MicroCap Review Fall 2019

www.stocknewsnow.com • $5.00

The Official Magazine of the MicroCap Stock Market Since 2006

Fall 2019

Issuer Direct Corporation Page

NYSE American: ISDR Brian Balbirnie, CEO www.issuerdirect.com

Theta Gold Mines Limited Page

ASX: TGM / OTCQB: TGMGF Bill Guy, Chairman www.thetagoldmines.com

12

26

Jaguar Health, Inc. Page

NASDAQ CM: JAGX Lisa Conte, CEO www.jaguar.health

16

SolGold PLC Page

LSE & TSX: SOLG / PINK: SLGGF Nick Mather, CEO www.solgold.com.au

20

FEATURED ARTICLES 24 The Information and Reliability Void 46 The Quiet but Dramatic Revolution in

By Robert Kraft, MBA

Mining….. By Jamie Strauss

56 How Medical Industry is Applying Advances

in Artificial Intelligence and Data Generation

By David Weinstein, MD

30 The Key Raw Materials Needed for the Rise of the Lithium Ion Battery Megafactories By Robert Colbourn

52 Inaccurate Negative Blog Articles Creating Opportunity for Long-term Investors

By Sam Namiri, MBA

64 How to Spot the Best of the Undiscovered

40 Q&A with Brent Cook, Exploration

54 A Nuclear Winter for Value Investors

66 Three Principles for Thriving Public Markets

Insights By Shelly Kraft

Materials Age 42 The Critical www.stocknewsnow.com

By Jon Hykawy, PhD, MBA

By Tobias Carlisle

By Brandon Mackie

76 Coloring Apps and Match-3 Games; Taking

Delicious

Facebook

Flickr

Twitter

Retweet

Mobile Apps to New Levels

By Ralph Garcea, P.Eng, MBA MySpace

90 When To Sell

Slash Dot

Mixx

Reddit

StumbleUpon

Digg

By Mathieu Martin Skype

Technorati

FriendFeed

YouTube

LinkedIn

Newsvine

SlideShare

Google

Google Talk

Yahoo

Yahoo Buzz

Netvibes

AOL

By Cromwell Coulson

70 Mining Industry 2019-Q&A with Rick Rule 74 Awesome Aussies By Richard Revelins

sEE aRTiclE on pagE 72

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BIGtoken is a consumer-managed data marketplace where people can own and earn from their digital data.

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E D I T O R I A L In Loving Memory of Our Precious Daughter, and Sister, Sammi Kane Kraft Published Since 2006

www.stocknewsnow.com Follow us: @StockNewsNow SNN Inc. 5839 Green Valley Circle Suite 205 Culver City, Ca. 90230 www.StockNewsNow.com PUBLISHER Shelly Kraft SNN Founder skraft@snnwire.com Lynda Lou “Lulu” Kraft SNN President & Director EXECUTIVE EDITOR Robert K. Kraft, MBA SNN Chief Executive Officer & Director rkraft@snnwire.com Wesley Ramjeet SNN Chief Financial Officer & Chairman info@snnwire.com ASIAN PACIFIC CORRESPONDENT Leslie Richardson SNN COMPLIANCE AND DUE DILIGENCE ADMINISTRATION Jack Leslie CHAIRMAN OF SNN ADVISORY BOARD Dr. Leonard Makowka ADVERTISING and SALES info@snnwire.com 424-227-9018 GRAPHIC PRODUCTION Unitron Media Corp info@unitronmedia.com SNN CONFERENCES info@snnwire.com 424-227-9018

MicroCap Review Magazine is published periodically. POSTMASTER send address Changes to MicroCap Review Magazine Corporate Offices. ©Copyright 2019 by MicroCap Review Magazine Inc. All Rights Reserved. Reproduction without permission of the Publisher is prohibited. The publishers and editors are Not responsible for unsolicited materials. Every effort has been made to assure that all Information presented in this issue is accurate and neither MicroCap Review Magazine or any of its staff or authors is responsible for omissions or information that is inaccurate or misrepresented to the magazine. MicroCap Review Magazine is owned and operated by SNN Inc.

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W

elcome to the Fall/Winter 2019 issue of the MicroCap Review and thank you for your support, readership and loyal following. It is our pleasure to continue to provide you with new investment ideas, opportunities, expert insights, market news, information, and industry leaders’ opinions in the Small, Micro, and NanoCap (SMN Cap) markets.

This issue contains profiled companies that are unique, disruptive, and/or undiscovered respectively - many of which the SNN team have met personally at financial conferences along the way. Most emerging growth companies, Small-, Micro- and Nano-Cap, are not normally covered by investment banks’ research analysts or buy-side analysts. In fact, many foreign listed or US dual listed F shares have also sparse coverage, requiring investors to take extra time and effort to uncover more information.

The wide variety of sectors covered in this issue includes: precious metals, base metals, communications, compliance, electric vehicles and batteries, healthcare, biotech, life sciences, digital marketing, technology, media, industrial equipment, green technology, gaming, and cannabis.

As investors, whether you are value, growth, GARP, we are all increasingly scouring the globe to discover the next multi bagger opportunity. So when you read through each profiled company, use your own common sense and intuitive judgment, reach out to each CEO directly, build your own personal checklist, and pick up insights from our expert writers - many of whom are professional investors! You will be surprised how company executives will be glad to speak with you and answer your questions.

Our expert writers cover many interesting topics such as: the benefits of duallisting, why Aussies are really awesome, and reasons why base metals shouldn’t be so misunderstood - after all, you want to drive electric cars, don’t you? For instance, in the article discussing the benefits of dual listing,

the author notes that additional liquidity, increased access to capital, and the capability for shares to trade for longer periods of time due to exchanges operating in different time zones as potential advantages. Whether this is your first or tenth time reading an issue of the MicroCap Review Magazine, this magazine offers worthwhile reading material meant for all levels and styles of investing.

Many of you have subscribed and read the MicroCap Review web issue rather than subscribe to our printed hard copy, and we thank you as we try and do our part for the environment. We thank our growing subscribership to the Planet MicroCap Podcast which Robert Kraft, SNN CEO, began over four years ago.

Our covenant with investors is to continue to provide information from an educational perspective and with the help of our cadre of expert contributors, we deliver on that promise.

Please visit our website stocknewsnow.com, and watch the SNNLive interviews since these too, like each company profiled in the magazine, are intended to help you discover new ideas and learn about each company’s story and their C-level management teams. As you follow these emerging growth stories you can continue to ask several inquiring questions such as: Has a company reached its milestones? Is the growth curve just beginning or is it non-existent? Are there new developments or updates? By getting immersed and being resolved to do your due diligence you can form your own thesis that can ultimately help shape your investment strategy.

Thank you for reading, subscribing, listening, viewing, meeting and following us throughout the year and we look forward to seeing you at this year’s Planet MicroCap Showcase 2020, April 21 – April 23, at Bally’s Las Vegas.

Shelly Kraft Publisher n

This publication and its contents are not to be construed, under any circumstances, as an offer to sell or a solicitation to buy or effect transactions in any securities. No investment advice is provided or should be construed to be provided herein. MicroCap Review Magazine and its owners, employees and affiliates are not, nor do any of them claim to be, registered broker-dealers or registered investment advisors. This publication may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Such forward-looking statements of or concerning the companies mentioned herein are subject to numerous uncertainties and risk factors, including uncertainties and risk factors that may not be set forth herein, which could cause actual results to differ materially from those stated herein. Accordingly, readers are cautioned not to place undue reliance on such forward-looking statements. This publication undertakes no obligation to update any forward-looking statements that may be contained herein. MicroCap Review Magazine, its owners, employees, affiliates and their families may have investments in companies featured in this publication, may purchase securities of companies featured in this publication and may sell securities of companies featured in this publication, at any time and from time to time. However, it is the general policy of this publication that such persons will refrain from engaging in any pre-publication transactions in securities of companies featured in this publication until two trading days following the publication date. This publication may contain company advertisements/advertorials indicated as such. Information about a company contained in an advertisement/advertorial has been furnished by the company, the publisher has not made any independent investigation of the accuracy of any such information and no warranty of the accuracy of any such information is provided by this publication, its owners, employees and affiliates. Pursuant to Section 17(b) of the Securities Act of 1933, as amended, in situations where the publisher has received consideration for the advertisement/advertorial of a company or security, the amount and nature of such consideration will be disclosed in print. Readers should always conduct their own due diligence before making any investment decision regarding the companies and securities mentioned in this publication. Investment in securities generally, and many of the companies and securities mentioned in this publication from time to time, are speculative and carry a high degree of risk. The disclaimers set forth at http://www.microcapreview.com/disclaimer/ - disclaimer are incorporated herein by this reference.

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CONTENTS F E AT U R E D A RT I C L E S

STOCKNEWSNOW.COM fall 2019

24

The Information and Reliability Void: Filling the Gap for Investors By Robert Kraft, MBA

64

How to Spot the Best of the Undiscovered

By Brandon Mackie

30

The Key Raw Materials Needed for the Rise of the Lithium Ion Battery Megafactories By Robert Colbourn

66

Three Principles for Thriving Public Markets

By Cromwell Coulson

40

Q&A with Brent Cook, Exploration Insights By Shelly Kraft

74

44

Why Young People Should Love Gold Stocks

By Lobo Tiggre

Awesome Aussies: “The Upside to Down Under Stocks” By Richard Revelins

82

46

The Quiet but Dramatic Revolution in Mining…..

By Jamie Strauss

A Case Study: Using SEC Filing Information Arbitrage to Protect Your Portfolio

By Maj Soueidan

52

Inaccurate Negative Blog Articles Creating Opportunity for Long-term Investors By Sam Namiri, MBA

86

Give it Away - The Million You Never Made: You Are a Product By Sean Peasgood

54

A Nuclear Winter for Value Investors By Tobias Carlisle

90

When To Sell: 8 Reasons To Put A Stock Up For Sale By Mathieu Martin

56

How Medical Industry is Applying Advances in Artificial Intelligence and Data Generation

By David Weinstein, MD

94

Is Gold About to Lose It’s Luster?

By Steven M. Shelton, MS, MBA, CFP®, CLU, CHFC, TEP, CIMA®, CMT

Profiled Companies 8 BioHiTech Global, Inc. NASDAQ CM: BHTG 12 Issuer Direct Corporation NYSE American: ISDR 16 Jaguar Health, Inc. NASDAQ CM: JAGX 20 SolGold PLC LSE & TSX: SOLG / PINK: SLGGF 26 Theta Gold Mines Limited ASX: TGM / OTCQB: TGMGF 32 Lake Resources N.L. ASX: LKE / PINK: LLKKF

34 Phoenix Copper Limited AIM: PXC / OTCQX: PGMLF

60 AmeraMex International, Inc. OTCQB: AMMX

35 Westwater Resources, Inc. NASDAQ CM: WWR

61 Clear Cannabis, Inc. PRIVATE COMPANY

36 Graphite One, Inc. TSX-V: GPH / OTCQB: GPHOF

63 Helix BioPharma Corp.

TSX & FSE: HBP

38 First Cobalt Corp.

TSX-V: FCC / OTCQX: FTSSF

78 Kuuhubb Inc. TSX-V: KUU / PINK: BCDMF

48 CBD Unlimited, Inc. PINK: EDXC

80 KneoMedia Limited ASX: KNM / OTCQB: KNEOF

50 Newrange Gold Corp.

TSX-V: NRG / OTCQB: NRGOF

96 First Vanadium Corp.

TSX-V: FVAN / OTCQX: FVANF

51 Westgold Resources Limited ASX: WGX

Critical Materials Corner 42

The Critical Materials Age

By Jon Hykawy, PhD, MBA

Accounting Corner 68

Family Office Corner 58

Family Offices are Creating Value in MicroCaps

By Karl Douglas

Resources Corner 70

Market Maker Corner 62

What is the Difference between a Specialist and a Market Maker?

By Eric Flesche

www.stocknewsnow.com

Judged By the Company You Keep

By Corey Fischer, CPA Mining Industry 2019-Q&A with Rick Rule

By Robert Kraft, MBA

Data Corner 72

What’s Your Privacy Worth?

By Chris Miglino, CEO, SRAX

Gaming Corner 76

Coloring Apps and Match-3 Games; Taking Mobile Apps to New Levels

By Ralph Garcea, P. Eng, MBA

Asia Corner 92 Hong Kong’s Summer of Discontent Overshadows Growth Stocks

By Leslie Richardson

MicroCap Review Magazine

7

nasdaQ cm: BHTg

P R O F I L E D C O M PA N Y

BioHiTech global, inc.

Providing cost-effective technology solutions that reduce the environmental impact of the waste management industry

Municipal waste being processed at BioHiTech’s fully enclosed HEBioT facility

a gREEn TEcHnology sERvicEs company, FoundEd

By EnviRonmEnTal sERvicEs indusTRy EXpERTs, THaT is on a mission To cHangE THE way wE THink aBouT managing wasTE.

Frank E. Celli, CEO

8

MicroCap Review Magazine

For decades now, the United States has dealt with its trash problems in two simple ways; bury it in the ground or ship it to another country. Yet, the simple way is becoming a lot more complicated.

As US Landfill capacity declines, more municipalities and businesses are demanding sustainable waste management solutions that reduce landfill usage and associated greenhouse gas emissions. Additionally,

countries like China, India, and Malaysia are banning the importation of our plastics, paper, and other recyclables. These factors are creating an environmental crisis that is resulting in rapidly escalating US disposal costs. In other words, the status quo is now unsustainable.

Finding solutions to these problems has proven to be just as complex. Shipping recyclables overseas is becoming increasingly difficult and has been linked to the plastic pollution crises in our oceans. Composting facilities and costly alternative food waste diversion projects have also been ineffective and in some cases, have even made things worse1. BioHiTech Global is a New Yorkbased technology company led by environmental service industry experts, taking a

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different approach to solving these problems. BioHiTech has focused on deploying cost-effective, sustainable technology solutions that can be easily integrated with traditional disposal methods. The Company’s CEO, Frank E. Celli, who has spent over a quarter of a century in this industry, thinks this practical approach to waste disposal will lower costs and help save the environment.

“Our Company is deploying two unique proprietary technologies; one that eliminates food waste at the point of generation and another that processes mixed municipal waste, including non-recyclable plastics, into an EPA recognized renewable fuel,” said Celli. “When used in tandem, these technologies can reduce landfill usage by as much as 90% while potentially lowering the disposal costs for both businesses and traditional waste service providers.”

The market size for BioHiTech’s solutions is significant. The Company estimates the annual revenue potential of its target market is more than $2.5 billion, and that is assuming a very modest percentage of the overall addressable market.

So far, BioHiTech appears to be on the right track. Revenues are increasing with the Company expecting more rapid revenue growth in the years to come. Given the tailwind created by the drive to reduce the overall environmental impact of waste disposal, BioHiTech is poised to capitalize as the technology leader in the sustainable management of this country’s waste.

HEBioT™ Resource Recovery Facilities: Reduces landfill usage while processing municipal solid waste and non-recyclable plastics into renewable fuel.

When companies like Amazon ushered in a new way to shop online and deliver everything right to your door, the volume of discarded packaging significantly increased the amount of curbside trash. According to a report from BuzzFeed News, industry

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HEBioT plant in Martinsburg, WV

leader Waste Management has seen a 20 percent increase in the amount of cardboard discarded over the last decade2, largely attributable to online shopping services.

Additionally, the mounting problems resulting from China’s recycled materials ban has led to a growing number of municipalities that are reducing or suspending their recycling programs3. That means a great deal more than just household trash ultimately ends up in landfills.

BioHiTech’s HEBioT™ Resource Recovery Facilities are poised to reverse that trend.

This patented technology processes municipal solid waste, including non-recyclable plastics, into an EPA recognized renewable fuel and can deliver an 80% reduction in landfill usage. The renewable fuel can be used as a cleaner-burning alternative to coal.

The facilities are fully enclosed, ensuring that the outside environment is not exposed to any waste, harmful gases, or foul odors.

Equally as important, deploying this technology will result in no additional cost to states, municipalities or their residents.

BioHiTech recently opened its flagship facility in Martinsburg, West Virginia. This 56,000 square foot facility is capable of processing up to 110,000 tons of municipal solid waste each year. At full capacity, the Martinsburg facility will achieve an annual savings of over 2.3 million cubic feet of landfill space and eliminate the greenhouse gases associated with landfilling that waste. Additionally, all of the alternative fuel produced at the Martinsburg facility is under contract for the next ten years by a local cement manufacturer for use as a partial replacement for coal in the cement manu-

facturing process. The Company expects the Martinsburg facility will generate $7 million in annual revenue, mainly from tipping fees charged to waste haulers, with over 40% EBITDA margins. That means this facility makes dollars and cents as well as environmental sense.

BioHiTech currently controls the exclusive development rights to the HEBioT™ technology in 11 states in the Northeast US as well as the District of Columbia. The Company has plans to build a second facility in New York that is already in the permitting process and has several other locations in the planning stage. The Company anticipates commencing construction of its New York HEBioT™ facility in 2020. When completed, the new facility is expected to add $12 million in revenue in its first full year of operation with EBITDA margins of over 50%. BioHiTech believes it can drive future revenue growth with the addition of at least one new facility to its HEBioT™ fleet each year.

Revolution Series™ Digesters: A smart technology that eliminates food waste on-site while providing powerful supply chain data analytics.

BioHiTech Seed® digester in kitchen

BioHitech’s Revolution Series™ Digesters are robotic biological digestive systems that eliminate food waste at the point of generation. These machines can be as small and easy to install as a dishwasher and use a simple biological process that converts food waste into a liquid that is safe to discharge down an ordinary drain. This process can result

MicroCap Review Magazine

9

in a substantial reduction in costs for customers like restaurants, grocery stores, and hotel/hospitality companies by eliminating the transportation and logistics costs associated with food waste disposal. As a result, with fewer trucks on the road using less gas, the environment benefits as well. BioHiTech’s smallest unit, the Revolution Seed, is capable of processing up to 500 pounds of food waste every 24 hours. Operating that unit at full capacity 5 days a week, could save the equivalent of 5,100 gallons of gasoline each year and eliminate any greenhouse gases associated with rotting food waste in a landfill.

The software engineers at BioHiTech have taken the Revolution Series Digesters one step further. They have built a proprietary cloud-based data analytics platform that helps companies improve efficiency through real-time data. This patented process of weighing and categorizing waste turns every digester into a smart cloud-connected device that provides a unique insight into the waste stream. Businesses can use that information to make supply chain modifications to reduce waste generation and further improve bottom-line results.

Typically, BioHiTech leases its digesters and smart technology to customers creating a valuable high margin recurring revenue stream that can build each year. The Company also sells its digesters to certain domestic customers as well as in foreign markets where leasing is less common.

wHy BioHiTEcH: THE RigHT appRoacH aT THE RigHT TimE. Sometimes, the best way to achieve positive industry change is to understand how the current system works and what changes the industry will easily embrace. BioHiTech has taken this approach, and that is why its technology solutions work just as well for business and municipal customers as they do for waste management services companies.

It is also why BioHiTech’s data analytics platform is designed to provide customers with tools to see and show others the positive

BioHiTech Seed® digester in use

impact they are having on the environment by diverting their food waste from landfills.

CEO Frank E. Celli thinks that makes a big difference and is one of the things that sets BioHiTech apart from other solutions providers. “We don’t just say it, we verify it,” said Celli. “Our digesters can tell you how much food waste has been diverted and what that means in terms of landfill space and CO2 emissions. Many of our customers make a point of advertising that information to show they are making a difference. ” Mr. Celli has had success in this multibillion-dollar industry before, selling a waste management services business he started from scratch for over $200 million in 2006.

He believes the industry is now ripe for change and that BioHiTech’s cost-effective technology-driven solutions can deliver that change by leading the way to a more sustainable future for our environment.

FoRwaRd looking sTaTEmEnTs This article contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance.

Actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation those set forth as “Risk Factors” in BioHiTech’s filings with the Securities and Exchange Commission (“SEC”). BioHiTech Global, Inc. assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by securities laws. n Please visit the company’s website for more information: www.biohitech.com

1 https://www.bizjournals.com/columbus/news/2019/10/02/columbus-composter-fights-for-his-businessamid.html 2 https://www.buzzfeednews.com/article/nicolenguyen/environmental-impact-of-amazon-prime 3 https://www.environmentalleader.com/2019/05/in-depth-cities-struggle-with-curbside-recycling-aschina-ban-affects-infrastructure/ The company paid consideration to SNN or its affiliates for this article.

10

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nysE american: isdR

P R O F I L E D C O M PA N Y

issuer direct corporation Technology Company Focused on the Needs of Corporate Issuers…and Investors!

I

ssuer Direct’s vision is to be the trusted platform that brings the issuer and investor together. ovERviEw Issuer Direct® is an industry leading communications and compliance company focusing on the needs of corporate issuers.

Issuer Direct’s principal platform, Platform id™, empowers users by thoughtfully integrating the most relevant tools, technologies, and services. Thus, eliminating the complexity associated with producing and distributing financial and business communications.

The Company is headquartered in Raleigh, North Carolina. Issuer Direct® has served

over 4,000 public companies and private companies in more than 18 countries.

“The Company’s mission is to be a high quality, cost effective provider of communication and compliance workflow technologies to customers around the world”, stated Brian Balbirnie, Founder and CEO.

BEginning Issuer Direct®, founded in 1988, is a public company listed on NYSE American, Ticker: ISDR. Early in its history, the company identified an opportunity in the public company

summary

5-year GAGR

COMPANY • Founded in 2006

•

Transitioned business to higher margin, reoccurring subscriptions.

•

Platform & Technology

• 88 + Employees • NYSE American listed: ISDR • Insider ownership: 25%+

Q2 2019 CUSTOMER COUNTS • 1,440 public customers • 997 private customers • YoY customer growth 27%. Driven by private communications business.

Brian Balbirnie, CEO

12

MicroCap Review Magazine

• • • • •

+40% - 5yr. CAGR 64% of overall revenues Goal of 70% end of 2019 Higher margin business (73% Q2)

Services Business • • • •

-12% - 5yr. CAGR 36% of overall revenues Goal of 30% end of 2019 Market average margins (58% Q2)

All rights reserved © 2019 Issuer Direct Corporation

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Platform history

$14.232M $12.628M

Conference Software

Investor Network

Investor Network

$11.619M

Targeting

Targeting

ACCESSWIRE

ACCESSWIRE

ACCESSWIRE

$4.305M

ARS

ARS

ARS

$3.860M

Transfer Agent

Transfer Agent

Transfer Agent

Transfer Agent

Proxy

Proxy

Proxy

Proxy

Proxy

$1.425M

IR Websites

IR Websites

IR Websites/ Webcasting

IR Websites/ Webcasting

IR Websites/ Webcasting

Compliance

Compliance

Compliance

Compliance

Compliance

Compliance

2006-2008

2009-2010

2011-2012

2013-2015

2016-2017

2018

WE HAVE SUCCESSFULLY TRANSITIONED FROM A DECLINING ANNUAL REPORTS PRINTING BUSINESS TO A HIGH-MARGIN, GROWTH SAAS BUSINESS.

All rights reserved © 2019 Issuer Direct Corporation

space by building technologies to assist with complex regulatory filings, document conversion, and shareholder communications.

Today, the Company is focused on tirelessly working to help tell their customers story to the world.

pRoBlEm The problem that the company was looking to solve was really a solution for themselves.

As a fully-reporting public company, and as CEO, it is your fiduciary responsibility to make sure that your company is within compliance for all your communications in order to make sure you are complying with all the rules and regulations set forth by the SEC or governing body.

However, you also need to make sure you are effectively communicating with your shareholder base. Issuer Direct, being a public company themselves, realized that there wasn’t a one-stop solution for all their backend compliance needs: their necessary vendors were across the map – from transfer agent, press release company, EDGAR Filings and more. Management thought that if they are having an issue with vendor management and all these compliance tools

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being disjointed, there must be others with similar issues.

soluTion Issuer Direct Product Suite consists of two well defined ecosystems, Compliance and Communications.

Its Compliance Module includes Blueprint:

EDGAR/SEDAR Filings, Whistleblower, and ownership Reporting.

Its Communications Module, includes Newswire, Webcasting, IR systems and websites, Shareholder targeting and analytics.

Other add-on products are: Stock Transfer and annual meeting management services, Conference services including: 1-1 software, and on-site webcasting.

“We have successfully transitioned from a declining annual reports printing business to a high-margin, growth SAAS business”, added Brian Balbirnie, Founder & CEO. The Company’s flagship product , Platform id™, is a cloud-based subscription platform that manages the events of customers to distribute their messages to their constituents, investors, markets, and regulatory systems.

A catalyst for customer adoptions and shareholder interest is due to its well-rounded additions to now include: news dissemination, media outreach services, an updated webcast solution that is a cloud-based earnings webcast, webinar, training platform that delivers live and on-demand streaming of events to audiences of various sizes, as well as allows customers to create, produce, and deliver events.

The Company provides SEC document

Platform id.

Modules • Compliance module - Blueprint (EDGAR/SEDAR) - Whistleblower - Ownership Reporting • Communications module - Newswire - Webcast, earnings - IR Website - Hotline - Shareholder Targeting

Simple Flat Rate

$6 - 12K /yr.

• Add-on - Stock Transfer - AGM (Print & Proxy)

All rights reserved © 2019 Issuer Direct Corporation

MicroCap Review Magazine

13

Corporate Vision

PUBLIC COMPANIES (1440)

cuRREnT pERFoRmancE and gRowTH plans PRIVATE COMPANIES (997)

CONFERENCE ORGANIZERS (-20)

INVESTORS

! Communications

! ACCESSWIRE

! 1-1 Software

! Webcasts

! Compliance

! Newsroom

! Webcasting

! Conf. Transcripts

! Stock Transfer

! Media Targeting

! ACCESSWIRE

! Company Alerts

! AGM

! Webcasting

! Mobile Options

! Historical data

! Insight* $12 - 18K

! Trends & Insights $3 - 5K

$25 - 50K

$ TBD

All rights reserved © 2019 Issuer Direct Corporation

conversion and editing such as: XBRL tagging, stock certificates fulfillment and delivery, telecommunications, printing, press release distribution, investor outreach and engagement services, as well as proxy materials or annual reports.

