Harte Gold – Where to from here?

It has been a tough start up year of production for Harte Gold Corp. (TSX: HRT) and investors were naturally disappointed with their recent 2019 Financial Year (FY) guidance, sending the stock price ~50% lower. Announced on November 1, guidance for 2019 was : “Quarterly results when compared to the Feasibility Study were below target. Based on results to-date, full year 2019 guidance has been adjusted to 24,000 – 26,000 ounces at an AISC of US$2,000 to US$2,200 per ounce. Previous guidance was 39,200 ounces at an AISC of US$1,300 to US$1,350 per ounce.”

Harte Gold Chairman Stephen Roman stated to InvestorIntel “Our ramp up issues at the Sugar Zone Mine will be resolved. We are working on the 2020 and Life of Mine Plan as well as management additions. More news to follow. Our biggest issues during 2019 have been lack of labour and insufficient underground development due to lack of labour as well as getting through surface low grade prior to getting into our forecasted mine grades.”

Harte Gold makes swift management changes

Clearly changes were needed at Harte Gold to fix the 2019 production results. Just three days after the 2019 guidance Harte Gold announced two new key management appointments – Sam Coetzer as President, Chief Executive Officer and Director, and Martin Raffield as Executive Vice President and Chief Operating Officer.

Sam Coetzer (President, Chief Executive Officer)

Sam has over 30 years of international mining experience and provides Harte Gold with strong leadership skills and an extensive knowledge of underground mining operations. Most recently, Sam was President and Chief Executive Officer of Golden Star Resources Ltd. During Mr. Coetzer’s tenure as CEO, he successfully:

• Transitioned the company from open pit operations to an underground-only producer.
• Attracted institutional capital including a large strategic investment.
• Grew the capital markets profile and increased overall share trading volume.

Martin Raffield (Executive Vice President and Chief Operating Officer)

Martin has over 25 years of experience managing underground mining operations across Canada and Africa. Most recently, Martin was appointed Executive Vice President and Chief Technical Officer of Golden Star, after joining Golden Star as Senior Vice President, Project Development and Technical Services. From June 2007 to 2011, Martin served as Principal Consultant and Practice Leader, SRK Consulting (US). Prior to SRK, he was Chief Engineer and Mine Superintendent at the Campbell Mine for Placer Dome Inc. Martin holds a Ph.D. in geotechnical engineering from the University of Wales and is a Professional Engineer registered in Ontario.

Harte Gold’s Sugar Zone Mine in White River Ontario, Canada

Harte Gold has a massive 79,335 hectares at their Sugar Zone property, with plenty of exploration upside. The current Resource estimate is 1,108,000 contained gold ounces @8.12g/t Indicated and 558,00 contained gold ounces @5.88g/t Inferred. Production is forecast to ramp up to 61,000 Au ounces pa over a 14 year mine life. With further exploration success the mine life could be extended or production volumes increased, or both.

Will new management be able to turn things around?

There is quite a long history of new production start ups having a rough first year before going on to be very successful. Most recently RNC Minerals production turned around to be on target for ~100,000 ounces per annum at an AISC of US$ 1,175 and falling, from a mine that was about to be sold 2 years ago due to not being profitable. In this case gold grades are only 2-4g/tonne, with some occasional bonus very high grade coarse gold finds.

In the case of Harte Gold they have grades in the range of 6-8g/tonne, so really there should be absolutely no reason why this mine cannot be very profitable going forward, assuming the gold price remains strong. The start up year has been a struggle, and AISC right now mean they are running at a loss. But looking ahead as they apply a more disciplined management approach and reach the high grade gold, Harte Gold should become a very profitable mine with AISC falling towards the previously forecast AISC of US$845 in the April 2019 Feasibility Study. Harte Gold is currently working on the 2020 and life of mine plan, so we will need to wait to see what comes from that.

Harte Gold – April 2019 Feasibility Study summary points

Given the current gold price is hovering just above US$1, 450, if Harte Gold can get their AISC down in 2020 to below this level, and then close to the US$845/oz as per the 2019 Feasibility Study (FS), then the outlook will brighten considerable in 2020 and 2021.

It is not unusual for underground mines to have a tough first year as they try to expand production. Harte Gold is working their way deeper to reach the higher grade gold. Also head office and other expenses (interest expense etc) are a relatively larger portion of costs until a mine can scale up production to higher volumes. My view is that a combination of new management, better ore grades, and economies of scale as production volumes increase, will see a significant improvement in the AISC in 2020 and beyond.

The gold is there in good grades, it just takes time to reach economies of scale. With two new key management appointments (CEO & COO) who have over 55 years of combined mining experience (especially underground), it looks highly likely that the problems of 2019 will soon be turned around in 2020.

Harte Gold Corp. is headquartered in Toronto, Ontario, Canada; and has a market cap of C$ 91 million. Analyst’s consensus is a buy with a price target of C$ 0.40, representing an upside of ~185%.




Another giant leap for Nova Leap as they record a 685% EBITDA year on year increase in Q3, 2019

Investors should put this home health care stock on the top of their watch list before it moves even higher. The Company has now achieved nine consecutive quarters of revenue growth, and as a result the stock is up 38% in the last six months, and 58% in the last three months. Even better for investors is that this Canadian gem is still very cheap with a market cap of just C$ 23 million, due to the early stage of the Company. It operates in the booming US and Canadian health care sectors, in the in-demand area of home health care.

Nova Leap stock price surges higher on strong growth

The stock is Nova Leap Health Corp. (TSXV: NLH) and it is based in Nova Scotia, Canada. Nova Leap acquires, manages, and builds home care service companies. Nova Leap is geographically diversified with operations in 5 different U.S. states: Vermont, New Hampshire, Massachusetts, Rhode Island and Oklahoma as well as Nova Scotia, Canada.

Just released last week their Q3, 2019 financial results were a record for the Company, reporting a 685% EBITDA increase over the same quarter in 2018. Q3, 2019 EBITDA of US$324,676 increased 49.2% over Q2 2019 EBITDA of US$217,549. And the giant leaps don’t stop there, the Company achieved over US$4.4 million in Q3, 2019 revenue, the nine consecutive quarter of revenue growth.

Nova Leap President & CEO Chris Dobbin stated: “Third quarter results were the best in our Company’s history. From a financial perspective, our focus remains on cash flow growth in existing operations and the deployment of free cash flow to high return potential opportunities.”

Nova Leap achieves nine consecutive quarters of revenue growth

Nova Leap has acquired Keystone Homecare and Around The Clock Home Care

Nova Leap continues to acquire small home care businesses and has announced their latest acquisition in Massachusetts. Previously announced on September 25, 2019, Nova Leap has now completed the acquisition of the business assets of Keystone Homecare LLC, located in Stow, Massachusetts.

This news is a follow up to the announcement the Company made in early October on the completed acquisition of the business assets of Around The Clock Home Care, located in Chickasha, Oklahoma. It’s noted that these two latest acquisitions in Oklahoma and Massachusetts, were not reflected in the Q3 results. These are just two recent examples of the Company’s rapid expansion.

Nova Leap is steadily moving up the rankings

Nova Leap achieved the #10 ranking in the 2019 TSX Venture 50™ in the Clean Technology & Life Sciences sector. Announced on September 2019, Nova Leap now ranks at number 4 on the 2019 Canadian Business and Maclean’s Start-up 50 ranking of Canada’s Top New Growth Companies.

Nova Leap’s business model

Nova Leap’s model of success is acquiring small home care businesses in Canada and the US. Combined these small businesses are forming the beginning of what the Company believes will be a large international organization. As the business scales up margins are improving, helped by reduced head office costs as a percentage of revenue. For example, head office costs as a percentage of revenue have fallen from 53% in 2017, to 5.6% in Q3 2019. This trend demonstrates the Company’s ability to scale the business with existing personnel and infrastructure.

The criteria they follow is simple, a geographical focus on the US and Canada, a positive EBITDA with a strong reputation/brand, and ideally have a 10 year history with US$1 million plus in revenues.

Demographics are a strong tailwind for Nova Leap

An aging population in most western countries is requiring more and more home care. Each day in the US over 10,000 people are turning 65, and the baby boomer generation is retiring in droves. The non-medical home care market is a massive $5.4 billion dollar opportunity (6.1% of the $89.2 billion U.S. home health care market revenue).

Nova Leap sees massive opportunities ahead in acquiring established home health care facilities in safe countries. Home health care is a very fragmented industry with no major players having a dominant percentage of the market. Nova Leap strategy is to fill that role as the home care industry is one of the fastest growing industries in the U.S.A.

Nine consecutive quarters of revenue growth shows Nova Leap is really “leaping” ahead. Investors should also be reminded that the name ‘Nova’ means ‘a star that suddenly becomes thousands of times brighter’. The future looks very bright for Nova Leap Health Corp.




Electric pickup trucks are coming soon – The Tesla pickup reveal is on November 21

Electric bikes, sedans and SUVs are all now regularly seen on our roads, but soon we will start to see electric trucks of all types and sizes.

The Tesla electric pickup truck

This coming November 21 is the Tesla (NASDAQ: TSLA) all-electric pickup truck reveal. The Tesla pickup, also nicknamed the “Cybertruck”, is said to look like something from the movie Blade Runner. In October Elon Musk tweeted: “Cybertruck doesn’t look like anything I’ve seen bouncing around the Internet. It’s closer to an armored personnel carrier from the future.”

The base model price is said to be under US$50,000. Range is expected to be between 400 and 500 miles depending on the version. Production dates are yet to be released.

Elon has said the e-pickup truck will be “a better truck than an F-150 in terms of truck-like functionality, and be a better sports car than a standard (Porsche) 911.”

Other Tesla products expected soon are the Tesla Roadster 2 and Tesla Semi (said to be entering production in 2020), as well as Tesla Model Y (deliveries starting possibly in late 2020).

The Tesla electric pick up truck mystery – What will it look like?

The Rivian electric pickup truck

Another electric truck coming soon that has already had a great response from the public is the Rivian electric pickup truck, known as the ‘Rivian R1T pickup’. It will have a range of ~400 miles, 4 electric motors which will accelerate from 0-60mph in just 3 seconds, and a starting price of US$69,000. It is currently in the testing stage and first deliveries are set to begin in late 2020. Both Amazon and Ford are backers of the company which is still not yet listed.

The Rivian R1T pickup will be perfect for taking on a road trip

The all-electric Ford F-150

Even the current US pickup truck leader Ford is racing to have an electric pickup as soon as possible. Ford is the undisputed leader in US conventional pickup truck sales.

The key takeaway for investors is that the electrification of the entire transport fleet is coming, noting long range planes will be conventional or hybrid. Electric pickup trucks are just around the corner.

Based on past performance Tesla is the one to beat, given they dominate the US electric car market sales with 57% market share, and are the global number 1 electric car seller with 16% global market share. Tesla previously disrupted the luxury large sedan market with Model S, and is now disrupting the small and mid-size luxury sedan market with Model 3. Rivian (private) look to have a great niche product for those on a high budget, and Ford should benefit from their loyal pickup customer base, but certainly look likely to lose market share.

For now my money is on Tesla. Tesla Model 3 sales is dominating the luxury car market of conventional cars in the US and its production in China is about to begin. They have a great pipeline of new EV products ahead (Semi, Roadster 2, Pickup, and Model Y), their energy storage products (Powerwall, Powerpack, and now Megapack), as well as their solar roof. Tesla was profitable last quarter but still has a lofty forecast 2021 PE of 49, and an analyst’s consensus “hold” and price target of US$285. I think this price target will be upgraded if China Model 3 sales go well, and Tesla’s profits start to increase each quarter.




The revolutionary AI technology that works for generators, electric motors, and also for batteries

Electric motors have been around for a long time; however, they have one flaw – They operate within a limited range of torque (turning or rotational energy of an engine). Or put another way, electric motors have limited efficiency to operate over a broad speed range. In practice, this means the better electric cars need at least two electric motors – one for slower speeds, and one for highway speeds, as there is no gearbox like a conventional car.

