While having a few successful picks in early 2019 like MICT and LMFA, we have yet to make Canadian pick. That is about to change as Scorpio Gold Corporation (SRCRF) (SGN.V) rose 86% in the U.S. and 67% in Canada on over 16 million volume traded between both listings upon announcing a very lucrative financing deal. While the stock rose to $0.025 in Canada, we think it can go at least to $0.05 in short order, particularly if the heavy volume continues. We are up to 774 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel. You can also follow us on Twitter @StockTradePicks. We have over 3,500 followers on Twitter as well.
The news release today showed us that SGN got $6 million U.S. in debt financing convertible at $0.08 U.S. per share (or over $0.10 Canadian). Note carefully that this conversion can be done by the company as well as the holder. The deal will close conditional on a 2-for-1 stock consolidation so the effective conversion rate is $0.04 U.S., but it comes with a bunch of other benefits:
Scorpio Gold Announces US$6 Million Convertible Debenture Private Placement Financing
VANCOUVER, British Columbia, Jan. 28, 2019 (GLOBE NEWSWIRE) -- Scorpio Gold Corporation (“Scorpio Gold” or the “Company”) (TSX-V: SGN) is pleased to announce a non-brokered private placement offering (the “Private Placement”) of secured convertible debentures (each, a “Debenture”) for gross proceeds of up to US$6,000,000. The Company intends to use the net proceeds from the Private Placement for the Buyout (as defined below) and for general working capital purposes.
Each Debenture will have an issue price of US$1,000, a term of three years from the date of issuance and will bear interest at a rate of 10% per annum, payable semi-annually, which, subject to regulatory approval, may be paid in common shares of the Company (“Shares”) at the option of the Company or the holder of the Debenture. The Debentures will be secured by a security interest subordinate to all existing and future senior indebtedness of Company, including any future senior indebtedness in connection with the construction of a new processing plant at the Mineral Ridge Project.
Each Debenture is convertible into Shares at the option of the holder at any time prior to maturity at a conversion price of US$0.08 per Share (the “Conversion Price”), which is equivalent to 12,500 Shares for each US$1,000 principal amount of Debentures, subject to adjustment in certain circumstances. Debentures must be converted in minimum amounts of US$1,000. The Company will have the option on maturity, subject to regulatory approval, to repay any portion of the principal amount of the Debentures in cash or by issuing and delivering to the holders of the Debentures such number of Shares equal to the principal amount of the Debenture divided by the Conversion Price.
Prior to the issuance of the Debentures, the Company will complete a 2:1 consolidation of its Shares (the “Share Consolidation”). The Company intends to seek shareholder approval of the Share Consolidation at a special and general meeting of its shareholders to be held on February 27, 2019.
The closing of the Private Placement is subject to certain conditions including, but not limited to, the acceptance of the TSX Venture Exchange (the “Exchange”), the completion of the Share Consolidation, and the concurrent completion of the Buyout (as defined below). The Debentures and Shares issued upon conversion thereof will be subject to a four month hold period from the date of issuance of the Debentures in accordance with applicable securities laws and, if required, the policies of the Exchange. A finder’s fee within Exchange policy guidelines may be paid in Debentures in connection with the Private Placement.
The Company intends to use US$3,000,000 of the proceeds of the Private Placement to fund (i) the settlement of the loan advanced from Waterton Precious Metals Fund II Cayman, LP (the “Lender”) to Scorpio Gold, pursuant to the terms of a senior secured credit agreement among the Company, its subsidiaries and the Lender, which was originally announced in the Company’s press release dated August 17, 2015 (the “Credit Facility”), (ii) the termination of a gold and silver supply agreement dated May 18, 2011 among the Company, Scorpio Gold (US) Corporation (“Scorpio Gold US”), Mineral Ridge Gold, LLC (“Mineral Ridge Gold”) and an affiliate of the Lender; and (iii) the purchase of the 30% membership interest of Elevon LLC (“Elevon”) in Mineral Ridge Gold (which holds the Mineral Ridge Project) and the termination of an operating agreement dated March 10, 2010 between Scorpio Gold US and Elevon, (collectively, the “Buyout”). Scorpio Gold has entered into a non-binding letter of intent with the Lender in connection with the Buyout, and intends to enter into definitive agreements with the Lender and its affiliates in connection with the Buyout on or prior to the closing of the Private Placement. Additionally, the Company and the Lender have entered into a further binding forebearance agreement in respect of the Credit Facility, pursuant to which the Lender has extended the maturity date of the Credit Facility to March 4, 2019. The Company intends to close the Private Placement and the Buyout on or about March 4, 2019.
$3 million of the debt was used to expunge a $6 million loan from Waterton and buy back the 30% interest in Mineral Ridge so SGN becomes 100% owner. This is important because now it paves the way for the company to obtain further debt financing for the purpose of opening a processing mill and re-opening this profitable mine. SGN has the following to say about it on its website:
"Mining was suspended at Mineral Ridge in early November 2017. On January 4, 2018, the Company announced an updated feasibility study outlining positive economics for processing the residual heap leach material and mining of higher-grade mineralization in the existing pits. The study provides ~7.5 years of additional mine life at Mineral Ridge and 250,500 oz. life of project gold sold at a total cash cost of US$805/oz. The Company is pursuing financing for the construction of a 4,000 TPD milling facility with CIL recovery and dry stack tailings circuit."
Q3 financials shows that SGM is profitable, though this revenue stream is due to dry up shortly as the remaining gold left from prior to suspending operations is produced:
The upfront capex needed to extend the mine life is $35 million which isn't nothing, but less than many other projects out there given the existing infrastructure and mining history at the site. Given that the company was able to find $6 million of financing at very favourable terms and use $3 million of that to expunge $6 million of debt and buy the 30% stake bodes well for believing that management can pull it off. At $0.025, SGN has a market cap of only $3 million in Canada. We think $0.05 is rather achievable in the short term given the new life today's deal provides.
Disclosure: We are long SGN.V
2018 was a wild roller-coaster for the stock market, but a bad time in general for microcap stocks. Still, we made good money on some microcap stocks if you look at our picks over the course of 2018, both longs and shorts. As we head out of a volatile 2018 and into 2019, we have to figure out what's next. TradeMiner identifies seasonal trends and market cycles while the Penny Stock Prophet and Microcap Millionaires find the next big small cap plays in a multitude of industries.
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
The news release today showed us that SGN got $6 million U.S. in debt financing convertible at $0.08 U.S. per share (or over $0.10 Canadian). Note carefully that this conversion can be done by the company as well as the holder. The deal will close conditional on a 2-for-1 stock consolidation so the effective conversion rate is $0.04 U.S., but it comes with a bunch of other benefits:
Scorpio Gold Announces US$6 Million Convertible Debenture Private Placement Financing
VANCOUVER, British Columbia, Jan. 28, 2019 (GLOBE NEWSWIRE) -- Scorpio Gold Corporation (“Scorpio Gold” or the “Company”) (TSX-V: SGN) is pleased to announce a non-brokered private placement offering (the “Private Placement”) of secured convertible debentures (each, a “Debenture”) for gross proceeds of up to US$6,000,000. The Company intends to use the net proceeds from the Private Placement for the Buyout (as defined below) and for general working capital purposes.
Each Debenture will have an issue price of US$1,000, a term of three years from the date of issuance and will bear interest at a rate of 10% per annum, payable semi-annually, which, subject to regulatory approval, may be paid in common shares of the Company (“Shares”) at the option of the Company or the holder of the Debenture. The Debentures will be secured by a security interest subordinate to all existing and future senior indebtedness of Company, including any future senior indebtedness in connection with the construction of a new processing plant at the Mineral Ridge Project.
Each Debenture is convertible into Shares at the option of the holder at any time prior to maturity at a conversion price of US$0.08 per Share (the “Conversion Price”), which is equivalent to 12,500 Shares for each US$1,000 principal amount of Debentures, subject to adjustment in certain circumstances. Debentures must be converted in minimum amounts of US$1,000. The Company will have the option on maturity, subject to regulatory approval, to repay any portion of the principal amount of the Debentures in cash or by issuing and delivering to the holders of the Debentures such number of Shares equal to the principal amount of the Debenture divided by the Conversion Price.
