Kirkland Lake Gold shows Tremenduous Growth in Production and Earnings

    Kirkland Lake Gold is a company covered in my Workathon blog many times.Kirkland Lake Gold bought Newmarket Gold in 2016 for about $1 billion and shares.At that time Kirkland Lake Gold was trading at about $12 per share. In 2018 it was trading in the $40 range and had a market cap of $10 billion.At the beginning of 2019 it was trading at about $48- $50 per share.It has steadily moved up  in 2019 to today's price at $60 per share And now it has a market capitalization of about $13 billion.My blog in Workathon of March 19 stated that the main reason  for this price movement is that investors have gradually seen that the Fosterville mine formerly owned by Newmarket and before that Crocodile Gold is much bigger than stated by the former owners.And this is because one partially explored fault (the Phoenix fault) and two unexplored faults (Lower Phoenix and Eagle fault) were larger and had a much higher grade of ore than in the original mine.Grades of ore  in the southern faults were 7 to 10 times richer than  in the main Fosterville mine.
           History of the Fosterville Mine
   Newmarket Gold gave an estimate of the size of the ore deposit in 2015.At that time it was stated that all their Australian gold reserves amounted to 2.5 million ounces.There was only thought to be .5 million ounces in their northern Cosmo mine and almost no deposit left in the Stawell mine.So that means that the Fosterville mine was estimated to contain 2 million ounces.At that time little was known of the 3 large faults to the south;they were thought to be small extensions of the main mine.Later it was discovered that there were 3 major faults.And then exploration revealed that the grade of ore at the new faults was considerably higher than in the main mine.A few samples showed ore with 100 grams per tonne as opposed to more normally 4 to 5 grams per tonne.For example, one gold company in northern Ontario survived and made a profit for years on 2 grams per tonne.                                                             The detailed information given by the former owner and by Newmarket Gold lead this blog in an earlier Workathon blog dated 20/01/2018 to give an estimate of 8 million ounces at the Fosterville mine alone.Kirkland Lake Gold now estimates,in their blog, that this ore body contains 6 million ounces.The difference  between these estimates depends on the size of  extensions from the last fault-- the Eagle fault and the average grade of ore.The fault north of this one called the Lower Phoenix has largely been explored and measured.
    KL does not tell shareholders in their quarterly report what production from Fosterville was but does say that total Kirkland Lake production was up 30% from Q2 2018.It also adds that it has made a number of improvements to the mine including a new ventilation system, and a water treatment plant.Much of these expenses have been caused because the mine body  and mine entrance come from the old,original mine.This blog has stated before that costs could probably be reduced by making a new mine entrance.
     Second Quarter Highlights
 KL tells shareholders that Q1 revenues at $281 million were up by 31% from Q2 in 2018.And gold sales at 212,000 ounces compared to 164,000 ounces in 2018.Of course the price of gold rose from $1300 an ounce in 2018 to $1525 an ounce presently.As a result EBITDA grew from $124 million to $185 million.However quarterly free cash flow fell to $53 million from $61 million in 2018.At the same time "all in sustaining costs" dropped 16% to $638 an ounce.While quarterly capital expenditures were $48.5 million with $14 million of this on the Fosterville mine.And $30 million  will be spent on advanced exploration in the Northern Territory of Australia.This exploration work is intended to progress underground development and support the resumption of operations at the Cosmo mine - the original Australian mine.
      Annual Results
   E.p.s. for the 3 months were $.49 compared to $.29 for 2018 and for 6 months $1.01 compared to $.52 for 2018 or almost double the previous year.No information is given on production from the Fosterville mine but this blog estimates that there will be greater production  in the second half. And there is room for much greater production with a second mine entrance.With this deposit and continued KL improvements, e.p.s for 2019 could grow by another 50%.This will happen even if the price of gold is constant.
     Future Exploration 
       KL tells shareholders that $14 million will be spent at the Fosterville mine in Q2.They also tell shareholders that $29 million will be spent on the Cosmo mine.Originally the Cosmo mine was estimated to have .5 million ounces but Newmarket Gold (the former owner) did some more exploration and found there were two faults not one.So Kirkland Lake will undoubtedly find one million ounces in their Cosmo mine.
        Conclusion
         Only a little more exploration needs to be done to finalize the total estimate on the Fosterville mine.But the final estimate is going to be beteween 6 and 8 million ounces. The final estimate for the Cosmo mine is going to be close to 1 million ounces.The problem with both mines is that KL needs greater production from both.But KL is gradually increasing production for each quarter.And in the Fosterville mine there is a lot of room to grow.With this in mind look for the price of KL to hit a new record high in 2019.   

