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On July12,2016 Newmarket Gold released it's quarterly production results.Newmarket is the old Crocodile Gold but it has a few new tweeks.Newmarket has all of it's assets in Australia (3 gold mines and a new one soon starting) but it's headquarters is in Vancouver, Canada;this is a Canadian gold company.
Production data
Newmarket had record quarterly production in this quarter;62,000 total ounces is 9% more than Q2 2015.First half production was at 119,250 ounces which includes 57,000 ounces for the first quarter.Newmarket is on track to exceed their annual guidance of 205,000 to 220,000 ounces.This blog predicts annual production of 245,000 to 255,000 ounces.This is chiefly because of the increases in the grade of ore in the Fosterville mine and a slightly higher gold recovery rate.
Newmarket reports that they have a new gravity gold circuit increased recovery system.And they also report that mill grade increased by 27% over Q2 2015 at the Fosterville mine.This is important as that is now 61% of total production.There are now 8 drilling rigs at Fosterville;4 rigs at the Lower Phoenix structure and 4 at the Harrier south extension.Drilling is both above and below ground.There is no drilling now at the Phoenix structure which is where much of present production comes from.And Newmarket reports that there are 2 rigs at the new Aurora B resource in the Stawell mine.
Fosterville had a quarterly record production of 37,250 ounces.The Cosmo mine produced 15,500 ounces which is an increase over 2015.But the Stawell mine production fell to 8500 ounces chiefly because the mill grade of their ore decreased.
Newmarket has another property called Maud Creek which seems to be in the centre of Australia.They have completed their assessment study and it has a 5% NPV using a gold price of $1200 per ounce.Newmarket will commence a feasibility study in Q3 and may be ready to drill in early 2017.They probably would use the Cosmo mine mill to process their ore at first.
New Guidance
Investors should be happy with this quarterly production report.The full financial report will follow.But Newmarket does say that it has a cash balance of $70 million which is up 34% from Q1 2016.It also shows that now it has no debt.This ensures that the Maud Creek mine will be ready to start production with a successful feasibilty study in Q3.Newmarket has talked in other quarterly reports about other properties they have including a Silver Tip mine.And now the price of gold is inching forwards;it may stay in the $1325 to $1375 per ounce range for the rest of 2016.This price scenario will allow Newmarket to make a small acquisition and take on a little bit of new debt.Although it is clear that their main focus now is on assessing the total size of the Fosterville resource.
If this blog is right about their new annual guidance being 245,000 to 255,000 ounces and the gold price staying in it's present range then look at the share price being in the $4.50 to $5.00 range by December, 2016. use Workathon analysis of Cdn. resource stocks
This is a blog about a company not previously covered in Workathon- Intrinsync Software.Although it has been mentioned in a blog analysing Tucows on 09/03/2015 called Four Small Cap Technology Stocks.This is one of a number of junior technology companies that has taken a different path to growth.It started with a number of products that were not going to be pathfinders nor groundbreakers.The technology and the products were only slightly profitable.But this stable of products was well managed and so it brought in new staff and had some money left for investment.And so it made some investments in other junior technology companies.This became the start of a new and growing and more successful company.
The Basic Data
Intrinsync Software was priced in the $.40 area from January,2012 to about June 2105.Then it moved into the $.75 price range.It still only has total assets of about $15 million but it is typical of software companies to have few assets.More importantly it has a market capitalization of about $25 million and earnings per share of $.09 combined with a price/earnings ratio of 13 times.These are pretty good numbers for a software company some of which can have quite large P/E ratios.It is not unusual to see a P/E ratio of 20 to 25 times;this would give ITC a price of $1.75 to $2.00 per share.This gives investors a snapshot of where they are now but not where they are going.
Small Cap Startups
ITC has a program to acquire small cap technology companies with little good will (or negative good will) and interesting new technologies.Some of the companies ITC has acquired include Global Relay,Spry Logistics and now taking a position in Payfirma.It may also have small positions in Neulion and D-Box Technology.It's earnings are not great but it has only 20 million shares outstanding.So it still has some equity to buy other startups.Overtime they will combine these separate parts into a new and different operation.That is slowly taking shape.
Conclusion
Intrinsync Software is a junior technology company;now it has parts of several other junior technology companies.It will need to take greater positions in all of it's subsidiaries and combine the operations gradually.This will require more equity and more debt so the acquisitions must be prudent.But the new ITC will become a small technological operating company producing a few special products.It is not there yet but it is on it's way.This blog believes that a P/E ratio of 13 is light for a company with this kind of potential. see Workathon for prediction on growth of ITC ; get stories on Cdn. junior tech companies on Workathon.blogger.com
Several blogs on Workathon have talked about and suggested a restructuring of both the quarterly report and it's corporate structure of Chorus Aviation.Some of these blogs are July12,2015 and Nov.18,2014 and October23,2013.click here for details .But in fact over the last two years this blog has seen that the changes are becoming more visible- both in the quarterly report and the corporate structure.For example, since the C.P.A agreement with Air Canada was amended the regulated revenues and income have fallen.The fall has been gradual but clear.But the category called non-operational income (by Chorus) and non-regulated income by this blog has grown.Chorus reports that there was an increase of $70 million in non-operating income over the same quarter in 2015.This is dramatic and points to a number of structural changes.It also points to the fact that EBITDA had a substantial increase not decrease in the last quarter.
Initial Steps
Chorus underwent a number of changes.Their initial step was in 2012 and 2013 to invest in a number of foreign airline operations,including one in South America.Most of these were far from home but quite profitable.After a little fixing up and improving they were put back on the market and sold for a tidy profit.They also had a maintenance operation in the London, Ontario airport.This also was sold for a good profit and their entire maintenance operation was moved to Halifax where their headquarters are.They bought a number of small specialized maintenance firms like Telesys and started to increase the size of their maintenance operation and revenues.
This gave them a little independence but they were still very dependent on their main C.P.A. agreement with Air Canada.Recently they bought a specialized charter operation called Voyageur Airways in North Bay, Ontario and have bought a few more CRJ regional jets for this operation.Chorus says that only $10 to $20 million of EBITDA comes from this subsidiary yet.This blog predicts that more investment will be spent here in 2016.
A Good Quarter
The first quarter of 2016 was a good one for Chorus as net income was $55 million which was a record quarter.But this quarter recorded almost $40 million in foreign exchange gains as well as a large amount of what they call non-operating income.Can they repeat this in the second quarter?
Net income was $55 million or about $.48 to $.50 per share but the more important EBITDA was $45 million or about $.29 to $.30 per share.EBITDA gives us a better measurement of earnings per share and if Chorus can come in with $35 to $40 million in the next quarter this will be a successful first half. This will indicate that Voyageur Airways as well as their maintenance operations are becoming more successful. Furthermore earnings per share will be around $.66 to $.70 per share for the first half and $1.30 to $1.40 per share for the full year.The second quarter will tell investors how successful their restructuring has been and how much more remains.
This blog predicts that EBITDA will be around $33 to $35 million for the second quarter and $.60 per share for the first half.Still,
on track to hit $1.25 per share for the year and maybe even raise the dividend.This blog expects Voyageur to have growing pains and C.P.A. revenues to be down from the first quarter.The wildcard here will be how much revenues they earn from their maintenance agreements,including the one with Bombardier. read expectations for the second quarter; read expectations for Chorus Av. second quarter
