Skip to main content

Take a closer look at small cap companies to boost your portfolio.Photos.com/The Globe and Mail

Inside the Market's roundup of some of the Canadian small caps making news and on the move today. This post will be updated throughout the morning

M Partners analyst Derek Macpherson downgraded Golden Queen Mining Co. to a "sell" rating from a "buy" after the company late Tuesday suggested estimated resources and reserves at its Soledad Mountain gold and silver may have to be reduced.

As a part of the detailed mine planning required for production, the company brought in a new consultant, Mine Development Associates. It believes veins at the deposit may be narrower than previously modeled, potentially resulting in a reduction in resources and reserves.

"Taking a somewhat conservative approach to this modelling change with respect to our estimates we have left our grade estimates unchanged, reduced our resource size by 15 per cent and increased the stripping ratio by 15 per cent, which we believe reflects the company's expectations for reduced reserves and resources," Mr. Macpherson said in a note.

"We believe that the uncertainty surrounding the current resource elevates the risk profile of the company as the company needs to refinance $10-million in debt by January 2015," he added.

Mr. Macpherson reduced his price target to $1 (Canadian) from $1.45.

In other analyst actions involving Canadian small caps today:

Cormark Securities upgraded Chesswood Group to "buy" from "market perform" with a price target of $16 (Canadian).

-

IC Potash Corp. announced that private equity group Cartesian Capital Group, LLC has made a strategic investment of $10-million (U.S.) by purchasing shares in ICP's wholly owned subsidiary, Intercontinental Potash Corp. (USA). The subsidiary owns the company's Sulphate of Potash mining and processing project located in Lea County, New Mexico.

Cartesian Capital is a 2-billion fund based in New York with over 17 years of strategic investment experience spanning the globe, according to AltaCorp Capital Reserch. Investments have been made in a wide variety of industries and locations from inception to full operating businesses. Founder and Managing Partner, Dr. Peter Yu will join the board of IC Potash.

-

Leucrotta Exploration Ltd. reported third-quarter cash flow per share of 3 cents, better than the 2 cents Street consensus, with production averaging 2,419 barrels of oil equivalent per day, ahead of the consensus of 2,091.

Dundee Securities analyst Brian Kristjansen raised his price target in the wake of the earnings to $3.40 (Canadian) from $3.25. "In our opinion, no company in our coverage universe faces the operational torque to well success like LXE," he said in a note. "Development of the company's low-risk Doe and Sunrise blocks can achieve our target price, while success on newly acquired lands could provide the means to see multiples of this achieved. We remain a BUY and would encourage investors looking for exploration torque to own the stock prior to year-end."

-

Bellatrix Exploration Ltd. announced that a syndicate of lenders has approved an increase to the company's borrowing base and credit facilities to $725-million from $625-million. "This 16 per cent increase of $100-million is the result of Bellatrix's strong 2014 drilling results during the first nine months of 2014, combined with benefits derived from its recently announced tuck-in acquisitions, cumulatively delivering significant reserves and production growth," the company said. "The increased credit facilities will be available to finance Bellatrix's ongoing capital expenditures, working capital requirements, and for general corporate purposes."

AltaCorp Capital Research analyst Jeremy McCrea reiterated an "outperform" rating and $9.50 (Canadian) price target in the wake of the announcement. "The volatile market combined with the infrastructure issues continue to be headwinds that are having investors take a more wait-and-see approach. We suspect that, until the company shows execution on meeting guidance, many potential investors will stay on the sidelines," he commented.

-

Revive Therapeutics Ltd. announced that the U.S. Food and Drug Administration has accepted the company's Investigational New Drug Application to commence a clinical trial for REV-002 (Bucillamine) for the treatment of gout. The company plans to promptly initiate a Phase II-A clinical study in patients with gout in the U.S.

-

Madalena Energy Inc. reported its third-quarter results, with production rising 300 per cent to 4,707 barrels of oil equivalent per day and oil and gas revenues rising 538 per cent to $30.9-million. "The company continues to be well positioned heading into an active 2015 year and expects to be in a positive working capital position with no debt at the end of 2014," Madalena said.

-

Callinan Royalties Corp. announced that it has entered into a definitive agreement with a unit of HudBay Minerals Inc. that marks the end of to protracted litigation which Callinan initiated in early 2007.

Brian Irwin, Callinan's Chairman, commented, "We are pleased to resolve this ongoing litigation in a way that compensates us and provides a mechanism for transparency in our future royalty income. ... If fully exercised, the settlement will result in aggregate payments by Hudbay of up to $19-million."

-

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe