Jimrockford Blog – December 18, 2012
GGX (NEW!) YOO, V.PP, MMX, ALYI, BXR, CJC, DRV, APM, NDX., etc.
A few points re the December Jimrockford Blog:
I don’t have shares in all these companies. For the ones I don’t like – you’ll know it.
- Re the DRV and APM, I didn’t have much good DD last time, but not for a lack of trying. This blog has more DD re DRV than the last one. For APM, we’ll have to wait for Q1 2013.
- This is the first blog for GGX. Going by every new company I blog on – chances are it will now have an immediate run.
I dashed this blog off pretty quickly, as the holidays are approaching. The DD is great for me to get my thoughts in order. Hopefully it is a help to you.
If you need an article that didn't make it through the translation, please inbox me.
Global Green Matrix (GGX on the TSX-V) - NEW to the Blog!
GGX is only trading at 4.5 cents, giving it a market cap of only $3.42 million. IMHO, it is worth north of here, as the DD below will show. I am still doing my DD on this and will be giving more in my next blog – but, I am buying shares.
GGX was formerly named Poly-Pacific International Inc. In late Feb, 2010, they had a 1-for-15 shared consolidation, which took their share number down to 5.84 million shares. Essentially, less than two years ago they had a clean slate to build a new company – and it looks like they have done well in re-inventing themselves.
Global Green Matrix has three main businesses - Big Heat, Dryvac and Powermaster. The most important one – and the one that, IMHO, has the scalability and potential to catch on fire - is Big Heat:
Here are links to Dryvac and Powermaster:
‘Big Heat’ is a new technology that heats water used in the fraccing process. It is “a water heating unit that heats with much greater safety, efficiency, fewer emissions and is significantly faster than traditional methods in use today.”
The “technology virtually eliminates any possibility of on-site injury or accidents that have happened with traditional methods of heating water. All units have numerous safety shutoffs and virtually no radiant heat emanating from the burner, located in a totally encased chamber.”
It is “LP fired, truck-mounted, self-contained, 16 million BTU’s, safer, easier – and patent pending.”
“The Intercept Frac Heaters are designed for the large frac volumes performed in Western Canada. Their 16 million BTU heaters carry enough fuel to provide 20 hours of heating time. The Frac heaters are a high volume low pressure units. Intercept Rentals offers a safer, faster and more economical technology to heat water. BIG HEAT, a state-of-the-art, highly efficient heating units with controls that save you time and money. The low emission technology makes it eco-friendly “
“Hot Oilers have traditionally been used in the heating of Frac Fluids. They have all used the same principal of heating and that is to heat a coil tubing configuration that heats water in a tank. The fuel source has been either diesel fuel or propane.”
More reasons why I like the Big Heat technology:
- Fraccing opens up a well – it’s like a mini-explosion that opens up seams and keeps them open so that oil can flow. With fraccing, heated water is required.
- Big Heast uses propane fuel – and as such, the costs are a LOT lower than conventional oil costs.
- Competitors who use conventional fuel pay up to three times more.
- Propane is smarter and greener than other fuels
- They have the ability to get more surfaces on the water being heated
- The above lets GGX outperform the competition.
- The Big Heat process is 97% efficient, only losing 3% efficiency. This is huge – as the rest of the industry is 60% or so efficient.
- Re the above, they can outperform units twice as powerful.
- Big Heat costs per degree are less than any other competitor out there.
- For one competitor last month, the costs for Big Heat were $600 an hour. That adds up very well for the bottom line of the companies paying for the service.
- Fraccing consultants are VERY impressed with Big Heat.
- There are very few moving parts – i.e. less to go wrong.
- The unit that they have is “working flawlessly.”
Big Heat Going Forward
- GGX has exclusive Canadian rights – 6 to 9 units are operating in the Midwest – but GGX can go everywhere else.
- GGX has one unit, with the second tank being delivered by the end of January.
- Two more units are being ordered in Jan. and two more in Feb.
- The units take two months to be built and are built in Idaho (The average competitive unit takes 18 months to build).
- Right now, they have invested about $1 million in the units.
- The cost per unit is $600k (they will lease the trucks that carry the units).
- The plan is to have 4 units working through the summer.
- Starting in August, GGX want to order two more units per month.
- The applications for this unit work for other things than fraccing – i.e. heating water for dairy, etc.
