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.

MI3 Market Alert: Rapid Pathogen detection system

Mario Drolet President of MI3 Communications Financières Inc. (MI3) released a technical note at market open today on LexaGene Holdings Inc. (TSXV: LXG | OTCQB: LXXGF) for exclusive distribution on InvestorIntel. In this note, MI3 highlighted the following points on LexaGene Holdings Inc.

  • LexaGene is a biotechnology company that develops genetic analyzers for pathogen detection and other molecular markers for on-site rapid testing in veterinary diagnostics, food safety and for use in open-access markets such as clinical research, agricultural testing and biodefense.
  • LexaGene Places its First Beta Prototype into Massachusetts Veterinary Referral Hospital.
  • This placement marks a very significant milestone for the Company and for the diagnostics industry.
  • LXG close a 6.64 Million with Industrial Alliance securities
  • Support: S2; $ 0.45 – S1; $ 0.47     Resistance:   R1; $ 0.50 –   R2; $0.545

About LexaGene Holdings Inc.

LexaGene is a biotechnology company that develops genetic analyzers for pathogen detection and other molecular markers for on-site rapid testing in veterinary diagnostics, food safety and for use in open-access markets such as clinical research, agricultural testing and biodefense. End-users simply need to collect a sample, load it onto the instrument with a sample preparation cartridge, enter sample ID and press ‘go’. The LX Analyzer delivers excellent sensitivity, specificity, and breadth of detection and can process multiple samples at a time, in an on-demand fashion, returning results in about 1 hour. The unique open-access feature is designed for custom testing so that end-users can load their own real-time PCR assays onto the instrument to target any genetic target of interest.


Disclaimer: This MI3 Technical Note produced by MI³ Communications Financières is neither an offer to sell, nor the solicitation of an offer to buy any of the securities discussed therein. The information contained is prepared by MI3, emanating from sources deemed to be reliable. MI3 Communications Financières makes no representations or warranties with respect to the accuracy, correctness or completeness of such information. MI³ Communications Financières accepts no liability whatsoever for any loss arising from the use of the information contained therein. Please take note that for compliance purposes, all directors, consultants or employees of MI3 Communications Financières are prohibited from trading the securities of the company and MI3 Communications Financières is a shareholder and do not intend to sell any shares during the distribution of this note.

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.

New AI methods attract capital to mining sector

Here is an unavoidable truth. Resource extraction is hard physical work. Even in today’s tech-happy world, there’s no app for that. And perhaps this is the very reason modern investors have wandered away from mining—whether or not it’s to their benefit. New AI methods may change that.

Just like society, many investors today are overlooking the connection between the products we use and the source of the materials to make them. And yet it’s still true that “if you cannot grow it, you have to mine it.” Comically, we see generous valuations for end products but outright hostility toward the companies providing the basic materials to create the products. New flashy sectors like digital currencies, online commerce and cannabis are grabbing the spotlight while the basic source of materials for many everyday needs falls into the shadows.

Yes, some of this shunning may be deserved. The mining industry for the most part is still trying to use a classical economics appeal to attract investors. They trot out supply and demand fundamentals, and costs of production, hoping the market will make rational investment choices based on the facts. But as much as investors claim to be rational, there is a significant chunk of sentiment associated with attracting capital to any sector.

It will take more than just facts to win back investors. Some may hold a negative impression or position on the sector, one that has been reinforced with poor performance in recent years. And so funding for mining exploration is declining and, not surprisingly, so are discoveries.

But here is another unavoidable truth. Demand for resource materials increases alongside the development of society.

The next generation of ideas

The industry needs to attract capital with new ideas to streamline the process of value creation. To illustrate, let’s look at GoldSpot Discoveries Corp. (TSXV: SPOT). GoldSpot is a technology company striving to be a disruptor in the industry of mining exploration and investment. Its proprietary technology uses AI and machine learning to interpret underused data and to spot sites with the potential to host a mineral deposit.

Mining a mountain of data

The simple idea behind the big-data idea is to exploit the abundance of data collected in the world’s mining camps. In the past, there was not enough time, talent and skill to evaluate it all, even as still more data was being created. GoldSpot uses AI and machine learning and other tools to organize and analyze the data. The geologist spends less time collecting the data and more time interpreting the results—potentially making new discoveries.

GoldSpot is confident in its abilities to use machine learning to identify good exploration projects and the company wants to participate in their development and success through investments, royalties and consulting work. Their list of clients already includes significant names from the industry: Hochschild Mining, McEwen Mining, Sprott Mining and Yamana Gold.

Recently GoldSpot announced that Gran Colombia Gold Corp. used their methods at their Segovia project. The preliminary targets were confirmed through drill results at near mine and regional targets. This truly is a new idea: a client company that gives confirmation and relates success to the service provider. In the mining sector, new technology often faces challenges in development, promotion and acceptance. The sector does not change its methods quickly.

Fast on the heels of this success came the announcement of a $15 million strategic investment by Eric Sprott and plans for a 70,000 m drilling program on the Segovia project to further test these targets. This too validates GoldSpot’s AI and machine learning methods for doing exploration differently.

Now GoldSpot is working on another significant opportunity to showcase their method and further develop their tools. Through a deal with Metal Earth project and Laurentian University, GoldSpot will sort through this significant and large dataset to identify the characteristics of metal endowment in Canada’s mining camps.

The AI effect on the market

Impressively, quantitative analysis of the markets is driving up to 65% of returns during the past 20 years. And more investment funds are using this method for stock selection. On the other hand, these methods are also partially responsible for the drop in investment in the mining sector, particularly in exploration. And yet GoldSpot is using these same methods to analyze exploration results and market data to identify the best targets for investing in this opportunity gap.

For the tech-minded investor or mining company, AI and machine learning methods are revealing opportunities that can change minds and grow investments for exploration.