However, this is all changing now with a new technology that uses Artificial Intelligence (AI) to adjust and manage the electrical output, somewhat like how a gearbox works in a car. The technology works for generators, electric motors, and also for batteries. It is simply revolutionary.

Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF), the company that is pioneering and commercializing this technology, states that it is “revolutionizing energy conversion to improve performance, efficiency and longevity in electric motors, batteries and generators.”

Exro’s technology aims to pioneer the way energy is stored, transferred and used by keeping the energy flowing at an optimal rate. They are doing this by commercializing an intelligent energy management system (IEMS) that uses Artificial Intelligence (AI) and big data analytics to change the way energy is transferred, used, and stored. By creating a dialogue between motor coil switching, motor controls, and battery management systems, Exro creates a system that brings together and integrates several disciplines, to improve efficiency, reliability, safety and maintenance.

Exro Technologies revolutionary intelligent energy management system

Exro’s patented Dynamic Power Management (DPM) system is a proprietary software that controls electric motor coils through individual coil switching and expands speed/torque capability and improves machine efficiency across a wider operating range.

Exro’s technology also helps lithium ion batteries last longer

This technology also applies the principle of managing energy as it converts at the individual level to lithium ion batteries, by managing the charge and discharge of energy at the individual cell level of the battery. The aim is to improve the battery performance and efficiency, which should result in longer usage and possibly a second life of a battery. Exro’s technology seeks to give a useful second life to billions of batteries that today are thrown away.

Collaboration with Potencia Industrial

As a result of successful testing, the company has received its first production order for motor drivers from Potencia Industrial. The motor drivers are designed for independent integration as well as being one of five modular units that comprise the overall Intelligent Energy Management System. The Driver connects the battery to the electric motor and enables the motor to run with greater efficiency with high reliability and safety features.

Potencia is integrating Exro’s motor drivers into vehicles that have been identified for the conversion of internal combustion engines to electric motors. Potencia is working on converting taxis in Mexico City from conventional to electric vehicles (EVs). The city has 250,000 taxis all needed to be converted to EVs.

Delivery is anticipated to start in Q1 2020 and will be done in phases allowing Exro to ramp up production while optimizing processes.

Sue Ozdemir, CEO of Exro, stated: “This is a big milestone for the Exro team as it marks another success in tackling the energy market and utilizing our technology to partner with companies who are working to make a difference.”

Electric motors run almost every machine in society

Collaboration with Lithium Werks

In collaboration with Lithium Werks (a large Chinese battery manufacturer), Exro is applying its technology to the lithium-ion battery to be able to make the battery work more efficiently and extend battery life. Also if one battery cell fails instead of losing the whole battery, Exro’s technology is able to do a workaround that can by-pass the damaged cell and keep the battery working.

The market opportunity for Exro’s technology is enormous

This is just the start of the Company’s strategic commercialization initiatives as they look to grow partnerships with customers around the world. The market for better electric motors, generators, and batteries is enormous. Exro is at the cutting edge of both future design and commercialization and is already in collaboration with two large and successful global companies.

Exro Technologies Inc. is a Vancouver, BC-based technology company with a market cap of just C$ 20 million.




Awaiting the U.S. Nuclear Fuel Working Group outcome has uranium investors eyeing UR-Energy

Uranium has been much unloved for some years now but this could all be about to change as soon as next week, at least in the USA. The Nuclear Fuel Working Group (NFWG) recommendations are now due by November 10, 2019. The results are hoped to boost the US uranium miners.

Several groups such as hedge funds and Yellowcake Physical Fund have been strategically buying up uranium (16m lbs) the past year with the expectation that uranium prices can only go up from the current depressed levels of US$24.20/lb. All of this means it is an excellent time to look at the US uranium miners, and ideally the lower-cost producers.

Uranium demand v supply – Deficits possible post 2023 (includes inventory)

Source

Ur-Energy Inc. (NYSE American: URG | TSX: URE) is one of only a very few primary US uranium producers still able to operate in today’s tough market conditions. This is because in the past they signed long term uranium supply contracts at much better prices than today’s terrible prices. Their flagship project is the Lost Creek Property, and they also have several other projects (Shirley Basin, Lost Soldier).

The Lost Creek Property and the Lost Creek In-Situ Recovery (ISR) uranium facility 

Ur-Energy owns and operates the Lost Creek In-Situ Recovery (ISR) uranium facility in south-central Wyoming, USA. The processing facility has two million pounds per year physical design capacity. The Lost Creek Property represents the composite of six individual contiguous projects of which the core Lost Creek Project is fully-licensed and operating, the other projects are collectively referred to as the Adjoining Projects. The current mineral Resource estimate for the Lost Creek Property is 13.251 million pounds of contained uranium Measured and Indicated and 6.439 million pounds Inferred. An amended Preliminary Economic Assessment (PEA) was issued in early 2016. Life of Mine OpEx was forecast to be $14.58/lb U3O8.

Lost Creek Property and Shirley Basin Project location map

Shirley Basin Project

Ur-Energy’s newest project, Shirley Basin, is one of the Pathfinder Mines assets that were acquired in 2013. Baseline studies necessary for permitting and licensing of the project are complete, and the application for a permit to mine has been submitted, with work on other permits underway. Shirley Basin is planned to go into production soon ramping up to 2021 with a low cost of production at about US$14.50/lb U3O8.

Ur-Energy uranium production, sales, cash and loan update

In 2018 Ur-Energy produced 2.7mlbs of U3O8, selling on long term contracts at ~US$49/lb, as a US low cost producer. In Q3 2019 the Company sold 122,500 ‘purchased’ pounds under term contracts at an average price of US$41.76/lb. The ‘purchased’ U3O8 was bought for an average price of US27.68/lb.

As of October 31, 2019 Ur‐Energy had $6.6 million in cash and 90,000 pounds of U3O8 to be sold in December at $60 per pound. With a renegotiated State Bond Loan, the Company expects to enter 2020 with a strong cash position and nearly 250,000 pounds of product inventory ready to sell.

Ur‐Energy CEO, Jeff Klenda, stated: “We find ourselves in the enviable position of awaiting the outcome of the U.S. Nuclear Working Group without the need for near‐term financing. We will defer six quarters’ principal payments on the State Bond Loan, while continuing to make quarterly interest payments. The deferred payments, beginning with the October 1 payment, represent approximately $8 million savings for that period. Considering our financial position and the ability to ramp‐up our operating, low‐cost Lost Creek mine quickly and cost‐efficiently, we have a distinct advantage over our peers.”

Nuclear utilities generally don’t support US uranium producers

US uranium producers are arguing imports have hurt their business, reducing prices and forcing them to cut production and place mines on standby. Simply put, domestic miners can’t compete with low prices from Russia and former Soviet republics. Nuclear Utilities, by contrast, have argued that uranium is plentiful and that allies like Australia and Canada are reliable suppliers. The reality is that the US uranium mining industry produces less than 1% of the uranium needed to fuel U.S. nuclear power plants and there is a lack of any domestic uranium enrichment capability for national security applications.

The bottom line is if the US wants 100% security of uranium supply then the best way is to support US uranium producers. We should all know the NFWG’s recommendations very soon (by November 10). Any significant support for US uranium producers should be a boost for UR-Energy and hopefully end the bear market for US uranium miners.

Ur‐Energy is cash flow positive with a producing US uranium mine, a second uranium project close to production (next 2 years), and other projects to follow. This gives Ur-Energy an ability to very significantly ramp up uranium production at a relatively affordable CapEx and low OpEx.




Could video production be as simple as a better Moovly?

Did you know that revenue generated from online video content is forecast to increase from US$20.68 billion in 2016 to US$43.6 billion in 2027? With video becoming a key medium for advertising and communication, could the days of the redundant PowerPoint finally be replaced with something more engaging — entertaining even perhaps? Youtube or Facebook show just how popular video content has become with millions of new videos posted online each month. Social media, blogging, branded videos and informational presentations are all commonly presented using some form of video but what if you could do it yourself and faster than you could create (yet another) marketing deck? Or just as ‘cool’, you can slide your marketing deck into a production system that will add a soundtrack and make it come alive?