Poseidon Concepts (PSN on the TSX) was, and is, a big success – going from a 10 cent CPC 3 or 4 years ago out of Calgary - to about $16 before they took a big hit 3 weeks ago. They are in the same space as GGX.
IF you see the link to Poseidon Concepts below, you will see how fast GGX could ramp up their number of units:
I have gone over GGX numbers and 12 month with 220 run rates and 15 units will give off $37 million of free cash flow. Now, I’m not saying they will reach this in the next year to year and a half – but both GGX’s numbers and Poseidon’s growth curve show it is doable.
Yangaroo Inc. (YOO on the TSX-V)
I’m very happy with the way Yangaroo’s fundamentals have roared in the two weeks since my last blog. And the SP gain has been 25% to 37 ½ percent – with more than a threefold gain in daily volume. I attribute the SP and volume changes both to the blog and the tremendous quarterly and material news served up by YOO. Bravo to Yangaroo.
Had it not been for a “wall” of stock at 5 and 5 ½ cents (over a million shares), IMHO, the SP gain could easily have been 50% to 100%. No matter, the bids are strong – and it is crystal clear to me where YOO is headed.
Consider YOO vs. Destiny Media (DSY on the TSX-V), a company that is somewhat in the same space:
The DSY market cap is $34.4 million. YOO’s market cap is $7.85 million.
DSY’s revenue is stagnating. YOO’s revenue is growing 20% quarterly.
DSY in Q3 2013 did $941k in revenue. YOO in Q3 2013 did $753k in revenue.
Going by the 20% growth YOO has been showing, that puts their revenue at an estimated $903k in Q4 2012 and 1.084 million for Q1 2013 – i.e. YOO should surpass DSY’s revenue in Q1 2013, if one goes by the above.
You can read into the above re how it would / will affect YOO’s SP and market cap.
Some more points:
- My numbers tell me that YOO’s high operating income should put YOO in the black in Q1 2003.
- Yes, YOO has 156.9 million shares out. I strongly believe (please see my last point), though, that they will institute a share buy-back program in late 2013 or early 2014.
YANGAROO LAUNCHES MAJOR NEW FEATURE FOR DELIVERY OF TELEVISION ADVERTISING – and gets Horizon Media (the largest independent media-buying service in the world) adoption.
2012-12-11 09:07 ET - News Release
Here is a paragraph from the NR:
“YANGAROO is pleased to announce the release of "Reporter", a significant new feature, described by our Advertising Industry customers as a "game changer". Designed to save time and money, the feature was developed in response to a request from our customers, to automate a largely manual spot delivery confirmation process. This first to market feature gives our customers a benefit not available elsewhere. The enhancement adds another dimension to our state of the art High Definition digital delivery service.”
And here is a link to the NR:
And here is why “Reporter” is such a “game changer.”
- It has features for the advertising companies that nobody else has.
-Horizon Media wanted it…..badly.
- Competitors DG and Extreme Reach can’t do what YOO can now do for their clients.
- If you can believe it, these things were being done by fax – and it’s 2012! As such, it takes a lot of manpower and leads to inaccuracies. The faxes show when commercials are (or going to be) programmed, whether they meet the specs wanted, etc., etc. As the specs are not always the right specs, it means a lot of resending, etc.
- The ad agencies have to employ quite a few people to monitor these fax rooms (See above).
-YOO has a huge advantage over the competition – and therefore, they will get more agencies on board.
-The above will mean more business - and more revenue.
-The competition can build this type of technology, too – but it will take at least six months to a year. In that time, YOO will be servicing their clients and will be building the next state of the art technology for their clientele.
Industry Article on the Reporter Technology:
YANGAROO CLOSES PRIVATE PLACEMENT
2012-12-13 14:55 ET - News Release
Yangaroo Inc.'s recently announced private placement has closed, raising aggregate gross proceeds of $315,000, of which $140,000 was invested by company insiders.
Here’s a link to the NR:
The insiders buying the PP above the SP shows clearly where they feel the fundamentals and SP are going.
An important advantage:
- YOO is fully electronic – i.e. “robots do all the work.” While YOO can and will move instantaneously to gain market share, the competion, IMHO, is burdened with infrastructure.
- Management and the BOD are excellent. Two of the Directors are heavy institutional players. And President & CEO Gary Moss moved from IMAX, where he was the CFO in charge of their $350 million in revenue. Here are links showing the Executive Team and the Directors.