https://www.credit-suisse.com/ch/en.html ;https://www.brookfield.com/

Street Capital Bank becomes a Subsidiary of RFA Capital

  On May1,2017 Street Capital Bank became Canada's newest  chartered bank;  

;this blog described it in a Workathon blog dated 23/01/2018.For the first year as a chartered bank revenues and earnings were gradually rising.And now they were allowed to take deposits (a cheap source of funds) and make mortgages.But ,even with their new features, in late 2018 things started to turn sour.And so RFA Capital, a virtual white knight,emerged in 2019 and made an "acquisition of all of the issued and outstanding shares" of Street Capital Bank. 
       Second Quarter Results
 Separately from the buy-out SCB had a pretty good quarter.Revenues were up by 6% to $18 million.Diluted e.p.s were $.03 consistent with Q2 2018.Mortgages under administration were $27.92 million in line with $27.90 originated in 2018.However the book value per share fell from $1.15 to $.80 per share.As total SCB originations fell from $108 million to $43 million.
    RFA Capital             

   It is true that Street Capital Bank was starting to bleed equity although it had a good quarter.RFA agreed to increase equity capital by a minimum of $50 million.To that end, it has added $25 million of readily available stand by capital.Furthermore " it is RFA's intention  to cause the investors to inject up to an additional $100 million of further equity capital into the bank over the next 5 years".According to RFA Capital "approximately 20% of the outstanding common shares have agreed with RFA to vote in favour of the arrangement".
    On the Upswing

       The first year of business was not a good one for SCB.And 2018 continued this trend.But 2019 was starting to look better as they had a pretty good second quarter.But it would be hard to take back those seven or eight quarters.So Street Capital Bank was acquired by RFA Capital.It will take strong backing for awhile yet because there is stiff competition in the Canadian banking scene.But RFA Capital is seen as a good partner that will provide more than equity capital.And with a little luck Canada will have a new chartered bank.However it has a way to go as their total assets are only $1 billion and the next smallest bank is Canadian Western Bank at $30 billion of assets.          http://www.goeasy.com/  https://www.zacks.com/

Chorus'Regional Aircraft Leasing shows Increases but Air Canada Business shows small decrease

     Chorus Aviation started it's regional leasing business about 18 months ago with a $200 million loan from Fairfax Capital.Chorus repaid it with a $200 million convertible debenture.Many thought they might not be able to pay it back nor redeem the debentures.But this has not been a problem since their regional aircraft leasing has been so successful.Since it's inception Chorus has leased 56 aircraft to smaller airlines.Most of it has been turboprops which Chorus has extensive experience with including a crack maintenance team and strong ties to Bombardier.Although Chorus has also leased some regional jets as well.It's strong relationship with Bombarier helps here also.                        

   
     Second Quarter Results
   Historically speaking Chorus had an average quarter.Adjusted EBITDA increased by $1.6 million to $86 million.Partly because     adjusted EBITDA from   their leasing segment  increased by $10.4 million.  Revenue earned from Air Canada had  a small decrease.Importantly they added 11 additional aircraft for a total of 56 aircraft in their leasing program. This has been accomplished in less than 2 years.However adjusted net income deceased by $5 million to $25 million.One new item here was a $4.5 million charge for interest costs related to their leasing program. That aside, net income increased from $16 million to $39 million for Q2.
     Turboprops or Regional Jets                

  Chorus uses both turboprops and regional jets in delivering passengers for Air Canada.But it's leasing program is more popular  with customers leasing turboprops than regional jets.For short distances turboprops are more efficient but the narrow body jets are more economical for longer distances.This blog believes that in order to increase it's visibility for excellence in regional jets a stronger bond with Bombardier should be forged.As it was Bombardier that created the CRJ series.In fact, just as Air Canada invested in Chorus so should chorus invest in Bombardier.And even with great fanfare hire some Bombardier staff.Its customers will know and hopefully lease more regional jets.Their new visibility aside, this blog sees a total of 65-69 aircraft leased by yearend.          https://www.desjardins.com/ca/index.jsp https://www.omers.com/    

Northland Power's Second Quarter Results -- Waiting for Q4

 On August 7 Northland Power released it's second quarter results and there was little growth over Q2 2018.That is because Northland's two big projects are not yet completed but there is some good news.There is a rainbow with a pot of  gold behind this story. Firstly all Northland Power's financial and performance 

indicators are ahead of Q2 in 2018.But more importantly NPI is nearing completion on it's North Sea wind farm called Deutsche Bucht.And it has started construction on it's first  solar project in Mexico called La Lucha;Northland says there will be others  to follow in Mexico.Lastly it is developing sub projects for it's offshore Taiwan wind farms and will be ready to execute power purchase agreements in late 2019. These matters were discussed in an earlier Workathon blog dated February,14,2019 

Second Quarter Highlights

Most financial indicators were up in Q2 but only slightly so.Revenues were ahead by 2% over Q2 in 2018.While adjusted EBITDA was up by 6%.Lastly free cash flow per share decreased by 5% -- from $.21 to $.20 per share.And net income increased by 10% to $76 million.NPI also adds that La Lucha has started construction and will be finished in the second half of 2020.In addition, 25 of 33 turbines have been installed in the North Sea and DeBu has generated it's first KWH of pre-completion revenue already.Perhaps there will be  a substantial amount of pre- completion North Sea off shore revenue by September 30.

                     Totals for the 6 months were a little better as revenues were up to  $842 million.While net income moved to $280 million from $245 million in 2018.And adjusted EBITDA was ahead by 3% over 2018 to $488 million.Northland says that this is on track to hit

 EBITDA of $1200-$1300 million for 2019. 

Good Growth for last 4 years 

Northland showed only modest growth this quarter.And will have only little increase in Q3.Investors will have to wait until Q4 for their reward.But investors have been rewarded well over the last four years.Revenues have doubled from $728 million to$1555 million in 2018.Operating income almost tripled as it went from $383 million to $1134 million.In addition, net income showed tremenduous gains as it went from $27 million to $405 million in 2018.True, the dividend only increased slightly over the four year period.But Northland Power has made some large and very profitable investments in the North Sea.   

Comparison to Emera 

 This blog considers Emera one of,if not the best run,and most stable Canadian utilities.At first glance these two utilities seem like David and Goliath.Emera has certainly been around for longer and has grown it's dividend quite well but Northland Power has made tremenduous gains recently.In 2018 NPI's revenues were only about 25% of Emera revenues  but at the same time they made up almost 55% of Emera net income.This with two big projects schedule to finish by Q2 of 2020 and one of these in Q4 2019.Northland constructs quite large projects (Deutsche Bucht is a $1.4 billion project).So this blog sees that Northland's net income may be 60% of Emera net income by Q2 of 2020.Emera is trading at $56 to $58 per share so why shouldn't Northland trade at 60%  of this value or at least $30 per share.    https://www.brookfield.com/https://www.omers.com/      

Blackline Safety is in a Breakout Pattern

    Blackline Safety is a junior technology leader and it released it's second quarter results on June 27.Blackline (BLN) paints a fairly rosy picture.Quarterly revenues have doubled from Q2 in 2018;they were $8.2 million in 2019 for a whopping118% increase over 2018.Cash and short term investments stood at $34 million.Although they still incurred a $4.8 million loss versus a $4.5 million loss in 2018.But importantly adjusted EBITDA was $253,000 for Q2  versus a $104,000 loss in 2018 and for 6 months it was $286,000 versus a $239,000 loss in 2018.A 343% gain for the quarter and a 220% increase for the first half.
       New Products and New Revenues
   Like in the picture above BLN has room to grow with it's present stable of products;some of which are newly acquired.This blog has given several good leads to BLN on my Site123.com website.Details are available  for several dates on Site123.com.It is clear that Blackline has substantial cash on hand and a strong capital structure that has allowed accretive investments.Further revenue increases are expected throughout 2019 from these solid investments.                       

