Inside the Market's roundup of Canadian small caps making news and on the move today. This post will be updated during the trading day.
CounterPath Corp., a developer of desktop, tablet and mobile voice-over-Internet-Protocal software products and solutions, announced that it has been awarded a patent from the U.S. Patent and Trademark Office that protects its unique methods of authenticating a VoIP softphone application on a device via a GSM-based telephone network rather than via traditional username/password requirements. The patent strengthens the value of CounterPath's Operator Over the Top solution offerings and enables mobile operators to offer an improved seamless VoIP user experience for customers, the company said in a statement.
CounterPath is the leading advancer on the TSX today, up more than 50 per cent on the news.
RB Energy Inc. said unexpected commissioning issues at its Quebec Lithium Plant has delayed production of commercial volumes of lithium carbonate for sale. As a result, it does not expect to reach its original production targets for 2014 and commercial production levels will not be realized until the fourth quarter of this year. Shares in the company are down 22 per cent in afternoon trading with more than 8.5 million shares trading hands - the highest volume of any stock on the TSX today.
The delays in the ramp up of production have depleted the company's cash resources more than expected. The company said it is working to secure additional sources of funding and is engaged in discussions with a number of parties, including its banking syndicate. It hopes to receive an injection of funds over the next few weeks, but if it isn't successful, "this could result in delay, postponement or interruption of operations of the Quebec Lithium operation until a financial solution is achieved," the company said in a statement.
Dundee Securities analyst David Talbot downgraded its rating to "neutral" from "buy" and cut his price target to 80 cents (Canadian) from $1.70 on the news. He commented, "Time is money and we recommend investors wait until the lithium carbonate plant and balance sheet have de-risked before considering owning this name. We hope that our Neutral is temporary as our net asset value suggests significant upside to current levels assuming all goes forward as planned. However, given uncertainty surrounding its financial position and struggles to reach battery grade production shipment, we see our rating as more fluid and reflective of near-term risks."
Industrial Alliance Securities upgraded Major Drilling Group International Inc. to "buy" from "hold" and raised its price target to $9 (Canadian) from $8.50 after the company announced it is acquiring Taurus Drilling Services for nearly $28-million in cash, shares and assumed debt.
The acquisition expands Major Drilling Group's exposure to mine production and increases its revenue potential through senior and intermediate customer contracts, noted Industrial Alliance analyst Ben Jekic.
"This move improves the MDI stock upside potential, due to greater revenue visibility and a slightly lower risk, while still maintaining balance sheet strength and support of the dividend," he said.
Brookfield Canada Office Properties reported second-quarter results this afternoon, with net income rising to 42 cents per unit from 38 cents a year ago. Shares are down slightly in late afternoon trading.
Pan American Silver Corp. said today that the strike at its San Vicente mine in Bolivia, which began on July 7, has now been settled. Production activities at the mine have resumed this morning.
Based on the relatively short duration of the strike, the company said it believes that there is a "reasonable probability" that San Vicente will still be able to achieve its full-year production forecast of 3.9-million to 4.0-million ounces of silver for 2014.
San Gold Corp. and Kerr Mines Inc. announced this morning that they have entered into a non-binding letter of intent to merge their respective businesses. Each Kerr Mines shareholder will be entitled to receive a number of common shares of San Gold for every common share of Kerr Mines, based on an exchange ratio to be determined by the parties at a later date. Jennings Capital has been hired by Kerr Mines and Primary Capital by San Gold to provide an opinion on the terms of the transaction. A break fee of $1-million is payable by either San Gold or Kerr Mines in the event that either party proceeds with an alternative transaction.
Shares in San Gold rose 3.4 per cent at today's open.
C.A. Bancorp Inc. and Federated National Holding Co., an insurance holding company, issued a joint press release today announcing an agreement to form a new Florida-based property and casualty insurance carrier to be named Monarch National Insurance Company ("Monarch"). Transatlantic Reinsurance Co. is taking a minority position in the joint venture. C.A. Bancorp has entered into a subscription agreement committing $14-million (U.S.) to the joint venture.
Shares in C.A. Bancorp jumped 8 per cent this morning on the news.
Alphamin Resources Corp. has suspended all exploration activities and has evacuated site due to a security incident on its wholly owned Bisie Tin Prospect in east central Democratic Republic of Congo. "Alphamin's management team are currently in discussions with Senior Government Officials in Kinshasa to better understand the Government's strategy that will allow the Company to operate in a peaceful environment without recurring security risks," it said. The company is now focusing on completing technical studies in preparation of a definitive feasibility study.
Shares in the company fell 2.4 per cent at today's open.
Chartwell Retirement Residences said that in separate transactions it acquired interests in three retirement residences and a medical office building in the Province of Quebec for $66-million. It also closed on a previously-disclosed sale of a property in Ottawa.
Cervus Equipment Corp. said it now expects a deal to acquire the business and assets of Peterbilt of Ontario Inc. to close by the end of August 2014.
Dominion Diamond Corp. said it has promoted the Misery Satellite material previously identified as an exploration target to an inferred resource. The company also released an updated mine plan for the Ekati Diamond Mine, including current estimates for anticipated annual production by pipe, with associated operating costs and capital costs.
Perpetual Energy Inc. has increased the price on its 5-year note offering to $125-million from its previously announced $100-million, the proceeds of which will go towards early redemption of its $100-million worth of convertible debentures that are due to close closer to the end of July.. The remaining amount will also go in part towards paying another $60-million worth of convertibles waiting to be refinanced by the end of next year.
M Partners initiated coverage on RDM Corp. with a "buy" rating and one-year price target of $4.25 (Canadian). "The adoption rate for the company's technology is rising and we expect there will be more upside based on market awareness which will lead to higher valuations.... Within the last few years the mid-tier payment processing space has seen some consolidation. RDM would be an attractive acquisition target for companies with established relationships with financial institutions looking to expand services and thereby increase their market share. RDM has a clean balance sheet with $0.95/shr in net cash and an improving EBITDA margin," said M Partners.
Acumen Capital initiated coverage on Anderson Energy Ltd. with a "speculative buy" and 35 cents per share target price.
MAG Silver Corp. announced assay results from its 12-hole, 6,500-metre Phase 2 drill program on the Salamandra Property in Durango, Mexico, which has been optioned from Canasil Resources Inc. Phase 2 drilling began in late February of 2014 and concluded in May. In total, MAG has now drilled 10,112 metres in 17 holes on the Salamandra property, complementing an initial 12 holes previously drilled by Canasil.
"Salamandra continues to show structurally-controlled and broad pervasive multi-stage mineralization almost everywhere we drill," George Paspalas, president and CEO, said in a press release. "We are beginning to understand the geometry of the mineralization controls in some areas and hope that combining the drill results with the existing geophysics will help us zero in on areas with high-grade polymetallic skarn and CRD mineralization."