- YOO has proven and innovative technologies.
- The market space is rapidly expanding.
- Barriers to entry are getting higher.
- YOO has few competitors
- YOO has “strong intellectual property rights and defenses.”
It's my considered opinion that fundamentals / material changes (i.e. in technology, customer base and revenue momentum, etc.) make today's SP considerably lower than it should be. I am very enthused for 2013.
My Nov. Blog of two weeks ago had a lot of info on YOO. It’s a good place to start your own DD:
A thought to leave you with:
I was looking at the list of awards shows that now use YANGAROO Awards solution and it struck me that YOO must be the leading company in the world providing this kind of service. When you have The Grammys, The BET Awards, The MTV Music Video Awards, The MTV Movie Awards, The Academy of Country Music Awards, The Soul Train Award, and The Junos, who else can compete with that?
I wonder what they’re working on next?
Pacific Potash (V.PP on the TSX-V)
The Nov blog was the first one featuring V.PP. Here is the link if needed:
The takeover on Friday of a small-cap Brazil fertilizer play (potash and phosphate) bodes very, very well for Pacific Potash - a small-cap Brazil (their best property) potash play.
Rio Verde Agrees to C
.40 Per Share All-Cash Acquisition by B&A Mineracao
- Shareholders to receive C
.40 in cash per share - The transaction represents an unaffected premium of 56% to the 20-day volume weighted average trading price of
.2568 based on trading to November 30 2012 - Rio Verde's Board of Directors unanimously recommend that shareholders vote in favour of the transaction
Here's the link:
This is a $48.6 million takeover and it is grassroots – i.e. there are only two holes so far. It is, though, near the Sergipe Basin and the only producing potash mine in Brazil. This play is similar to those in the Amazonas Basin (i.e. To Pacific Potash, Brazil Potash and Cowley) in that the potash was discovered through the search for oil and gas. It is harder, though, to mine in this area than the Amazonas Basin.
V.PP as Real Estate
V.PP right now is really a real estate play - in the sense that "you always want to own the cheapest property on the most popular street."
Pacific Potash is contiguous to Forbes and Manhattan's (i.e. Stan Bharti's) Brazil Potash, which will have a $500 million to $1 billion valuation once it gets listed on Brazil’s BM&FBOVESPA Exchange in Q1 2013.
The V.PP Property is huge - i.e. it is as big as both Petrobras' and Brazil Potash's properties. It is a 50 km by 30 km property that is over 2 million acres (800,000 hectares or 3000 square miles). And note: It is early days here, as V.PP got this Amazonas Basin property a short while ago and only signed their geo, Dean Pekeski, on August 31st of this year.
I see V.PP as just finishing their 43-101, making their property payments (they have the money on hand - i.e. pre-PP, to do this), finishing their PP, and setting up their initial drilling i.e. – just keeping their nose clean. Meanwhile, Brazil Potash will do their 43-101, drilling and huge IPO, etc. and Cowley will do their 43-101, drilling and money-raising, etc.
A few more things:
- The numbers on this deal could be huge.
- No doubt they are talking to institutions.
- If things go right, this would be bought out way before they even thought about going into production.
- Western Potash had the property – but are paying attention and raising money for their Saskatchewan potash play – as the market wanted them too. They, smartly, though, kept a 20% interest and can back in for 49%. That, though, would be massively expensive and IMHO it would be bought out way before that ever happened.
-World attention is coming to the Amazonian Basin
- In these situations, potash can be so far apart re its spacing, that an inferred resource can come relatively cheap.
- These guy should get analyst eyeballs all over them once Brazil Potash IPO’s in Q1 2013.
And for those who think potash is too plentiful:
- Brazil imports 80% of their potash
- Business and government are on-side re making Brazil net-exporters – not importers, of potash.
- In-country production is much more cost-effective for Brazil.
- The infrastructure is all there.
IMHO, V.PP has multi-bagger written all over it.
Macmillan Minerals (MMX on the TSX-V)
“TORONTO (SHfn) – Orko Silver (TSX: V.OK, Stock Forum) shares climbed 51% to $2.39 on volume of more than 11.1 million shares Monday after the silver junior agreed to a takeover bid from First Majestic Silver (TSX: T.FR, Stock Forum). First Majestic said its offer of 0.1202 of a common share of First Majestic plus
.0001 in cash per Orko share implies a value of $2.72 per Orko share, or a total consideration of approximately $387 million.”
