger 25,000 tpy Phase 2 operation (US$27.2M CAPEX).

Read More

Apple Inc.(NASDAQ: AAPL) – Q1 Earnings Beat Expectations / Stronger than Expected Sales in China

We are raising our revenue forecasts for FY2021, and FY2022, on the back of faster growth from iPhone sales as well as strong contribution from wearables, home and accessories, and services. We expect iPhone sales to remain strong on continued consumer upgrading, as 5G networks have yet to be fully implemented across the globe. As a result of our higher revenue/EPS projections, and higher sector-average valuation metrics, we are raising our fair value estimate by 21% to $148.12, suggesting a potential return (including dividends) of 8.3% in FY2021.

Read More

Microsoft Corp. (NASDAQ: MSFT)-Strong Q2 / Growth Potential Already Priced-In

Q2 revenue was mainly driven by 51.2% YoY growth in the gaming segment coupled with sustained revenue growth in server products and cloud services (25.8% YoY). We expect server products and cloud services to sustain growth momentum as we believe flexible work arrangements will continue to be part of business operations post-pandemic.

Read More

Banxa Holdings Inc. (TSXV: BNXA)-Cryptocurrency Payment Solution Company’s Share Price up 2.5x After Going Public Yesterday – Introductory Note

We are introducing Banxa Holdings Inc. (“company,” “Banxa”), a Payment Service Provider (fiat-to-crypto and vice versa) (PSP) company based in Australia. Banxa went public yesterday through a reverse-takeover of a TSXV listed capital pool company. Banxa provides an international compliant solution enabling customers to engage in fiat-to-crypto as well as crypto-to-fiat transactions. The company targets both consumers (“B2C”) and businesses (“B2B”) in over 130 countries. Its solution permits the exchange of fiat currencies into bitcoin and other cryptocurrencies, and vice versa.

Read More

Universal Ibogaine Inc.-Focused on New Treatment for Opioid Addiction and Other Substances Going Public – Introductory Note

In this note we are introducing Universal Ibogaine Inc. (“UI”), a privately held company building an addiction treatment business. UI plans to file a Clinical Trial Application with Health Canada by mid 2021, as well as open ibogaine based psychotherapy centres in jurisdictions where ibogaine use is legal. The company is scheduled to go public through a reverse-takeover (“RTO”) transaction with a TSXV listed capital pool company. The transaction is expected to close in February 2021.

Read More

Galane Gold Ltd. (TSXV: GG / OTCQB: GGGOF)-Ramping up Production with Easing Restrictions

With easing restrictions in both South Africa and Botswana, GG’s Q3 production increased 36% QoQ at Mupane (Botswana), and 50% at Galaxy (South Africa), and beat our expectations. We are raising our 2020 production forecast from 30.5 Koz to 32.5 Koz. Operating cost increased 5% YoY, and 2% QoQ, to $1,082/oz in Q3, and was higher than our expectations. However, gross profit increased 82% YoY, and 21% QoQ, to $790/oz, due to stronger gold prices.

Read More

QMX Gold Corporation (TSXV: QMX / OTC: QMXGF) Backing from Eldorado and Osisko Gold: Initiating Coverage

QMX Gold is focused on exploring its large land package, covering over 200 sq. km, in the Val d’Or East Mining Camp, southeast of the Abitibi Belt – one of the richest mining regions in the world. Eldorado Gold (TSX: ELD), Osisko Gold Royalties (TSX: OR), O3 Mining (TSXV: OIII), and Probe Metals (TSXV: PRB) are significant investors of QMX, and are active players in the region. We believe this creates opportunities for QMX to position itself as an acquisition candidate.

Read More

ION Energy Ltd. (TSXV: ION / FRA: 5YB)-Mongolia’s First Lithium Brine Explorer – Introductory Note

ION Energy went public through a reverse takeover in August 2020. It is the recipient of Mongolia’s first ever exploration license for lithium brine. Although the country has never been explored for lithium brine, previous studies suggest that its salt lakes hold potential for lithium. ION’s project, which is in early exploration stage, is strategically located just 24 km by road from the border with China – the world’s largest Electric Vehicle (“EV”) and battery manufacturer.

Read More

Indiva Limited (TSXV: NDVA / OTCQX: NVDAF) Wana Gummies Start Strong; Expecting Record Q4 – FINAL REPORT

In Q3-2020, Indiva reported $3M in revenue, up 1,532% YoY, and 18% QoQ, inline with our expectations. The increase was attributed to the introduction of WanaTM Sour Gummies last quarter, partially offset by a 41% QoQ decline in sales of Bhang® Chocolates due to seasonality in chocolate sales, and fewer new additions to the Bhang product line. Sales of gummies were well above our expectations, with $1.23M in revenue in the first month of sales (September), capturing 41% of the quarter’s revenue.

Read More
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