The Company operates under its corporate name Issuer Direct®, in addition to its brands ACCESSWIRE and Direct Transfer.

Issuer Direct® serves: corporate issuers, private companies, banks, brokerage firms, investment banks, mutual funds and professional firms - such as investor relations and public relations firms, and accounting and legal communities.

The end of the 2019 second quarter the Company had 1440 public company customers and 997 private company customers.

summaRy and conclusion: Operating in a complex regulatory environment can be a scary place, let alone understanding what to share, when and how. Issuer Direct® is a leading platform technology company that understands this, and the life cycle of a message. Its platform subscription removes the pains, burdens, and high costs by elegantly combining the entire workflow into one flat fee – an incredibly easy solution.

It also has a business unit poised for considerable growth.

Fair disclosure for public companies many times starts with a press release, and private companies are increasingly wanting to tell their stories as well. ACCESSWIRE is a FD (Fair Disclosure) approved newswire from all major exchanges – its story telling platform and subscription business has considerable runway as it only accounts for +/-5% of the market. n Please visit the company’s website for more information: www.issuerdirect.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement.

Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

14

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P R O F I L E D C O M PA N Y

NASDAQ CM: JAGX

Jaguar Health, Inc. From the Rainforest to an FDA-approved Drug with Multiple Potential Follow-on Indications

J

aguar Health is a commercial stage pharmaceutical company focused on developing novel drugs and new modalities of providing symptomatic relief for gastrointestinal diseases on a global basis. The company’s wholly-owned subsidiary, Napo Pharmaceuticals, focuses on drug discovery and development by leveraging the knowledge of traditional healers working in the Amazon rainforest. A number of Jaguar and Napo team members have been together for more than 15 years. Dr. Steven King, Jaguar’s executive vice president of sustainable supply, ethnobotanical research, and intellectual property, and Lisa Conte, the company’s founder, president and CEO, have worked together for more than 30 years. Together, the Napo team has successfully developed crofelemer, a novel drug purified from the bark latex of the Croton lechleri tree, into Mytesi®, a natural, sustainably harvested, first-in-class drug approved by the U.S. FDA

for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS receiving antiretroviral therapy.

A PIPELINE WITHIN A PRODUCT Mytesi is in development for multiple possible follow-on indications including: cancer therapy-related diarrhea, orphan-drug indications for infants and children with congenital diarrheal disorders and short bowel syndrome, and potentially for supportive care for patients with inflammatory bowel disease, irritable bowel syndrome, and idiopathic/functional diarrhea. In addition, Jaguar’s second-generation proprietary antisecretory agent, lechlemer, is in development for providing symptomatic relief of diarrhea from cholera infection.

Jaguar, through Napo, holds extensive global rights for Mytesi. The company is seeking business development partnerships to provide non-dilutive funding for the multiple clinical opportunities, and Jaguar is currently in discussion with a number of prospective partners.

DISTINCT COMPETITIVE ADVANTAGES

Lisa Conte, CEO

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Mytesi is the only FDA-approved, first-inclass anti-diarrheal drug studied specifically in adults with HIV/AIDS in a chronic therapy setting.

On September 20, 2019, the FDA announced that it has set packaging limits for the anti-diarrheal (anti-motility) medicine loperamide (Imodium®), which is only

labelled for acute treatment, to encourage safe use. Unlike anti-motility products such as Imodium and Lomotil®, which are opioids that work by slowing movement through the GI tract and often cause constipation— Mytesi is a non-opioid, non-antibiotic drug that modulates and normalizes the functional imbalance of intestinal fluid and electrolytes in the gut and is approved for chronic use.

Mytesi is minimally absorbed and is also the first oral drug approved by the FDA under botanical guidance. This provides a barrier to entry from potential generic competition because currently there is no pathway for a generic product to be developed for crofelemer under botanical guidance.

Commercial manufacturing of Mytesi is being conducted at two FDA-approved locations (under GMP). Several additional Mytesi clinical applications are backed by Phase 2 and/or proof of concept clinical evidence from human trials. Jaguar also holds a portfolio of approximately 141 issued worldwide patents, with coverage in many cases that extends until 2031, along with approximately 24 pending patent applications worldwide.

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Cancer Therapy-Related Diarrhea (CTD): The Primary Focus of Jaguar’s Pipeline Development Efforts Targeted cancer therapy agents, such as epidermal growth factor receptor antibodies and tyrosine kinase inhibitors (TKIs), with or without concomitant cycle chemotherapy agents, may activate intestinal chloride secretory pathways, leading to increased chloride secretion into the gut lumen, which, coupled with significant loss of water, results in secretory diarrhea. A novel antidiarrheal drug like crofelemer holds promise for treating such diarrhea, and would support long-term cancer treatment adherence as well as patient comfort.

According to a publication in The American Journal of Hematology/Oncology in 20151, the incidence of diarrhea with cancer treatments has been reported to be 80%, with 20% of patients having severe diarrhea.

Ongoing InvestigatorInitiated Trial of Crofelemer at Georgetown for CTD Enrollment is ongoing for an InvestigatorInitiated Phase 2 study of crofelemer in breast cancer patients. The study, titled HALT-D: Diarrhea Prevention and Prophylaxis with Crofelemer in HER2 Positive Breast Cancer Patients Receiving Trastuzumab, Pertuzumab, and Docetaxel or Paclitaxel with or without Carboplatin, is sponsored by Georgetown University and funded by Genentech (Roche). The final study report is expected to be available in mid-2020.

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The protocol for this study called for an interim analysis for futility when the study enrollment reached 50%. Georgetown University’s Data Safety Monitoring Committee has reviewed the interim analysis and notified the Principal Investigator that the interim analysis requirement has been met and the study is allowed to enroll to completion. As of mid-November, enrollment in the study exceeded 85%, and the treatment period for each patient is 3 months.

Earlier this year Napo met with the FDA to discuss a new protocol for the company’s planned pivotal Phase 3 clinical trial in cancer subjects to evaluate the effects of crofelemer in providing symptomatic relief of diarrhea in adult patients with solid tumors receiving targeted cancer therapy with or without cycle chemotherapy. The meeting resulted in several key agreements between Napo and the FDA. These agreements included support for the conduct of a pivotal Phase 3 trial, lack of additional requirements for nonclinical toxicity studies, no additional manufacturing studies, and a waiver on any new drug interaction studies. For clarification, this pivotal trial is not dependent on the completion or result of the HALT-D trial, which is investigator, not company, initiated.

Jaguar’s planned clinical study for CTD is analogous to the successful clinical studies for Mytesi’s currently approved HIV indication, and as part of risk mitigation efforts, Jaguar intends to use the same formulation and dosing of the currently commercialized Mytesi product. Napo’s next steps are to refine and finalize the protocol for the pivotal trial with the FDA, and the company submitted a package in September 2019 to support the regulatory discussions.

Significant Top Line Results Achieved in Preclinical Study Evaluating Crofelemer for CTD As announced in August 2019, significant top line results have been achieved in a preclinical pharmacological study to evalu-

ate the effects of crofelemer on reduction of diarrhea (measured by frequency of watery stools) induced in healthy dogs following oral dosing of a therapeutic dose of a select TKI over a 28-day period. The top line results of the study showed that crofelemer demonstrated superior benefit for “responders” (p<0.05). A “responder” was defined as any dog having <7 watery stools per week for at least two out of the four weeks of the study.

The results of this study (funded by a thirdparty manufacturer of an FDA-approved TKI) provide additional scientific rationale and support for the use of crofelemer for symptomatic relief of noninfectious diarrhea in human patients receiving TKI-and/ or-other targeted cancer therapy-containing regimens in clinical investigations.

Jaguar’s Legacy Animal Health Business Supports Focus on Human Health Benefits While Jaguar’s commercial and development efforts have evolved to focus primarily on Mytesi and human pipeline indications since its merger with Napo, the company is continuing limited initiatives related to Canalevia™, its drug product candidate for treatment of chemotherapy-induced diarrhea (CID) in dogs. Jaguar believes the experience, such as the aforementioned TKI study in dogs which achieved results similar to the ADVENT trial, the human pivotal trial resulting in regulatory approval of crofelemer for its current approved indication in HIV/AIDS patients, may be predictive of the effectiveness of crofelemer in human patients suffering from CTD. Upon receipt of conditional approval for CID from the FDA/CVM, Jaguar expects the product to be commercially available for this indication in dogs in the first half of 2020.

Pursuit of Pediatric Orphan-drug Indications The company plans to evaluate a liquid formulation of crofelemer for the possi-

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ble orphan-drug indications of diarrhea in infants and children with congenital diarrheal disorders (CDD) and/or with short bowel syndrome (SBS). The incidence of CDD and SBS is much more prevalent in regions where consanguineous marriages are part of the culture. Napo has accepted a request for an Investigator-Initiated trial of crofelemer at Sheikh Khalifa Medical City in Abu Dhabi for CDD in children, and Jaguar is seeking potential business development partners focused on rare diseases to support efforts to pursue these possible indications.

Possible Cholera-Related Priority Review Voucher Opportunity Cholera is an acute diarrheal illness, with an estimated 3-5 million cases and over 100,000 cholera deaths occurring each year globally.

Jaguar’s drug product candidate lechlemer, which has the same mechanism of action as crofelemer and is significantly less costly to produce, may support efforts to receive a priority review voucher (PRV) from the FDA for a cholera indication. PRVs, which are transferable, are granted to drug developers as an incentive to develop treatments for neglected diseases and rare pediatric diseases. In recent transactions by other companies, PRVs have sold for $67 million to $350 million.

ten public offering of units for gross proceeds of $16.56 million. This included the full exercise of the underwriter’s over-allotment option to purchase additional shares and warrants, prior to deducting underwriting discounts and commissions, and offering expenses payable by Jaguar. Several long-term investors dedicated to expanding access to Mytesi participated in the financing. The company has no anti-dilution or reset provisions in any of the securities on its balance sheet.

Important Safety Information Mytesi is not approved to treat infectious diarrhea (diarrhea caused by bacteria, a virus, or a parasite). Before starting you on Mytesi, your healthcare provider will first be sure that you do not have infectious diarrhea. Otherwise, there is a risk you would not receive the right medicine and your infection could get worse. In clinical studies, the most common side effects that occurred more often than with placebo were upper respiratory tract (sinus, nose, and throat) infection (5.7%), bronchitis (3.9%), cough (3.5%), flatulence (3.1%), and increased bilirubin (3.1%).

Multiple Opportunities for Growth Jaguar and Napo are committed to their mission of expanding access to crofelemer across disease states to patients globally.

“The depth of our pipeline provides potential supportive care therapy for large patient populations across multiple disease indications, and we believe this pipeline will fuel long-term value creation for investors and provide funding opportunities for partner collaborations around the world,” Conte commented.

In July 2019, Jaguar closed on an underwrit-

See full Prescribing Information at Mytesi. com.

Jaguar Health, Inc. authored this article and paid a fee to SNN to publish and distribute the article. n

Forward-Looking Statements Certain statements in this press release constitute “forward-looking statements.” These include statements regarding the development of possible Mytesi follow-on indications, the belief that crofelemer may hold promise for treating secretory diarrhea, and therefore also support long-term cancer treatment adherence as well as patient comfort, in cancer patients, the expectation that the final report for the HALT-D study will be available in Q1 2020, Jaguar’s plans to use the same formulation and dosing as the current commercialized Mytesi product for the proposed CTD indication, Napo’s plans to refine and finalize the agreement for the single pivotal trial for CTD with the FDA, the belief that the results of the dog TKI study provide additional scientific rationale and support for use of crofelemer in providing symptomatic relief of noninfectious diarrhea in human patients receiving TKI-and/or-other targeted cancer therapy-containing regimens in future human clinical investigations, the expectation that Canalevia, if conditionally approved for the indication of CID in dogs, will be commercially available for this indication in dogs in the first half of 2020, plans to evaluate a liquid formulation of crofelemer for the possible indications of diarrhea in infants and children with CDD and/or SBS, the belief that lechlemer may support efforts to receive a PRV for a cholera indication, and the expectation that the company’s pipeline will fuel long-term value creation for investors and provide funding opportunities for partner collaborations around the world. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “aim,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this article are only predictions. Jaguar has based these forward-looking statements largely on its current expectations and projections about future events.

These forward-looking statements speak only as of the date of this article and are subject to a number of risks, uncertainties and assumptions, some of which cannot be predicted or quantified and some of which are beyond Jaguar’s control. Some of the factors that could affect our actual results are included in the periodic reports on Form 10-K and Form 10-Q that we file with the Securities and Exchange Commission. Except as required by applicable law, Jaguar does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

Ustaris F, Saura C, Di Palma J et al. Am J Hemat/ Oncol, 11:13-22, 2015 1

Croton lechleri tree in the Amazon rainforest

Please visit the company’s website for more information: www.jaguar.health The company paid consideration to SNN or its affiliates for this article.