MacMillan Mineral's (market cap of $1.65 million) claims Anna and Brenda, border Canasil (market cap of 10.36 million) and Orko (the $387 million takeover being pursued) on strike to the south.
MacMillan was in the 5 to 7 cent range when I started buying MMX in early Sept. It has been as high as 13 ½ cents since – and closed Friday at 4 ½ cents – i.e. A very nice profit could already been had.
My DD tells me there is no material change in the company. The remaining three holes on the Lac Cucharas Project are very close to being NR’d (my bet is the first couple of weeks of Q1).
As I’ve written, I really like the Cerro de Oro, which is very close to. It is within trucking distance of the biggest mine in Mexico, the Penasquito mine, owned by Goldcorp. Common sense says that Goldcorp, a major producer knows all about it. Diamond drill hole # 13 at Cerro de Oro (as shown in the PPT) was 85.5 m of 0.196 g/t Au 82.9 g/t Ag.
George Brown, the President of MMX, used to be the President of Duran (before I ever bought a share of DRV, as he had resigned a year or so earlier). During Brown’s tenure at DRV, their flagship property the Aguila was acquired – and he drove the SP up from not so much - all the way to over $3 bucks a share!
Re MMX, MMX has gone through a re-org, a listing on the CNSX and a long boring summer of 2012. IMHO, MMX really only started getting the motor running on this in Sept. of this year. So, in my books, it hasn't even had a 4-month shot.
IMHO, MMX is just getting started. Early Q1 should bring the three holes at the Las Cucharas – action on the Anna And Brenda - and knowing Brown, he knows the value of the Cerro de Oro. I believe Macmillan is going to have a very good 2013.
Alternet (ALYI on the otcmarkets.com)
Below is an excellent post authored by SP poster, ‘dontknowmuch.’ DKM’s DD leadership on ALYI is second to non – so, kudos to him.
Below is a link to a website titled: Alternet Systems Inc., Utiba Americas, Mobile Money in Latin America. It has a very nice suite of docs that the curator has found and made accessible to anyone who is interested:
Alternet is in a very good place and I couldn’t be happier re what I believe the near future will bring.
See the Letter to Shareholders of Nov. 14, 2012-12-16. My belief is that it is being followed to the letter.
The billionaire telecom-owning Cisneros family has now taken an even greater position in ALYI, buying shares in the open market and increasing their position from 9.9% (over the 10% hurdle) to 11.9%. Through their involvement in PP’s – and the warrants that come with it – I believe that the exercising of warrants would give them over a 20% ownership position.
And I find very interesting the hypothesis put forward by ‘donknowmuch’ that the Cisneros might be part of Utiba – the other partner in Utiba Americas. Here is DKM’s excellent post:
THE WRITING IS ON THE WALL – IMHO, IT CAN’T BE MORE CLEAR
Blue River Resources (BXR on the TSX-V)
IMHO, Blue River (BXR on theTSX-V) is at an extremely advantageous price right now. Here’s why:
- The year high-low is 21 cents / 8.5 cents. 8.5 cents is the current bid.
- Tax loss selling has ended. BXR traded at 14 cents less than a month ago – i.e. the stock price is down over 50% in under a month and there has been zero material change.
- All the progress made this year was made off the back of activity occurring on the Castle Copper Project and the Highland North Copper Project.
- ASSAY RESULTS SHOULD BE COMING OUT ON THE HIGHLAND COPPER IN EARLY Q1 2013. AND AN IP SURVEY TO GENERATE DRILL TARGETS FOR NEXT YEAR WILL BE STARTING ON THE CASTLE COPPER IN Q1 2013.
- BXR, IMHO has suffered from some ‘deal fatigue.’ The above should solve this problem.
Important Property Points:
- Highland Valley North is directly adjacent to Teck’s Highland Valley Copper Mine - Canada’s largest open pit copper mine.
- The Highland Valley North is 6 km east of Teck’s Bethlehem Pit. My due diligence tells me that it is in “play” – i.e. Teck is considering re-opening it. This is a huge bonus for every junior in the area.
BXR has some very diligent and well-seasoned professionals behind it. That makes it as far from an “orphan stock” as a company can be. With all the activity that should be occurring early in 2013, in my opinion, it is a cinch for a nice jump in the stock price.