One way for investors to invest in this boom in online video content is by buying shares of the companies that offer the tools to produce the best video content.

One such company is Moovly Media Inc. (TSXV: MVY | OTCQB: MVVYF). Moovly provides a cloud-based platform (SaaS) that enables users to create and generate multimedia content such as animated videos, video presentations, animated infographics and any other video content that includes a mix of animation and motion graphics.

Moovly has created an intuitive and simple video creation software. It is an easy online tool to create professional-looking videos or video presentations for social media or other personal or business needs. Using a combination of uploaded images, videos and sounds, as well as a pre-defined library of objects, users are able to quickly assemble new animated content. The final videos or presentations can be downloaded as an MP4 for example, or published on a variety of video platforms. The software uses a simple drag & drop application with access to a library with millions of images, videos and sounds enabling users to build videos without any expert video making skills.

Video made easy with Moovly

Moovly is improving their product to stand out from the competition

A number of market leading features have been added recently to the Moovly product such as subtitling, screen recording, webcam recording, green screen removal. The Company has designed the new features to meet the demand and requests of the increasing number of large organizations and educational institutions choosing Moovly. Moovly has also made its software integrate with Powerpoint, Google and PayPal. All of these features help differentiate Moovly from the competition and add significant value.

Moovly has also expanded its target market with new offerings “Business” and “Edu Max” subscriptions. The later was designed to cater to the needs of the growing number of educational users on Moovly’s platform. The Business subscription is available at $599 per year, while the Edu Max version comes at an introductory price of $249 for users with an approved educational email domain.

Moovly wins Amadeus contract

After a competitive evaluation process, Moovly was selected as the best solution to provide Amadeus IT Group, a leading technology provider for the global travel industry, with a corporate video creation platform for its 15,000 employees worldwide.

Moovly is now creating video content for Amadeus IT Group

Fernando Diez, Senior Platform & Project Manager at Amadeus stated: “We did a thorough evaluation of the market through a tender process and after a detailed evaluation of Moovly and competitors, selected Moovly. Our experience since signing has been excellent and have found Moovly to be both responsive and flexible to our needs.”

Moovly offers access to Getty images

Moovly Media Inc. has also partnered with the world leader in visual communications, Getty Images, in opening up access to tens of millions of digital assets from within the Moovly platform. This integration allows Moovly users to access the impressive digital asset stock libraries (sounds, images, videos) from Getty Images and iStock seamlessly inside the Moovly Studio Editor.

Brendon Grunewald, Co-Founder and CEO of Moovly, stated: “Moovly is excited to be working with Getty Images, as it will provide millions of world-class stock media to customers of Moovly. This is an important step in our partner integration strategy, which has started to show results.”

Moovly business model and financials

Revenue is primarily generated from subscription fees with over 90% gross margin, and charges a monthly pro rata subscription price or an annual fee. As of 30 September 2018 Launch Pro subscriptions cost US$49/month or US$299/year. As discussed earlier there are also tailored offerings such as “Business” and “Edu Max” charging at $599/year and $249/year.

Revenue for the year ending 30 September 2018 was $892,751 compared to $559,185 the previous year, representing a 37% YoY increase. Earnings were negative $0.03 per share. As Moovly grows revenue the high gross margin will mean profits will also grow in line with revenue, making for a very profitable company if all goes to plan.

Moovly’s vision is to become the number 1 platform for engaging, customizable multimedia content creation by making it affordable, intuitive and simple.

The recent Amadeus contract (15,000 employees) shows Moovly is moving up in the world. It will help Moovly access other large travel or tourism companies. Also, their new business and educational offerings will open up huge new marketplaces. Moovly clients already include users from >300 of the Fortune 500, small businesses, freelancers and Ivy league universities.

Moovly is now moving in the right direction, and still has a low market cap of just C$ 5.3 million. Huge potential if they can continue to pick up more large contracts.