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P R O F I L E D C O M PA N Y

lsE & TsX: solg / pink: slggF

solgold plc An Emerging Copper Gold Major completed over 250,000m of drilling, spent US$180 million and established Alpala as a Tier 1 copper-gold project with the announcement of both a Resource Estimate

solgold and AdminPreliminary Economic Assessment 10/8/19 9:50 PM

Deleted: [SolGold logo] AN EMERGING COPPER GOLD MAJOR (PEA). In terms of size, there are only two LSE & TSX: SOLG

SolGold is a leading exploration company other copper discoveries globally that are

SOLGOLD focussed on the discovery and definition comparable to the Alpala deposit, which

SolGold is a leading exploration company focussed on the discovery and definition of world-class copper and gold deposits in Ecuador. SolGold isn’t a one project company – it is at the forefront of of world-class copper and gold deposits in continues to grow with every drill hole. its overall strategy to become to Ecuador, what BHP was to Australia. With its first mover advantage, Microsoft Office …, 10/1/19 1:35 PM SolGold has recognised the province scale opportunity presented in the unexplored section of the Ecuador. SolGold isn’t a one project comThe progress SolGold has made, and the Deleted: .

Andean Copper Belt and is working toward becoming an Ecuadorian copper gold major.

pany – it is at the forefront of its overall strat- magnitude of the Alpala project has been ALPALA

egy to become to Ecuador, what BHP was endorsed by major mining companies – with SolGold owns 85% of the Alpala project through the local subsidiary Exploraciones Novomining S.A. Since 2013, SolGold has completed over 250,000m of drilling, spent US$180 million and established toa Tier Australia.

With first mover Alpala as 1 copper-gold project with its the announcement of both advantage, a Resource Estimate and BHP and Newcrest Mining currently holdPreliminary Economic Assessment (PEA). In terms of size, there are only two other copper discoveries globally that are comparable to the Alpala deposit, which continues to grow with every SolGold has recognised the province scale ing major shareholdings in the Company drill hole.

opportunity inthe Alpala the project unexplored The progress SolGold has made, presented and the magnitude of has been endorsed by major mining companies – with BHP and Newcrest Mining currently holding major shareholdings in the Company section of the Andean Copper Belt and is Significant logistical advantages deliver

[INCLUDE IMAGES OF BHP & NEWCREST LOGOS] working toward becoming an Ecuadorian CAPEX savings that differentiate Alpala

Significant logistical advantages deliver CAPEX savings that differentiate Alpala as a as a Tier 1 project copper gold major.

Tier 1 project [IN A STAND OUT BOX]

3 hour drive from Quito 180km from a deep water port at Esmeraldas, 100km from port at San Lorenzo • 3 hour drive from Quito international Hydro Power network 30km: 5–8c/kwh Local work force alpala • 180km from a deep water port at Excellent sealed, multi lane roads Fresh water adjacent Esmeraldas, 100km from port at San SolGold owns 85% of the Alpala project Lorenzo through the local subsidiary Exploraciones • international Hydro Power network Novomining S.A. Since 2013, SolGold has 30km: 5–8c/kwh • Local work force • Excellent sealed, multi lane roads • Fresh water adjacent • Elevation 600 – 1,800m

the project through to feasibility stage.

The PEA established the following key aspects: • Net Present Value estimates range from US$4.1Bn to US$4.5Bn (Real, post-tax, @ 8% discount rate, US$3.3/lb copper price, US$1,300/oz gold price and US$16/oz silver price) depending on production rate scenario.

• Internal Rate of Return (“IRR”) estimates range from 24.8% to 26.5% (Real, posttax, US$3.3/lb copper price, US$1,300/ oz gold price and US$16/oz silver price) depending on production rate scenario.

• Pre-production Capex estimated at approx. US$2.4B to US$2.8B, and total Capex including life of mine sustaining Capex of US$10.1B to US$10.5B depending on production rate scenario.

• Payback Period on initial start-up capital - Range from 3.5 to 3.8 years after commencement of production depending on production rate scenario.

• Preferred Mining Method - Underground low-cost mass mining using Block Cave methods applied over several caves designed on two vertically extensive Lifts.

pan-EcuadoRian sTRaTEgy Advancing toward development The resource at the Alpala deposit boasts a SolGold is the largest tenement holder in Elevation 600 – 1,800m high grade core, which will target early cash- Ecuador.

Advancing toward development flow and an accelerated payback of initial SolGold used its successful and cost effiThe resource at the Alpala deposit boasts a high grade core, which will target early cashflow and an capital.

SolGold is currently investigating cient established at and Alpala, to accelerated payback of initial capital. SolGold is currently blueprint investigating development financing options to bring the project through to feasibility stage. development and financing options to bring explore for additional world class copper

Nick Mather, CEO

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The PEA established the following key aspects: www.stocknewsnow.com • Net Present Value estimates range from US$4.1Bn to US$4.5Bn (Real, post-tax, @ 8% discount rate, US$3.3/lb copper price, US$1,300/oz gold price and US$16/oz silver price)

and gold projects across Ecuador. SolGold first entered Ecuador in early 2013, and has created and developed a successful exploration blueprint for in-country geology, social initiatives and environmental programmes which are being replicated across the 13 other priority projects that have been identified.

SolGold formed four wholly owned subsidiaries that are actively exploring the country. These subsidiaries are focussed on the thirteen high priority gold and copper resource targets, several of which the Company believes have the potential, to be developed in close succession or even on a more accelerated basis from Alpala. Each subsidiary has its own technical and community relations teams.

TOP REPRESENTED SHAREHOLDERS Newcrest International Pty Ltd

14.79%

DGR Global Ltd

11.06%

BHP Billiton Holdings Limited

11.14%

Cornerstone Capital Resources

9.22%

Tenstar Trading Limited

6.43%

Blackrock

6.07%

Samuel Holdings Group (Mather)

4.87%

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[LOGO’S FOR EACH SUBSIDIARY – Carnegie Ridge, Cruz del Sol, Green Rock, Valle Rico] [MAP OF PRIORITY PROJECTS] [INFOGRAPHIC WITH LIST OF ALL 13 PRIORITY PROJECT NAMES: A HIGHLY enable the delivery of ore grade intersections Blanca EXPERIENCED AND Nieves ACCOMPLISHED TEAM from nearly every drill hole at Alpala.

Cisne Loja Rio Amarillo SolGold employs a staff of over 650 , 98% 2019 AND BEYOND Salinas Chillanes of which are Ecuadorean. We expect this Sharug numberCisne Victoria to grow significantly as the opera- SolGold currently has 12 active rigs on tions at Alpala, and across the country Alpala, and plans to move three of these to Timbara other high priority regional projects. The expand.Porvenir

One of the fundamental elements to SolGold’s continued success is its highly experienced board and management team that bring together a wealth of knowledge and skills. The management team, in conjunction with SolGold’s 86 geologists on the ground, are 11% female. SolGold has engaged an increasingly skilled refined and experienced team of geoscientists using state of the art geophysical and geochemical modelling applied to an extensive data base to

remaining rigs at Alpala will focus on converting Inferred to Indicated, and contribute to the release of MRE#3, which is expected to be announced by year end, 2019.

SOLGOLD’S SUSTAINABLE APPROACH SolGold’s 100-year vision for the Ecuadorean mining industry has been built on strong foundations, with sustainability and respon-

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sible mining at the heart of all activities.

Since first stepping foot into Ecuador, SolGold has created and nurtured relationships with local communities and people in the surrounding communities to ensure the Company is operating with complete transparency. Each conversation, job opportunity and community initiative has highlighted the symbiotic relationship SolGold aims to institutionalise both locally and nationally.

From responsible water management, to strong recycling programmes, to the million trees initiative, SolGold’s environmental programme for Cascabel is at the highest of standards and will be replicated, like the exploration blueprint, across all regional projects.

Education is also a key aspect to SolGold’s sustainability programme and has recently built an on-site lecture room to facilitate the wide variety of classes SolGold offers school children, university students, and community members.

It is clear, through the continuous addition of new social, educational, and environmental initiatives, SolGold places upmost importance on ensuring its impact is positive, and supported by all communities.

SolGold is a unique investment opportunity within the copper and gold sector.

In addition to its Alpala project, SolGold is strategically exploring a pipeline of potential Tier 1 projects which provides investors an opportunity to see multiple re-ratings in an emerging mining jurisdiction, supported by a focussed government. The strong outlook for copper with the added short-term benefits of gold rich deposits will see SolGold develop its ultimate vision to become a copper gold major in Ecuador. n Please visit the company’s website for more information: www.solgold.com.au

SOLGOLD’S SUSTAINABLE APPROACH

SolGold’s 100-year vision for the Ecuadorean mining industry has been built on strong foundations, with sustainability and responsible mining at the heart of all activities. Since first stepping foot into Ecuador, SolGold has created and nurtured relationships with local communities and people in the surrounding communities to ensure the Company is operating with complete transparency.

Each conversation, job opportunity and community initiative has highlighted the symbiotic relationship SolGold aims to institutionalise both locally and nationally.

From responsible water management, to strong recycling programmes, to the million trees initiative, SolGold’s environmental programme for Cascabel is at the highest of standards and will be replicated, like the exploration blueprint, across all regional projects.

Education is also a key aspect to SolGold’s sustainability programme and has recently built an on-site lecture room to facilitate the wide variety of classes SolGold offers school children, university students, and community members.

It is clear, through the continuous addition of new social, educational, and environmental initiatives, SolGold places upmost importance on ensuring its impact is positive, and supported by all

communities.

This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider

various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking state ment. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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mining.tsx.com Source: TSX/TSXV Market Intelligence Group and S&P Capital IQ. As at December 31, 2018.

MicroCap Review Magazine 23 www.stocknewsnow.com ©2019 TSX Inc. All rights reserved. The information in this ad is provided for informational purposes only. Do not sell, reproduce or modify this document without TSX Inc.’s prior written consent.

Listing on Toronto Stock Exchange or TSX Venture Exchange does not guarantee the future performance of a security or an issuer. TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, TSX Venture Exchange, and TSXV are trademarks of TSX Inc.

F E AT U R E D A R T I C L E

The Information and Reliability Void Filling the Gap for Investors

I

don’t think anyone would disagree when I say that there are more than enough information resources available for investors. In fact, there are some really good ones. I personally use many of them: my own website, StockNewsNow.com, LDMicro. com, MicroCapClub.com, SEC.gov and SEDAR for filings. Yet, why do new investors still feel there is an information void?

I speak with investors on a daily basis and I’m always asking what resources they use, where they go for information. I’ve found that investors use on average 5-10 resources to get the information they need for their due diligence process. For the most part these 5-10 resources are online, and most of these online destinations requires you to have an account with them to have access to their platform. Is this a new phenomenon? No. Although at the height of Yahoo Finance’s popularity, which may have been everyone’s first destination, most information seeking

n BY ROBERT KRAF T, MBA

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investors would go to another source for information, analysis and insights. These are observations I’ve made from seasoned investors, who have their routines, however inefficient, have their processes in place.

Despite that fact, those seasoned investors are still interested in looking for new ways to improve their due diligence process.

When I speak to new investors about investing and the resources they use, it’s a completely different story. I recently finished getting my MBA at Pepperdine University, and most of my peers, even those who invest and/or interested in the stock market, are so overwhelmed by the amount of resources available that its debilitating; not only finding a resource that seems like it’ll accomplish the task they need, then the question of reliability comes into play. How do I know that all the information on this website is accurate? How do I know that this analyst, blogger, or fund manager are providing an objective perspective on a particular stock or industry?

Based on my conversations with wellknown seasoned and new investors, my thesis is that there is so much information and that you have to go to so many different places to get the information that you need, this process creates the perception that there is an information void - when in fact, there isn’t.

There’s a consolidation and reliability void.

There are countless blogs, podcasts, research reports, informational websites - this can be overwhelming not just for new investors, but those who have been doing this for a long time. There’s no substitute for putting in the time and effort to read everything you can on a potential investment idea, and that could require scouring the internet to consume every last bit of information that can help.

And yet, in order to save time and to make the process more efficient, I think all would agree that if there was a reliable source that had all the data, insights, information they needed for their due diligence, this would make investors’ lives much, much easier.

The biggest issue that both new and seasoned investors have expressed to me in our conversations is that discovery and reliability is very difficult – finding new ideas to research is hard. I’m a subscriber on a very well-known platform for investors, and one of the topics is, “List of Useful Websites to Gather Information”, and I find this thread fascinating. All the websites listed on there are very, very useful – I use most of them.

The part that confounds me is why isn’t there a place that takes the most useful and reliable aspects (or what most people find to be most useful) all consolidated in one place? Another thought I had is: can a website like that exist which is user-friendly and not feel cluttered or overwhelming? The answer lies in trying to distill down to an age-old question, what information do you need as an investor that will help you make the best investment decision possible? My team and I are hard at work in gathering this information with the hope of creating a platform that will help investors of all levels by providing reliable data and information for discovering potential new investment ideas, insights from well-known financial influencers, and to allow you to research ideas all from one resource. Stay tuned… n Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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P R O F I L E D C O M PA N Y

Theta gold mines limited A 6 Million Ounce Gold Resource with Near Term Production Profile

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Bill Guy, Chairman

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heta Gold Mines Limited (ASX: TGM, OTCQB: TGMGF) is a sustainable gold miner in the making.

Theta boosts a hefty 6 million-ounce JORC Resource in a proven and prolific gold region of South Africa, controlling 9 Mining Rights spread across 62,000 hectares. The company has a well-defined strategy in place to produce 100,000 ounces of gold per annum through open pit mining of multiple mines and ramp up towards 150,000 ounces with underground ore supply.

With a primary listing on the Australian Securities Exchange and OTCQB status in the US, Theta controls 74% of the East Transvaal Goldfield, where South Africa’s gold mining industry began around 130 years ago. The company is focused on reawakening a giant goldfield, situated in South Africa’s East, by bringing modern, open pit mining to a large and historically recognized underground mining region.

The Transvaal Goldfield sits 230 miles Northeast of Johannesburg. The major city is only a four-hour drive by highway and provides a solid base for Theta’s operations.

The Transvaal Gold System is located on the eastern side of the Bushveld Complex, which is the largest igneous intrusion on earth. The prolific gold field established around the system is highly prolific, having produced over 6.7 million ounces of gold since 1880.

Theta holds a large landholding of permitted tenements through its subsidiary company, Transvaal Gold Mining Estate Limited (TGME). The TGME project portfolio covers more than 43 historical mines. In addition to its large mineralized estimated resource, the area has a number of underexplored old mines and shallow exploration targets containing gold-bearing ore left over from nearly a century of mining. Theta believes significantly more gold can be found in its current tenement suite.

Unique from other gold explorers, Theta has more the 130 years of detailed mining data to guild its resource/reserve drilling programs. Over the last 24 months, Theta’s per Indicated Resource ounce discovery cost is approximately USD $12 per ounce; our drilling hit rate exceeds 95%, which puts Theta at the very bottom quartile of discov-

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ery cost when compared to our peers.

Historically, the region was so rich in resources that early miners would only focus on easy targets. When mining became difficult, miners left the region to pursue other areas. Theta now stands to benefit from this, as modern mining techniques and highpowered machinery, coupled with resource modelling and modern processing technology allow for the exploration and development of old prospects and mines.

Theta also has the benefit of owning an existing carbon in leach (“CIL”) treatment plant. The company will refurbish and add new components, so it can rapidly scale up production across the whole project.

While Theta’s past focus was on underground mining, the company has delineated a strategy to bolster high grade and open cut resources, inevitably unlocking value for investors.

Over the last three years, management has more than doubled the Company’s mineral resource (JORC Resources, which compares to Canada’s NI43-101). Through focused and highly systematic exploration, Theta boost a JORC compliant Mineral Resource Estimate

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(MRE) of 6 million ounces gold (44.8Mt @ 4.18 g/t Au). This includes an open cut resource of 1.3 million ounces (13.08Mt @ 3.12 g/t AU) and a 4.5-million-ounce underground resource 26.3Mt @ 5.4 g/t Au).

These favorable mineral resource estimates have led Theta to release a feasibility study for the Theta Hill Starter Pits project.

The study was for initially recovering 200,000-ounce starter project, highlights a low capex project (US $34m) with strong cashflow, and an average all-in-sustaining cost of US $764 per gold ounce. The company envisages a nine-month construction period and a plant upgrade to 500,000 tones per annum, allowing for a cumulative EBITDA over Life-of-mine of US $99.6m and a 1.2year payback period, all based on USD $1257 per ounce gold price assumption.

Project construction will be underpinned by a highly experienced and technically savvy Board and management team, all of which have considerable experience in South Africa and the mining sector more broadly.

Theta’s Chairman, Mr. Bill Guy has over 25 years’ experience in resource exploration and development globally. Inclusive of capi-

tal raisings, project acquisition (European Zinc) project development (Cockatoo Island Fe), project discovery (Mt Ida (Fe), and large scale JV (Newcrest JV (Au)), in both the corporate and technical roles. Most notably, Mr. Guy was Chief Exploration Manager of ASXlisted, African focused manganese developer Jupiter Mines Limited (ASX: JMS). At Jupiter Mines, he developed exploration protocols that enabled projects to progress from grassroots to a viable resource.

Managing Director, Mr. Rob Thompson, a highly experienced mining engineer, has held multiple senior roles over a 35-year career.

During this time, he has been instrumental in taking eight exploration projects through to mining operations including the Finder’s Wetar 28,000 ton per annum copper cathode Rob Thompson, project in Indonesia, Managing Kingsgate’s 125,000+ Director ounce per annum, Chatree open-cut gold mine in Thailand, and Climax’s Sepon 100,000+ ounce per annum in Laos.

Finn Behnken, Non-executive Director, is a mining engineer with considerable South African mining operation experience. He was previously the CEO of Tshipi e Ntle Manganese Mining (Pty) Limited, during the construction and initial product phase of the major Tshipi Borwa Manganese Mine.

Tshipi is currently 49% owned by Jupiter Mines. Prior to his CEO role, Finn was an investment banker with South African based Nedbank. He has also served as a Director to a range of listed mining companies, including AIM listed Gemfield PLC. Mr Behnken is a resident of South Africa.

Non-executive Director, Mr.Bill Richie Yang is an experienced company Director with a strong resources background. Mr.Yang has nearly two decades of corporate finance experience and has assisted a range of public and private companies with business development, capital raisings and corporate structures.

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2.5Mw ball mill purchased from ex-Glencore operation

Theta’s Board is also well supported by an experienced senior management team. Mr George Jenkins is a qualified extraction metallurgist with 30 years industry experience in South Africa and Australia. He has held a range of executive, operational, and business development roles with companies such as JCI, Vale Australia, and Anglo American Coal. He has considerable experience in delivering construction, commissioning, and recommissioning of several plants. George is focused on the delivery of Theta’s project from concept through to production.

RSA Director of Social Corporate Services Terrence Mokale is an admitted attorney of the High Court of South Africa and has been working in the mining environment as a Social Facilitation Consultant for a number of years. His clients include Glencore and Gold One, for which he engaged community stakeholders and representatives to work constructively with mining operators to create the best outcome for all parties.

A strong, African focused Board and management leaves Theta well placed to capitalize on the opportunities available in South Africa’s established mining jurisdiction. The country has produced more gold than anywhere else in the world, at over two billion cumulative ounces. Recently the Fraser Institute ranked South Africa No.43 out of 83 global mining jurisdictions.

The country has a supportive government, with a new pro-mining President elected as the head of the African National Congress.

Cyril Ramaphosa is a former businessman, a former miner and ex labor union leader and

is aiming to attract $100 billion in foreign direct investment by 2023.

Buoyed by bullish commodity tailwinds, a credible and experienced Board and management team and a supportive government, Theta will implement a stringent work program that will unlock value for investors and ensure the company delivers on its production profile starting from 50,000 ounces, and then scaling up to 150,000 ounces per annum.

The Board and management team will continue to dissect and digitize the company’s geological database, compiled over decades; including data from over 100,000 underground channel samples and circa 900 drill holes to further assist in the design of each drill program.

The next phase of exploration will include a number of open pit targets and converting the 1.3 million-ounce resources to an Indicated (JORC) status. Theta will also further drill test a number of targets in its tenement suite.

Theta recently completed an internal engineering study to maximize the use of its existing permitted plant footprint. The new metallurgical plant layout position creates the flexibility to materially increase the company’s gold production potential and will be imperative to drive Theta’s production targets.

To date, only 17% of open-cut resources have been included in reserves due to the plan to expedite production. Theta has outlined a number of targets to drill, which will dramatically increase reserves and underpin even more favorable project economics. Theta recently announced the purchase of a ball mill (capacity 0.5Mtpa to 1Mtpa) from an

ex-Glencore operation, which demonstrates management’s strategic planning and execution capabilities. This ball mill can process up to 1Mtpa which doubles the earlier feasibility study production rate, further reflecting management’s commitment and confidence towards ramping up the operational scale.

The Company is sufficiently funded to progress projects with A$8 million in cash, and receivables available to unlock further value.

Theta recently secured an agreement through a group of specialist global resource investors for the placement of 53.3m shares at $0.15 per share (trade-restriction until December 2020).

In summary, Theta has the ability to transition from an explorer to project developer, to a gold producer in the near term. The company has outlined a low capital expenditure starter project, defraying financial risk and requiring less funding. It also delivered a feasibility study characterized by low operating expenditure and a rising gold price to boost profit potential. ■ Please visit the company’s website for more information: www.thetagoldmines.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement.

Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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Raising the Bar in precious metals investing™ We believe that the most successful natural resources investors are those who have access to objective guidance.

Meet Mishka vom Dorp. He is one of our resource specialists committed to helping you create a personalized resource portfolio as an integral part of your overall investment plan.

Mishka vom Dorp Investment Executive Mishka vom Dorp is committed to analyzing all aspects of the junior resources market to identify and target spaces that have been overlooked by the majority of investors. He conducts his own unique form of due diligence paying close attention to entry and exit strategies, overly discounted political risk and the cyclical nature of junior natural resources markets. Mishka holds an MBA in finance and a BSB in International Business from Umeå School of Business and Economics, Sweden.

Mishka offers clients full-service investment brokerage services including: • Natural Resources Research • Advice • Monitoring Corporate Developments • Private Placements You may contact Mr. vom Dorp at 760.444.5263, or via email at MvomDorp@sprottglobal.com Sprott Global Resource Investments is a U.S. broker-dealer focused on the natural resources sectors including precious metals, base metals, oil & gas, agriculture, water and alternative energy.

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This content is intended solely for the use of Sprott Global Resource Investments Ltd. for use with investors and interested parties. The intended use of this material is for information purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The investments discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a possible loss of the principal amount invested. Generally, natural resources investments are more volatile on a daily basis and have higher headline risk than other sectors as they tend to be more sensitive to economic data, political and regulatory events as well as underlying commodity prices. Past performance is no guarantee of future returns.

Sprott Global Resource Investments Ltd., affiliates, family, friends, employees, associates, and others may hold positions in the securities it recommends to clients, and may sell theMicroCap same at anyReview time. Member FINRA/SIPC29 Magazine Sprott Global Resource Investments Ltd. | 1910 Palomar Point Way, Suite 200 | Carlsbad, CA 92008

F E AT U R E D A R T I C L E

The Key Raw Materials Needed for the Rise of the Lithium Ion Battery Megafactories

T

he world is undergoing a global energy storage revolution in which the advent of electric vehicles (EVs) and the emergence of energy storage has sparked a wave of lithium ion battery megafactory construction.

A megafactory is a battery factory capable of producing 1 gigawatt hours (GWh) or more of battery cells per year. Right now, each GWh equates to approximately 15,00016,000 electric vehicles (EV) with an average battery pack size. The number of megafactories in production and planned for production continues to increase at a growing rate.

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Without battery megafactories, the EV industry would not be capable of challenging and displacing the auto industry’s internal combustion engine.

Since Tesla announced the first Gigafactory in 2014, Benchmark Mineral Intelligence has been tracking the global development of battery megafactories. At that time, Elson Musk said of his Nevada battery factory plans: “it’s not just going to be the biggest lithium ion battery factory in the world, but it will actually be bigger than the sum of all lithium ion factories in the world.”

This sparked a worldwide battery arms race.

Almost five years ago, in Q1 2015, there were only three megafactories planned for development. As at the end of August 2019 there were 99 plants in the pipeline across four continents. If all of these megafactories are built, by 2028 they would have a total capacity of over 2,000 gigawatt hours.

Batteries are becoming a fundamental aspect of the 21st century’s economy. But batteries have complex and global supply chains, with a number of raw materials required. The key raw materials being lithium, cobalt, graphite and nickel.

Chart 1 below shows the theoretical raw material demand from megafactories in the pipeline at 2018, 2023, and 2028. It assumes a 100% utilisation rate where each and every plant is constructed and operated at full planned capacity. In reality, these factories won’t all produce at 100% of their capacity

but it illustrates growing of battery production globally.

A more likely scenario is that only 70% of battery megafactories go into production, producing at 70% of their capacity by 2028.

Either way, the current plans for battery production will not yield enough batteries for EVs, energy storage, and mobile technology. As a result, we expect the global battery arms race will continue to intensify and so will the pursuit of the raw materials needed to fuel it.

BaTTERy Raw maTERials Naturally extracted through mineral-rich brine resources or traditional, hard rock mining operations- lithium is the most wellknown of battery raw materials.

Chile, Argentina, and China are currently the leading sources of lithium brine whereas the world’s major source of hard rock lithium production is in Australia.

In 2018, Australia was responsible for 46% of lithium raw material supply, Chile produced 28%, China and Argentina produced 13% and 11% respectively. This is the first stage of lithium production.

However, the next step in the lithium supply chain, where the raw material is processed into battery grade material - China takes a prominent role as it produces 51% of lithium chemical supply, with Chile providing 29% and Argentina 11%.

For the past 5 years, China’s leading lith-

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ium companies have locked up the world’s best lithium assets, struck long term supply agreements for EV batteries, and funded a significant portion of lithium’s exploration and development cycle - especially in Australia. A major driver for this is China’s lack of high quality domestic lithium resources.

Cobalt is a key raw material in battery cathodes and acts as a critical safety component. However, auto makers are seeking to reduce their consumption, to reduce their reliance on it, and to boost energy density using nickel. But it is our opinion that cobalt will continue to play a role in lithium ion batteries for the foreseeable future.

Another factor we do not see changing is the reliance on the Democratic Republic of Congo (DRC) as the world’s primary source of cobalt, produced 69% of global supply in 2018.

The DRC is a potential bottleneck in the supply chain, especially considering that it is amongst the poorest and most politically unstable countries globally. Another ongoing concern facing battery manufacturers are the questions surrounding the ethical supply of cobalt sourced from the DRC through artisanal mining.

While the DRC produces most of the

world’s cobalt, it lacks significant processing capacity. Processing of cobalt is dominated

by China in the next stage of the supply chain and the country was responsible for 62% of cobalt chemical supply in 2018.

As lithium ion battery manufacturers reduce the amount of cobalt used in battery cells, nickel consumption is set to soar.

Batteries containing higher nickel content offer greater energy density, although this have come greater safety concerns.

The trend is to move towards high-nickel battery cathodes and this is set to put extra demand on the nickel to EV battery supply chain.

This means the 2.2 million tonnes-a-year nickel industry has to re-gear to supply battery grade nickel for the world’s megafactories. Out of the four materials we’re looking at in this article, the nickel market is the largest but currently has the lowest demand from batteries. However, nickel demand from EV batteries is set to grow by between 30-40% a year.

Graphite is used in battery anodes and it can be either mined or synthetically made. Flake graphite is the mined material which is used to manufacture lithium ion battery anodes.

China dominates both the mining and refining side of the flake graphite to anode supply chain.

In 2018, China was responsible for 56% of the world’s flake graphite supply. Over half of global supply comes from China in the provinces of Heilongjiang, Shandong, and Inner Mongolia. Notable volumes of natural graphite are also mined in Brazil and Mozambique.

China also dominates the next stage of the supply chain as 100% of the world’s uncoated spherical graphite supply, which is the processed anode material that is used in lithium ion batteries.

These four raw materials will play a pivotal role in the development of batteries needed to power widespread electrification.

It would be worth following them closely. n Robert Colbourn holds the position of Manager – Benchmark Membership at Benchmark Mineral Intelligence, a London based research and consultancy firm focusing on critical raw materials and disruptive supply chains. Robert’s primary role is editor of Benchmark Minerals’ quarterly review, covering the lithium ion battery supply chain, critical minerals and metals, disruptive technologies and emerging markets.

Benchmark Mineral Intelligence (Benchmark Minerals) is the world’s leading voice and most trusted provider of prices, data and advisory services in the lithium ion battery and electric vehicle (EV) supply chain.

Benchmark Minerals, a Price Report Agency (PRA), is globally known for setting the IOSCOcompliant, lithium reference price which is relied upon to negotiate contracts between lithium extraction operators, cathode manufacturers, battery cell producers and automotive OEMs. Robert Colbourn Manager - Benchmark Membership rcolbourn@benchmarkminerals.com M: +44 77 666 49448 www.benchmarkminerals.com Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Chart 1 Lithium ion Battery Megafactory Raw Material Demand (tonnes) at 100% Utilisation Rate

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P R O F I L E D C O M PA N Y

lake Resources n.l.

Why new projects are essential to supply the EV revolution Lake Resources: Why new projects are essential to supply the EV revolution

higher depending on policy and technology advances.

Globally, battery makers have committed US$300 billion in building around 100

“megafactories” by 2028, with EV makers

America’s newfound love for electric vehicles (EVs) saw more than 1.1 million hit the road merica’s newfound love for electric “The lithium industry is looking to having invested a further US$250 billion to by the end of 2018, which was led by Telsa. However, the EV revolution would have stalled vehicles (EVs) saw more than 1.1 increase supply by five to eight-fold in the expand production of EV’s over the same long ago without supplies of key battery minerals, principally lithium. million hit the road by the end of next five years, simply to meet the rising period.

2018, which was led by Telsa. However, the demand for EVs,” says Stu Crow, chairman Benchmark Mineral Intelligence predicts A soft, silvery-white metal, lithium is used to make batteries for smartphones, laptops and EV revolution would have stalled long ago of Argentina-focused lithium miner, Lake lithium supply will need to increase at a EVs. Demand has soared in recent years, with global output having increased threefold since 2005 to reach more than 300,000 tonnes last year. without supplies of key battery minerals, Resources. compound annual growth rate of 19 percent

principally lithium.

“This is hard to comprehend when you through to 2025, simply to meet demand. Yet Yet with miners’ expansion plans now falling short of expectations amid current sluggish A soft, silvery-white metal, lithium is used think there’s never been a commodity ramp even at the height of the market, the industry prices and weak investor sentiment, automakers and battery companies are now scrambling to make batteries for smartphones, laptops up supply so quickly.” only managed an 11 percent annual expanto secure supply. and sion, from 2015 to 2018.

EVs. Demand has soared in recent years, “The lithium industry is looking to increase supply by five to eight-fold in the next five years, with global output having increased three- a wall oF dEmand is coming Lithium is currently produced as “hard simply to meet the rising demand for EVs,” says Stu Crow, chairman of Argentina-focused fold since 2005 to reach more than 300,000 rock” spodumene in countries such as lithium miner, Lake Resources.

Analysts have projected that a “wall of tonnes last year.

Australia and Canada, and “brine” in the so Yet with miners’ expansion plans now demand is coming for lithium from the EV called “Lithium Triangle” of South America, “This is hard to comprehend when you think there’s never been a commodity ramp up supply so quickly.” falling short of expectations amid current sector,” and judging by the latest news, it is including Argentina. All types of lithium will sluggish prices and weak investor sentiment, easy to see why. be needed however, according to Benchmark.

A wall of demand is coming The global electric car fleet exceeded 5.1 automakers and battery companies are now “The question in the lithium market is no

million as of 2018, up 2 million from the longer whether spodumene or brine resourcscrambling to secure supply.

Analysts have projected that a “wall of demand is coming for lithium from the EV sector,” previous year. However, the International es will be developed – both are needed to and judging by the latest news, it is easy to see why.

Energy Agency has forecast that EV annual take us anywhere near the growth estimates The global electric car fleet exceeded 5.1 million as of 2018, up 2 million from the previous sales could reach 23 million by 2030, or even of the next two to three years,” Benchmark year. However, the International Energy Agency has forecast that EV annual sales could reach 23 million by 2030, or even higher depending on policy and technology advances.

Globally, battery makers have committed US$300 billion in building around 100 “megafactories” by 2028, with EV makers having invested a further US$250 billion to expand production of EV’s over the same period.

Benchmark Mineral Intelligence predicts lithium supply will need to increase at a compound annual growth rate of 19 percent through to 2025, simply to meet demand. Yet even at the height of the market, the industry only managed an 11 percent annual expansion, from 2015 to 2018.

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Steve Promnitz, Managing Director

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said in its July 2019 report, “Lithium’s price paradox.”

aRgEnTina: HomE To THE woRld’s lowEsT cosT liTHium Lake Resources sees its lithium brine projects in Argentina as part of the answer to the looming supply challenge. Based in the heart of the Lithium Triangle, home to the world’s lowest cost lithium output, Lake’s projects are adjacent to multi-billion dollar producers.

With the added upside of a potentially revolutionary technology solution straight from Silicon Valley, the company is quietly confident of delivering results.

With four wholly owned lithium brine projects comprising Cauchari, Kachi, Olaroz and Paso in its portfolio, Lake has assembled one of the largest lithium exploration plays in Argentina, spanning more than 700 square miles.

Already, Lake has identified a top 10 global lithium brine resource at its flagship Kachi project, equivalent to 11 times the size of Manhattan Island, however the company has even bigger targets ahead of it.

Lake’s managing director, Steve Promnitz points to the company’s upcoming prefeasibility study (PFS) for Kachi and recent high-grade discovery at Cauchari as potentially transformative, with added potential at Olaroz.

puTTing a valuE on lakE’s pRoJEcTs A pointer to the value of Lake’s projects comes from the prices paid for nearby operations.

Chinese producer Gangfeng Lithium invested a combined US$397 million to acquire a 50 percent stake in its Cauchari project, which was followed by a 10-year supply agreement with German automaker Volkswagen.

Together with other recent transactions,

including a US$280 million investment by Korean giant Posco, the implied acquisition cost is around US$55 million to US$110 million per million tonne of lithium carbonate equivalent.

“Doing the numbers on our projects and we’re looking at some potentially very valuable operations, still 100 percent owned by Lake,” Promnitz said.

TEcHnological soluTion could HElp savE THE planET A new technology developed by U.S.-based Lilac Solutions, Inc based on direct extraction could get the whole industry excited.

A Phase 1 engineering study completed with Lilac showed the potential for production costs at Lake’s Kachi project to be slashed to among the lowest globally.

Importantly too, high lithium recoveries of 85 to 90 percent were confirmed from multiple brine samples tested by Lilac, with concentrates produced in just three hours.

This compares to traditional brine operations, which have lithium recoveries below 50 percent and a lengthy nine to 24 month waiting period for evaporation to produce a suitable concentrate.

The technology also has an environmental benefit too, since traditional evaporation

ponds are not required and any water used is reinjected into the aquifer. Amid concerns over the level of water extraction and its potential impact on the ecosystem, such solutions will be crucial in ensuring the lithium industry’s sustainability.

For Lake, the next step towards production is building a pilot plant on-site to test Lilac’s technology, a process expected to be completed in late 2019.

The company then expects to be shipping product samples to potential partners and offtakers in early 2020 - confirming its ability to produce a high quality, low impurity product capable of attracting premium prices. n For more information on the company, visit www.lakeresources.com.au This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement.

Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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P R O F I L E D C O M PA N Y

aim: pXc / oTcQX: pgmlF

phoenix copper limited

P

hoenix Copper Limited “Phoenix” is a London AIM listed, New York OTCQX traded, base and precious metals explorer and developer. Phoenix focused on reopening the past-producing Empire Mine located in the mining friendly jurisdiction of Idaho, USA, where it holds 10.8 square miles of claims on areas of past producing mines.

Phoenix is developing an open pit heap leach copper mine on resources calculated following the Company’s 2017 and 2018 drilling programs; the company also plans to fund further exploration from the Empire Mine cash flow to minimise shareholder dilution while searching for a world class copper, gold, silver deposit.

Idaho is a mining friendly jurisdiction ranked first equal for least perceived risk by the Mining Journal Risk Report 2018. The local community of Mackay wholly supports the re-opening of the mine, which will revive a town originally established to support the historic mining activity.

Near-term production is targeted from a significantly de-risked low capital cost open pit ‘starter mine’ sitting above the old Empire

high-grade underground mine. A total of 413 holes have been drilled into the open pit area, generating an NI 43-101 compliant Measured & Indicated resource containing 74,000 tonnes copper, 30,000 tonnes zinc, 139,000 ounces gold, and six million ounces silver. A bankable feasibility study is scheduled for completion during 2020, and first production scheduled for late 2021 / early 2022. There are no apparent environmental or permitting obstacles – Empire is a brownfield site with no legacy issues, and no known flora, fauna, indigenous tribal, migratory fish or water issues. Much of the project is on patented land. Cash flow from the mine will be utilised to evaluate and explore the high-grade underground potential as well as the surrounding area, and to pay dividends to shareholders at the earliest opportunity.

The Company’s exploration upside is significant. The underground ore body, which was historically mined at copper head grades of 6-8%, is open at depth and along a 3.2 mile strike length. The Company’s consulting geologist considers that only 1-2% of the total regional ore systems are currently understood. The Empire property now con-

sists of 5,717 acres representing a number of significant exploration targets including: the strike extension to Empire (which contains three more former mines – Horseshoe, Bluebird and White Knob), the high-grade underground resource, the recently discovered high-grade Red Star lead and silver zone, the recently staked Navarre Creek Carlin-type, Nevada-style gold zone.

Phoenix also owns two cobalt properties on the Idaho Cobalt Belt, Bighorn and Redcastle, totalling 1,180 acres; in addition to located close to projects being advanced

by Canadian junior miners, including eCobalt Solutions and First Cobalt.

The Phoenix management team has successfully constructed, commissioned and operated mines in various jurisdictions worldwide. Management represents one of the larger shareholder blocks and is thus fully aligned with shareholders. With this objective, the Empire open pit mine is the first stage in a potential world-class mine, surrounded by significant exploration potential, offering exposure to high value metals with compelling demand and supply fundamentals, and playing a major role in a new world order of clean energy and electric vehicles.

Phoenix Copper Limited (AIM: PXC / OTCQX: PGMLF) – www.phoenixcopperlimited.com. n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

Dennis Thomas, CEO

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SNN did not receive any compensation for the publication of this profile.

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nasdaQ cm: wwR

P R O F I L E D C O M PA N Y

westwater Resources, inc.

W

estwater Resources, Inc. (NASDAQ: WWR) is a Nasdaq listed company headquartered in Centennial, Colorado.

Westwater Resources “Westwater” is an energy materials company focused on the development of the Coosa Graphite Project, a battery graphite business in Alabama. The company holds over 40,000 acres of mineral rights in the Alabama Graphite Belt, an area known for historic production of graphite materials prior to World War Two. Westwater has already achieved these milestone developments: • The company has produced all three of its intended products in the lab: Purified Micronized Graphite (ULTRA PMGTM), Delaminated Expanded Graphite (ULTRA DEX-DGTM), and Coated Spheronized Purified Graphite (ULTRA-CSPGTM).

• All three products are at prospective customers for testing • One battery manufacturer has asked for a one metric tonne sample – the final stage of prequalification testing • Westwater has secured a graphite concentrate supply agreement that will provide all the graphite it needs until the mine is ready to produce.

The plan for development of the Coosa Graphite Project is to: • Build and operate a pilot plant in 2020 for the production of bulk samples of batteryready graphite to: satisfy customer demand for qualification, provide important design and operations information for Westwater’s graphite processing plant.

• Finalize the design of the graphite process-

Chris Jones, President and CEO

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ing plant for construction in 2022-2023.

• Produce cash flow from the sale of battery graphite in 2023.

• Expand production from cash flow in 2026 to 15,000 metric tonnes per year.

• Build a mine on the Coosa Graphite Project site in 2028 from internally generated cash flow.

Westwater plans to develop this business utilizing project finance instruments including project-level debt, equity, and offtake financing.

Why Graphite? Each battery we use, whether for a conventional automobile, a flashlight or smoke detector, a phone or electric vehicle, needs graphite to increase its performance. In the case of Lithium Ion batteries – graphite is essential in making the electricity flow from and to the battery. With the growing market for all types of batteries, the market for graphite is increasing.

Why Alabama? First and foremost, the Alabama Graphite Belt is relatively unique in hosting some of the highest quality graphite deposits in the United States. Graphite from our Coosa Deposit has been shown to produce high quality electrochemical results – just the sort of properties that battery manufactures require.

Alabama is also a business-friendly jurisdiction, with several automobile factories sited within easy driving distance of our proposed facility.

Electric automobiles, such as those soon to be built at a Mercedes factory in Alabama, are important markets for our products.

Westwater Resources was originally incorporated in the late 1970’s to mine uranium in Texas, and ultimately processed some 9 million pounds of uranium for the nation’s nuclear power companies. The current team has been in place since 2013, and has been successful in diversifying the company into lithium exploration in Nevada and Utah, and now, battery graphite in Alabama.

The Westwater Team is made up of seasoned operations professionals with experience in growing successful businesses in several mineral commodities, energy and manufacturing: Chris Jones, President and CEO, has worked for 40 years in various mining businesses in

the US and Canada, and has, for the last ten years, led public companies listed in the US and Canada. He has a B.S in Mining Engineering degree from South Dakota School of Mines and an MBA from Colorado State University.

Jeff Vigil, Vice President Finance and CFO, has worked for over 40 years with energy and manufacturing companies, with extensive experience with US and Canadian listed companies. Jeff is a graduate of the University of Wyoming with a B.S. in Accounting.

Dain McCoig, Vice President of Operations, has extensive experience in the energy sector, with particular with the design, construction and operation of production facilities and has a B.S. in Mechanical Engineering from Colorado School of Mines.

Cevat Er, Vice President of Technical Services, has more than 30 years of experience as a technical professional earned B.S. and M.Sc. degrees in Geological Engineering.

Westwater’s experienced team, a supportive and experienced board of directors are fasttracking development of the battery graphite business. We welcome inquiries at: info@westwaterresoruces.net, or please take a look at our website (www.westwaterresources.net) for more information. n This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement.

Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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TsX-v: gpH / oTcQB: gpHoF

P R O F I L E D C O M PA N Y

graphite one, inc.

Writing Graphite’s New Chapter

G

raphite’s role in the history of human technology is right there in its name: Graphein, derived from the ancient Greek word for “to write,” referring to the early use of the material in the form of what later came to be called lead pencils.

Yet graphite’s 21st Century contributions can be described, as the American Resources Policy Network puts it, “Graphite today is at the core of more than just your lead pencil – it is at the core of 21st Century consumer technology.” Laptops and LEDs, smartphone and solar cells, Electric Vehicle batteries, drones and satellites, energy storage devices – even nuclear reactors: Each of these and many more applications depend on graphite as a key means for the efficient transmission of power.

As Electric Vehicles achieve higher levels of adoption and energy storage technology matures, rising graphite demand will put increasing pressure on supply. As of which the demand spike is dramatic - according to the World Bank, demand for graphite is projected to increase 383% between now and 2050, fueled by the rapid increase of lithiumion battery anode production.

Exploding demand for key graphite uses is one of the drivers behind the European Union identifying graphite as a “critical risk” material, and the U.S. Government including graphite on its Critical Mineral List.

Yet in the U.S., graphite import dependency is 100%, and has been for more than

25 years, since the last American graphite mine ceased operations.

Graphite One has one of the largest known natural flake graphite deposits in the U.S., near Nome, Alaska.

The Company’s graphite resource has unusual morphological characteristics, which the Company has labeled STAX: Spheroidal, T hin, Aggregated and Expanded. STAX makes it less costly to process into the Coated Spherical Graphite (CSG) needed for the advanced technologies mentioned above. As CEO Anthony Huston states, “Graphite One is more than a mine; we’re building into our operating plan an Advanced Graphite Materials Processing Plant to transform our graphite into CSG and other high-value products. We’re a tech company that mines graphite”.

Bringing new natural flake graphite mines into production will be critical to meeting rising tech demand – and with it, the ability to sustain advanced manufacturing

in the 21st Century. Even more critical is Graphite One along with the U.S, strategically positioning to supply raw materials to Companies in North America to be able to meet demand and reducing dependence on foreign supply. n Please visit the company’s website for more information: www.graphiteoneresources.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

America’s Emerging Tech Graphite Producer of Lithium-Ion Battery-Grade Graphite

GOT GRAPHITE? $1 billion NPV | 27% IRR | 63% EBDIT | 40-Year Mine Life

POWERING AHEAD GraphiteOneInc.com TSX-V: GPH | OTCQX: GPHOF

Anthony Huston, CEO

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The company paid consideration to SNN or its affiliates for this article.

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EMPOWERING LIVES THROUGH SPORT The Challenged Athletes Foundation (CAF) empowers individuals with physical challenges through sports. CAF provides grants for adaptive sports equipment, training and competition expenses to athletes age 4 to 77 across 103 different sports and activities in all 50 states and 70 countries.

Over the past 9 years our partnership with ROTH capital and the ROTH conference has raised well over $1.2 million to support our athletes.

Help empower the challenged athletes of tomorrow. Donate today at www.donateCAF.com

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MicroCap Review Magazine

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TsX-v: Fcc / oTcQX: FTssF

P R O F I L E D C O M PA N Y

First cobalt corp.

Near-Term North American Cobalt Supplier

S

ince its inception in April 2017, First Cobalt has transformed from a cobalt exploration company to a near-term cobalt supplier in North America. Today, First Cobalt boasts 100%-interest in the only permitted cobalt refinery in North America, a partnership with Glencore - the worldâ&#x20AC;&#x2122;s largest cobalt miner, and a pipeline of highly prospective projects that could provide a long-term supply of the critical mineral to America.

Fcc REFinERy | onTaRio, canada

FCC Refinery: Commissioned in 1996 and on care and maintenance since 2015

The FCC Refinery is a hydrometallurgical cobalt refinery in Ontario Canada, approximately 600km from the U.S. border and accessible by road or rail. On May 21, 2019, First Cobalt signed a memorandum of understanding with Glencore AG, whereby Glencore will supply 2,000 to 2,500 tonnes per annum (tpa) of cobalt feedstock and associated financing to recommission the FCC Refinery. A scoping study by Ausenco

Engineering Canada Inc., completed in May 2019, indicated that the Refineryâ&#x20AC;&#x2122;s annual production potential can reach over 5,000 tpa of cobalt with a capital cost of approximately US$45 million.

A definitive agreement between First Cobalt and Glencore was signed on August 26, 2019, with Glencore agreeing to provide a US$5 million loan facility to First Cobalt to complete advanced engineering, metallurgical testing, and field work; including

Trent Mell, CEO

Inside FCC Refinery

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the permitting associated with the recommissioning and expansion of the Refinery.

Subject to positive results and other terms and conditions, Glencore is also prepared to advance an additional US$40 million to complete the recommission and expansion.

This partnership means First Cobalt is on a fully-funded and non-dilutive path to cash flow.

A Definitive Feasibility Study for the refinery expansion is currently underway

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Iron Creek Project located in the Idaho Cobalt Belt

and is targeted for completion by Q1 2020.

First Cobalt plans to recommission a 12 tpd operation by Q4 2020 then conduct the necessary expansion efforts to increase the production profile to 55 tpd by Q3 2021.

Iron Creek Cobalt Project | Idaho, USA The Iron Creek Cobalt Project is located in Idaho, USA, along the most prolific trend of cobalt mineralization in the USA - the Idaho Cobalt Belt. The property consists of mining patents and exploration claims covering an area of 1,698 acres. Significant infrastructure is in place to support multiple drills and underground activity. Historic underground development includes 600 metres of drifting from three adits and an all-weather road connecting the project to a state highway.

In October 2018, a maiden NI 43-01 mineral resource estimate was announced for Iron Creek consisting of Inferred mineral resources of 26.9 million tonnes grading 0.11% cobalt equivalent under a base case scenario pit constrained and deeper mineral resource. An alternative underground-only scenario results in 4.4 million tonnes grading 0.30% cobalt equivalent. First Cobalt plans to prioritize advancing Iron Creek upon the completion of the Refinery expansion.

Canadian Cobalt Camp | Ontario, Canada First Cobalt controls a significant land package covering over 10,000 hectares in the Canadian Cobalt Camp, which hosts over

50 past producing mines. The Company intends to conduct more extensive exploration in this highly prospective land package, with an aim to create a long-term pipeline of cobalt supply to its Refinery in the future.

Outlook on Electric Vehicle (EV) Market There is a strong case for cobalt in the EV market. In 2017, a study by Benchmark Mineral Intelligence indicated that 80% of Li-ion batteries produced globally uses cobalt and the demand from EV batteries is projected to grow by 34% in 2019 (Citigroup). With an outlook of 37% average growth per annum through to 2023, the demand for cobalt is predicted to overtake available supply.

With no significant cobalt refiners in North America, the U.S., which is currently in position to become the second largest EV battery maker worldwide, is 100% dependent on cobalt imports from the DRC or refineries in China.

FCC Leadership Team FCC is managed by a leadership team that brings a full spectrum of skills in capital markets, geology, EVs, automotive development, and engineering.

Spearheading FCC is Trent Mell, an experienced mining executive with many achievements under his belt. Mr. Mell held senior positions with nickel-cobalt produc-

er, Sherritt International, North American Palladium, and AuRico Gold. He was formerly the CEO of Falco Resources, where he led a resource expansion program that more than doubled the resource estimate to 6.6 Moz AuEq at the former producing Horne VMS mine. Before joining First Cobalt, Mr. Mell built a mining division for PearTree Securities to advise issuers and investors on Canadian exploration and development opportunities. During his tenure at PearTree, his team raised $300 million in equity investment and became the largest provider of flow-through capital to the Canadian resource industry.

“Leveraging the recovering cobalt prices and the burgeoning electric vehicle market, we aim to position First Cobalt as the go-to supplier in North America,” commented Trent Mell. n Please visit the company’s website for more information: www.firstcobalt.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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MicroCap Review Magazine

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F E AT U R E D A RT I C L E

Q&A with Brent Cook, Exploration Insights

E

ach issue we ask Brent Cook to give us an update on the state of the junior resource ecosystem; after all he and his partner Joe are flying the globe checking out new opportunities in the sector. Thanks again Brent for answering our questions. I imagine you were probably in an airport or on a plane when you wrote this.

Safe travels my friend.

Why is this gold rally different from others before?

A: I am not sure how different it is, but one thing that sets this gold move apart is a global lack of trust and confidence in the US government’s reliability, which directly impacts confidence in the US dollar. The gold price, to a large degree, is the reciprocal of the US dollar. The current national and international turmoil is weighing on the dollar and we are seeing gold purchases by a variety of countries, funds, ETF’s, and individuals pick up.

We are seeing more and more projects outside North America. Is this a growing pattern? If so, why?

A: The current collection of advanced exploration to development projects reflect projects that were acquired three to six years ago, a time when foreign political and security risks were less obvious. However, over the past two years, companies have become more cognizant of foreign risks and

Brent Cook

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are focusing efforts in safer jurisdictions.

Australian mining companies in particular have been buying North American deposits.

Are base metal junior resource companies participating in the precious metals rally?

Why or why not?

A: Base metal companies are struggling.

The trade wars and increasing potential of a global recession have dampened base metal prices (with the exception of Nickel). Longer term however, viable copper deposits are in short supply and as the “greening” of the electric system continues, copper will be in high demand. We are focusing on high grade sulfide nickel deposits and high-grade copper deposits in safe jurisdiction within the base metal portion of the Exploration Insights portfolio.

lions. This sector performs very similar to the biotech sector where the suggestion of a ground-breaking medical discovery can move a stock 10x or more. Realize that virtually every modern convenience within your view would not be possible without metal, this demand will not be going away.

The key to making money in the MicroCap mining companies is to know what the prize looks like. Stick to honest and personally invested management that provide all the information via their website and news releases. Technical due diligence is critical, don’t rely on rumors or some paid promotional material. Get advice from someone knowledgeable of geology, mining, and costs.