Prior to the issuance of the Debentures, the Company will complete a 2:1 consolidation of its Shares (the “Share Consolidation”). The Company intends to seek shareholder approval of the Share Consolidation at a special and general meeting of its shareholders to be held on February 27, 2019.
The closing of the Private Placement is subject to certain conditions including, but not limited to, the acceptance of the TSX Venture Exchange (the “Exchange”), the completion of the Share Consolidation, and the concurrent completion of the Buyout (as defined below). The Debentures and Shares issued upon conversion thereof will be subject to a four month hold period from the date of issuance of the Debentures in accordance with applicable securities laws and, if required, the policies of the Exchange. A finder’s fee within Exchange policy guidelines may be paid in Debentures in connection with the Private Placement.
The Company intends to use US$3,000,000 of the proceeds of the Private Placement to fund (i) the settlement of the loan advanced from Waterton Precious Metals Fund II Cayman, LP (the “Lender”) to Scorpio Gold, pursuant to the terms of a senior secured credit agreement among the Company, its subsidiaries and the Lender, which was originally announced in the Company’s press release dated August 17, 2015 (the “Credit Facility”), (ii) the termination of a gold and silver supply agreement dated May 18, 2011 among the Company, Scorpio Gold (US) Corporation (“Scorpio Gold US”), Mineral Ridge Gold, LLC (“Mineral Ridge Gold”) and an affiliate of the Lender; and (iii) the purchase of the 30% membership interest of Elevon LLC (“Elevon”) in Mineral Ridge Gold (which holds the Mineral Ridge Project) and the termination of an operating agreement dated March 10, 2010 between Scorpio Gold US and Elevon, (collectively, the “Buyout”). Scorpio Gold has entered into a non-binding letter of intent with the Lender in connection with the Buyout, and intends to enter into definitive agreements with the Lender and its affiliates in connection with the Buyout on or prior to the closing of the Private Placement. Additionally, the Company and the Lender have entered into a further binding forebearance agreement in respect of the Credit Facility, pursuant to which the Lender has extended the maturity date of the Credit Facility to March 4, 2019. The Company intends to close the Private Placement and the Buyout on or about March 4, 2019.
$3 million of the debt was used to expunge a $6 million loan from Waterton and buy back the 30% interest in Mineral Ridge so SGN becomes 100% owner. This is important because now it paves the way for the company to obtain further debt financing for the purpose of opening a processing mill and re-opening this profitable mine. SGN has the following to say about it on its website:
"Mining was suspended at Mineral Ridge in early November 2017. On January 4, 2018, the Company announced an updated feasibility study outlining positive economics for processing the residual heap leach material and mining of higher-grade mineralization in the existing pits. The study provides ~7.5 years of additional mine life at Mineral Ridge and 250,500 oz. life of project gold sold at a total cash cost of US$805/oz. The Company is pursuing financing for the construction of a 4,000 TPD milling facility with CIL recovery and dry stack tailings circuit."
Q3 financials shows that SGM is profitable, though this revenue stream is due to dry up shortly as the remaining gold left from prior to suspending operations is produced:
Disclosure: We are long SGN.V
2018 was a wild roller-coaster for the stock market, but a bad time in general for microcap stocks. Still, we made good money on some microcap stocks if you look at our picks over the course of 2018, both longs and shorts. As we head out of a volatile 2018 and into 2019, we have to figure out what's next. TradeMiner identifies seasonal trends and market cycles while the Penny Stock Prophet and Microcap Millionaires find the next big small cap plays in a multitude of industries.
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
The dividend stock report from Dividend Stocks Rock
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Bitcoin has gone from a concept worth pennies a few years ago to worth thousands of dollars. It may appear to some who are late to the game that the opportunity to get rich is gone. However, there are still plenty of ways to make some money trading in bitcoin and other cryptocurrency. Here are some links to valuable reports and strategies:
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
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