Research Reports

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.

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.

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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.

Panoro Minerals Ltd. (TSXV: PML) Wheaton Precious Funded Copper-Gold Junior in Peru with Hudbay as the Largest Shareholder – Initiating Coverage

Panoro Minerals Ltd. (“company”, “PML”) is a copper focused junior with nine projects in Southern Peru. Hudbay Minerals (TSX: HBM) owns 12% and is the largest shareholder. PML’s portfolio includes two advanced stage assets – Cotabambas (copper-gold) and Antilla (copper) – with a combined After-Tax Net Present Value (“AT-NPV”) at 7.5% of US$989M, per Preliminary Economic Assessments (“PEA”) completed on the projects. Panoro’s Enterprise Value (“EV”) of $28M is just 2% of the combined AT-NPV.

Apple Inc. (NASDAQ: AAPL) – FY2020 EPS Missed Our Estimate by 0.04%

We had predicted the decline in iPhone sales as Apple had announced earlier that their new iPhone 12 series will only be launched after the fiscal year-end. We expect a strong Q1-FY2021 based on sales from iPhone 12.
Wearables, home, and accessories, and services reported strong revenue growth. Although we are concerned about increasing competition for iPhone, we are slightly raising our revenue and EPS forecasts for FY2021 based on stronger growth in wearables, home and accessories, and services. Our forecasts are on the conservative-end of consensus forecasts.

Microsoft Corp. (MSFT) – Q1 Revenue Inline, but EPS Beat Our Expectations

Highlights: Q1-FY2021 (quarter ended September 30, 2020) revenue was up 12% YoY, inline with our expectation, but beat market consensus by 4%. As expected, revenue was driven by a surge in demand for cloud services amid a work from home environment due to the pandemic. We expect a high percentage of businesses to move to a permanent work-from-home environment, even after the pandemic. This is positive for MSFT, and other cloud providers, as the recent surge in demand for cloud products will likely stay.

Grown Rogue International Inc. (CSE: GRIN / OTC: GRUSF) Q3 Revenue up 17% YoY, Inline with Expectations

In Q3-2020, the company reported $904k in revenue (in line with our expectations), an increase of 17% YoY, and a decrease of 23% QoQ. EBITDA also showed a similar trend, improving YoY, but declining QoQ. The Bay City indoor production facility in Michigan (acquisition expected to be completed by Q2-2021) received its first Class-C adult-use (recreational) cannabis production license in August 2020. Recreational cannabis prices were 30% higher than medical in September.

AgraFlora Organics International Inc. (CSE: AGRA / FRA: PU31 / OTCPK: AGFAF) Q2 Revenue up 25% QoQ; Sale from harvest expected in Q1 2021

In Q2-2020, AgraFlora Organics International Inc. reported a 25% QoQ increase in revenue to $0.46 million. Farmako (wholly-owned German medical cannabis distributor) continues to be the source of revenue, while the other divisions await licenses. We are lowering our 2020 revenue forecast as we were expecting sales from the Delta and Winnipeg facilities to commence in 2020. Management currently estimates sales to commence in Q1-2021.

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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

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.

Read More

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.

Read More

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%.

Read More

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.

Read More

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.

Read More

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.

Read More

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.

Read More

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.

Read More
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