Below are the company website and the Corporate Brochure to help you start your due diligence:
- ASSAY RESULTS SHOULD BE COMING OUT ON the HIGHLAND NORTH IN EARLY Q1 2013. AND AN IP SURVEY TO GENERATE DRILL TARGETS FOR NEXT YEAR WILL BE STARTING ON THE CASTLE COPPER IN Q1 2013.
- The Castle Copper Play is quite close to Copper Mountain (CUM on the TSX), Canada’s newest copper producer. CUM has climbed from $3.20 to the $3.80’s over the last month - and there is much speculation that it is a takeover target. That makes the Castle Copper Play, a property that can potentially provide CUM with ore for their smelter, even more attractive. The Nicola Fault, that appears to control the mineralization at Copper Mountain, runs through the Castle Property for 8 Km.
A note re Copper Mountain:
CUM was $2.60 in early Sept –and is now up 20 cents to $4.19. The Street thinks it looks like a possible buy-out at a much higher price. We will see.
Canada Strategic Metals
CJC closed at 11 cents today, meaning they have kept much of the gains they have made in the last short while. They are doing a $3 million dollar PP. This is from the latest NR:
“VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 4, 2012) -Canada Strategic Metals Inc. ("the Company") (TSX VENTURE:CJC)(OTCBB:CJCFF)(FRANKFURT:YXEN) announces that it has engaged Marquest Capital Markets and Casimir Capital Ltd. (the "Agents") to conduct a brokered offering of securities of the Company (the "Offering") to raise gross proceeds of up to $3,000,000 through the sale of up to 12,500,000 flow-through units (the "FT Units") at a price of
.16 per FT Unit and up to 8,000,000 non flow-through units (the "Units") at a price of
.125 per Unit.”
“Each FT Unit will consist of one (1) flow-through common share and one-half (1/2) of one non-transferable share purchase warrant (the "FT Warrants"). Each full FT Warrant entitles its holder to purchase one non-flow through common share at a price of
.30 per share for a period of twelve (12) months from the date of issue. Each Unit will consist of one (1) common share and one-half (1/2) of one non-transferable share purchase warrant (the "Warrants"). Each full Warrant entitles its holder to purchase one non-flow through common share at a price of
.25 per share for a period of twelve (12) months from the date of issue.”
I expect we will see a something like a Letter to Shareholders and that they will do the financing and have a very extensive drill program. This Management Team, IMHO, knows how to follow through.
Duran Ventures (DRV on the TSX-V)
This NR came out on December 11th.
DURAN OPTIONS CONCESSIONS ADJACENT TO AGUILA COPPER/MOLY PROJECT IN PERU AND ACQUIRES MAMANINA HISTORICAL DATABASE AND DRILLCORE
And here’s a link:
$2.65 million plus 2 million shares are being paid for these properties. $100k is due on signing as well as all 2 million shares – and that’s before any work is done. This is quite expensive.
The above dilution of the company is mitigated somewhat by the large amount of warrants that should expire unexercised.
22,853,000 @.20 Expire Dec 23/12
3,221,000 @.13 Expire Dec 23/12
3,850,000 @.20 Expire Jan 7/13
500,500 @ .13 Expire Jan 7/13
The latest PP amounts to this:
14,847,727 units for proceeds of $1,781,727
7,423,863 warrants for potential proceeds of $1,484,772
A total potential dilution of 23,310,930 shares
A total potential cash raised of $3,474,367 US.
I am impressed with the idea of financing in Peru and getting Alex Black, President / CEO of Rio Alto, on the DRV BOD. I am sure Black will serve as a positive here – especially as he bought into the PP.
Amerix Precious Metals Corp. (APM on the TSX-V)
I like Steve Brunelle and I like that he is buying his deal. And results should be out in Q1 2013.
APM is a well-run company and I hope they do well.
NDX has had a lot of tax loss selling and it seems shareholders are doubting how much of the company is left for them. Money is money and who knows what is up for Novadx. This shows that rollbacks are almost NEVER a good idea.
As a buddy said, “Novadx has been thrown to the wolves.”
I truly wish all their shareholders luck.
Still nothing to report that I see as solid. I am doing DD on Brixton and will have a better idea of things for my next blog.
Cheers – and enjoy your holidays.