      Blackline Safety has a Special Niche
    BLN is a very well managed company and is seen by this blog as poised for new acquisitions.It's recent growth spurt has been caused by products from it's recent acquisitions.But BLN has a special niche and special products.This niche has less competition than does many junior technology companies.And this blog ( see the picture above) has another small acquisition lined up;this will be in the business of wireless transmissions to employees and wireless security similar to BLN's present business and should fit in well.If this new acquisition gets tucked in and is accretive to  EBITDA then look for Blackline Safety to be in the high $6 range by yearend.         https://www.zacks.com/  https://www.omers.com/       

GoEasy has Safety and More Products

      GoEasy Financial is working on remaking itself.It is keeping it's delinquency rate down and secured lending up.At the same time this blog has recommended that it make some combination or even an outright acquisition of Street Capital Bank-a small fairly new Tier1 bank.There has been an acquisition of Street Capital Bank by an unknown company called RFA.It is not known whether GoEasy is connected directly or indirectly with RFA.But if it is then GoEasy will have a number of new products to offer it's customers.If handled correctly and slowly this could increase revenues dramatically.But of course some of their new banking products will meet with competition in the small Canadian market.
    First Quarter Highlights
   GoEasy is a consumer loan specialist and so their loan portfoloio increased by 46% over 2018 to $602 million.At the same time revenue increased by 22% to $140 million.More importantly e.p.s. increased by 53% or from $.77 to $1.18 per share.
      Safety First
    They also enhanced their plan to lend in Quebec which will give them further growth.GoEasy also tells it's shareholders that secured lending increased from 4% in 2018 to 12% in Q1 2019.This strategy and others has kept their delinquency rate down to 4.4% which is consistent with 2018.In fact, the CEO says that "1 in 3 Easy Financial customers graduated to prime credit and 60% increased their credit score within 12 months of borrowing from us."GSY also takes care of shareholders by repurchasing 283,500 shares at an average price of $41.75 per share.
      Larger Market                    

   GoEasy has a quite successful market niche and as can be  seen from above they have improved this market over time.This alone should allow earnings to grow by 40 to 60% for a number of years.But GoEasy has decided to gradually increase it's banking products.If this is done slowly and carefully it should strengthen the company even further.A Go Easy credit card and line of credit (over $15,000) may not be too far away.But Go Easy mortgages may likely never appear.Look for annual e.p.s. of $.50 to $5.00 for 2019 and this should allow the price to gradually move towards $58-$60.                https://www.otpp.com/homehttps://www.info.com/serp?q=cpp%20canada%20pension%20plan&segment=info.0419&s1aid=8515556047&s1cid=1628428016&s1agid=57491951010&s1kid=kwd-300114431469&utm_source=adwords&gclid=Cj0KCQjwyLDpBRCxARIsAEENsrL8xz00HWInfPMwKPQKt5Srbq4VGKkznQGq8KUkTn1zTbIX-T3s4T8aAmZ1EALw_wcB

Domaine names are still Tucows' main domaine

    On May8 Tucows released it's first quarter results and they were as this blog expected.And that is chiefly because Tucows is either still making revenues from domaine names or at least telling investors that they are.This has caused the stock price to be on a roller coaster.It was trading around $120 a share in January and February and this blog believed that investors thought that they owned a  number of hardware and online advertising companies.As they gradually learned that Tucows was only in domaine names the stock price fell to $83 at the release of the quarterly report.After results had been absorbed the price fell further  to it's $80 price level.Now it does not  appear so stylish and modern but it is still buoyed by it's ample profit.
    First Quarter Highlights 
  Tucows tells shareholders that it's mobile internet service company called Ting is operating in it's eighth American town-Fullerton, California.However total Ting revenues plus revenues from domaine names has fallen since Q1 2018 by18% while net income dropped by 25%.Basic e.p.s. dropped by 26% and adjusted EBITDA by 9%.So their financial indicators all show to varying degrees that financial performance is starting to falter. 
      It is not clear how revenues are earned.For example, how much revenue is recurring and how much is one time only.It is also not clear if Ting makes any income at all it seems to have very heavy investment and little revenues coming in.But it is starting to be more clear that the growth in revenues is faltering.It is also clear that Tucows has a small capital structure with only 10.5 million shares outstanding.     

     A New CEO
   This blog has warned the CEO,Elliott Noss, to diversify out of domaine names.And that a discussion of Ting does not belong as a highlight;it is only a footnote.Tucows lost a good opportunity to buy Yellow Pages and get into the Quebec market and into online advertising.Domaine names is too specialized to count on as your only revenue source.In addition, Tucows has a very tight capital structure at 10.5 million shares.It should have raised more equity when the stock was trading at $120/share,     http://www.caissepopulaire.ca/https://www.laurelhill.com/