Check your investment thesis against a company’s results and sell when this thesis is no longer valid, hoping for something to work out usually doesn’t work. Take the time to learn about geology and mining, it’s a fascinating and complicated subject. We have posted many free articles and videos on our website: explorationinsights.com Good luck out there. n

It seems the percentage gains of silver exploration companies exceeds the gains of gold companies. How do you explain this?

A: The silver price typically lags the gold price and is a more volatile metal than gold.

Over the past 20 years the gold to silver ratio has been between 50 and 90 to 1, averaging For more information about Brent Cook and Exploration Insights, please visit: www.explorationinsights.com about 65 to 1. It currently sits at around 85 to 1. A return to 65 to 1 would require a continued increase in the silver price relative to gold, or vice versa. Silver “bugs” tend to be more rabid than gold “bugs” and can take the silver price, and more significantly the silver equities, much higher than seems rational.

If you could give millennial investors new to the resource market 3-5 guidelines to follow, what would they be?

A: When speculating in the MicroCap explorers and miners, incredible gains (and losses) can be made over very short time frames. One high impact drill hole result can indicate a company valued in the $10’s of millions is on a metal discovery potentially worth $100’s of millions or even bil-

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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Help a child or widow who is coping with the aftermath of terrorism, war or traumatic loss. Make a tax-deductible clothing donation, become a youth mentor, fundraise in your local community, or simply call and tell us how you'd like to get involved.

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Tuesday's Children provides a lifetime of healing for those whose lives have been forever changed by terrorism or traumatic loss. Through a time tested, long-term approach, Tuesday's Children programming keeps the promise to support all those impacted by 9/11; builds resilience and common bonds in communities worldwide recovering from tragedies; and serves and supports our nation's military Families of the Fallen.

MicroCap Review Magazine 41 www.stocknewsnow.com

CRITICAL MATERIALS CORNER

H

umanity has been through a number of development periods, from the Stone Age through the Iron Age and beyond. For some time, I’ve been arguing that we’ve just left the Steel Age, when steel alone was largely enough to guarantee solid performance and design, and we are now firmly in the Age of Critical Materials.

Critical materials are, for me, defined by the enduser. Generally speaking, though, they are materials that probably never comprise the lion’s share of the bill of materials for a product, but without which that product wouldn’t have anything like the utility or value it was designed to have.

Think about something like your cell phone.

While we all complain about battery life, there are a few of us that still remember cellular telephones with nickel metal hydride (NiMH) batteries (or even worse, the days of plugging disposable batteries into a phone). Using a phone with NiMH batteries meant charging a lot more often, having to treat your battery with kid gloves, and generally a much poorer user experience than with our present lithium rechargeable batteries. If you look at a current-generation cell phone, there are only a few grams of actual lithium in that phone’s battery, but without that essential amount of lithium, your experience with your mobile device would be completely different.

Or consider something like air travel.

Keeping air travel inexpensive means using the smallest possible amount of fuel to get an aircraft from one place to another, while keeping the ratio of operating to maintenance time on each aircraft at its maximum. There really is only one way to raise fuel economy, and that’s to burn the fuel in the jet engine at higher and higher temperatures. But higher temperatures can result in more damage to the metal in the engine and more frequent required maintenance. Years ago, materials scientists and met-

n BY JON HYKAWY, PHD, MBA

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The Critical Materials Age

allurgists developed so-called “superalloys” for use in the hot boxes of jet engines. These alloys are made of nickel, iron, chromium, titanium, cobalt and a few other metals. Without these uncommon metals like cobalt, modern jet engines wouldn’t have anything like the power fuel efficiency and reliability that they do.

This necessity for critical materials to build a modern product occurs at all scales, from personal products to large-scale engineering.

Building modern infrastructure projects that will be cost-effective now sometimes requires stainless steel alloys that contain odd alloying elements in quantities that would have been unthinkable a few decades ago.

Critical materials can also, conceivably, be used in offensive ways, as well. The China-US trade conflict that exists as I am writing this piece on June 26th , may well get solved at or shortly after the G20 meeting in Osaka, Japan, but neither side has really offered the other a way out of this impasse and this conflict might well get worse. To date, both sides have generally used self-flagellation as their weapon of choice, raising tariffs on goods imported directly from the other side and making it tougher for their own citizens and companies to do business, with the hope that this costs more jobs in the target nation than their own.

However, critical materials offer China something of an asymmetric response in this fight.

Without suggesting that this represents China’s best or only foray in this sphere, China is the source of roughly 60% of the imports of a metal (and related chemicals) called antimony that is imported into the US. About 80% of antimony globally is used to make flame retardant chemicals and to harden lead alloys. This strange metal is imported in a raw form, predominantly from China, and is used in US factories and by US workers to make products like the flame retardants in polymer foam filling that goes into an uncountable number of products like furniture, and the lead electrodes that go into lead-acid car batteries or the lead used in ammunition. Now, if China were to suspend the sale of antimony directly to the United States, we are not saying that Americans would be unable to buy foam-

filled furniture, car batteries or ammunition, but importing a more finished downstream product rather than a raw material does suggest that the products will likely be more expensive and that at least some American factories and jobs will be lost. Maybe many factories and jobs. Multiply this potential impact by many times, because there are several other critical materials where China dominates imports, in raw form, to the USA. It is precisely this effect, higher costs and job losses in the target nation, that you want to create during a trade war.

Access to critical materials can be both a sword and a shield in business, as well. A few years ago, on September 4th, 2014, the American manufacturer Pratt & Whitney signed a large agreement to buy a metal called rhenium from Molymet of Chile, one of the world’s largest suppliers. “Large” is a tough adjective to apply to such a small market in terms of annual weight sold, but rhenium has outsize importance. Our argument, above, that the only way to improve jet engine efficiency is through higher operating temperatures, has culminated in the use of what is termed singlecrystal nickel-rhenium turbine blades in the best jet engines of today, whether military or civilian.

Pratt & Whitney bought a very significant chunk of globally available rhenium. Thus, they not only make sure that Pratt & Whitney are guaranteed access to this material, they also guarantee that their competitors are not. Given their market share in the space was lower than their share of rhenium purchased, there is a more than fair chance that their market share will grow.

There is a lot more to discuss about these critical materials and the companies working with them, both junior and senior. I look forward to sharing some of that with you in the months and years to come! n Jon began industry and company-specific coverage of critical materials such as lithium, cobalt, the rare earths, vanadium and tin in 2009 while with a prior firm, and started his investment industry career as a technology analyst in 2001. He was a co-founder of Stormcrow in early 2014, and has expanded this coverage since, becoming a widely recognized thought-leader in the analysis of critical materials markets and firms. He has also done work on alternative energy, battery and mechanical energy storage and neutrinos, the latter of which doesn’t help much with respect to critical materials. Jon holds a PhD in physics and a MBA.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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F EAT UR E D A RT ICL E

Why Young People Should Love Gold Stocks

I

t’s conventional wisdom in the investment industry to aim one’s marketing at older audiences. Older folks, as argued, have more money and interest in investing.

That may be true about the money, if you look at net worth, but I doubt it’s true if you look at willingness to spend disposable cash.

As a person who’s taught entrepreneurship to college students in many countries, I’m sure that the notion of less interest in investing is not true. There’s no lack of desire, only a common and incorrect belief that one has to wait until one is older to become an investor. Show young people this is wrong, and it’s amazing how quickly they leap into action.

After a talk I gave, one former student of mine got himself a day trading account and

taught himself how to use technical analysis to generate market signals. Within a year, he was making $10K per month, working out of his dorm room. That was in Minsk, Belarus, of all places.

My favorite part of this story is that my young friend saved 50% of his earnings, redeployed 40%, and lived on 10%. That still made him the richest kid on the block.

But the critical part for any young person reading this is that he started with almost no money. Instead of buying new clothes or spending all his money on beer and video games, he put everything he could scrape together into his investments. His timing was good, as the markets were rebounding after the crash of 2008, but it remains true

n BY LOBO TIGGRE

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that his scrimping for a few months paid off in spades.

If a young person can save up for a car or for a new computer, they can save up cash for investing.

The real beauty of this is that young people who have fewer responsibilities and burdens than older folks can not only afford to invest, but to speculate.

The trick is to think of speculating as spending. Once deployed, the money is spent. Gone. If you can accept that, you can keep calm, stay out of trouble, and swing for the bleachers when you’ve found a great opportunity. If you’re successful at it, this “gone” money can come back and change your life.

One can think of this as being like going to Las Vegas to spend money having fun gambling (That’s not my idea of fun, but it’s a useful metaphor). The odds are much better, however, for disciplined speculators than for gamblers in Vegas. We don’t just throw the dice; we research our opportunities carefully to stack the odds in our favor. Best of all, win or lose, each exercise teaches a valuable lesson, improving the odds in the next round.

But what to speculate on?

Young people are well aware of the fortunes made by some when Bitcoin soared 20x in 2017—and many are looking for the “next Bitcoin.”

This fact alone spells the end of the idea that young people aren’t interested in speculation.

And there’s more. Many, if not most,young people I meet don’t believe there’s such a thing as a secure job anymore. That’s why they’re interested in entrepreneurship and investing.

But they’re no dummies. Apart from a few fanatics, most concede that Bitcoin’s spectacular run in 2017 was likely a once-ina-lifetime event.

So what’s next? Pot stocks?

Sure, many are interested. But I haven’t met any who are convinced they know of a pot stock that will go 20x in one year (as I said, they’re no fools).

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Tech stocks?

Sure, they like them. They probably understand them better than I do. And they all know that Amazon, Apple, and Microsoft returned over 100x to early investors. But they also know that took decades.

So what else is there?

Well, as it happens, the resource sector is well known for generating extreme gains in short periods of time. That’s especially so for junior gold and silver stocks.

Okay, the 100x winners are rare, but 10x to 20x winners happen pretty much every year.

• Novo Resources (NVO.V), for instance, was a 10x winner in just a few months during the same year that Bitcoin went ballistic.

• Great Bear Resources (GBR.V) is a 10x winner right now over the last year.

• Reaching back a bit, GoldQuest Mining (GQC.V) was a 50x winner in 2012— a time when gold prices were falling.

• Further back, I remember recommending First Majestic Silver (AG, FR.TO) at around C$1.80, before that stock went well north of $20 in 2011, for better than 20x gains.

My point for young people—or anyone interested in making a lot of money today, is obvious: there is a market where 20x gains are not once-in-a-lifetime events, but relatively frequent occurrences.

Best of all is that gold and silver are breaking out this year. At $1,500 per ounce as I write, gold is still well below all-time highs.

Meaning there’s plenty of upside left, but it has broken out of a multiyear rut that kept it below $1,400. Silver is just starting to catch up.

Forget the war of words between Bitcoin HODLers and gold bugs. Save up some money you can afford to speculate with and start researching the opportunities in gold and silver stocks today. Those of us who’ve been doing this for a while stand ready to

help you.

For more on the basics of speculative investing, please see my free report: Speculation 101.

There are other resources available on my website, www.IndependentSpecuator.com and others as well. I encourage you to make use of them all, so you don’t have to reinvent the wheel.

Whatever you do, don’t miss out on gold’s emerging bull market—that’d be like missing out on Bitcoin in 2017.

That’s my take. n

Lobo Tiggre, aka “Louis James,” was legendary speculator Doug Casey’s protégé at Casey Research for almost 14 years, until early 2018. He joined the Casey team in 2004. By 2007, he was writing and making investment recommendations in Casey’s flagship newsletter, the International Speculator.

Tiggre is a now published author, a public speaker, and an expert often cited by media on matters relating to investments, especially regarding metals and mining. He brings his experience, his connections and his deal flow directly to readers of www.

IndependentSpeculator.com, without the barrage of marketing hype used by other publishers.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Lobo Tiggre does not own shares of any of the companies mentioned.

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F EAT UR E D A RT ICL E

The Quiet but Dramatic Revolution in Mining…..

H

n BY JAMIE STRAUSS

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istorically considered high risk with a poor execution record and complexity with a low regard for governance and transparency, the mining industry has been undergoing a quiet but dramatic revolution in recent years. On the verge of bankruptcy just four years ago, the leading producers are now recording record cash flows, healthy balance sheets, and dividend yields in excess of 6%. Workers accident rates on operating mines have fallen to record lows and environmental practices are more robust than at any previous time.

Private Equity, almost extinct form the industry 10 years ago, now dominates the landscape to finance new mines and through this position have been the driving force of improved returns, risk mitigation, and heightened awareness of the environment and safety. Even within exploration, the odds are improving as techniques improve through the use of appropriate technology.

So how does such a positive backdrop of the industry fail to inspire investors from millennials through to institutions? I am not arguing for across-the-board increases in valuation - that is earned based on merit.

What I am striving for is greater recognition of a sector that has fallen out of love, is suffering an extended hangover from the supercycle period, and a complete lack of confidence in itself. This is a sector that is instrumental to the solutions of the global environmental crises, critical to the growth of many of the world’s leading industries, and yet is a sector that hardly registers in most investors portfolios.

The problem comes back to my first sentence - “...high risk, poor execution, complexity, and transparency”.

THE pRoBlEm and iTs HisToRical conTEXT In 2003, the securities regulators in the leading mining jurisdictions of Canada and Australia set up stringent reporting requirements in the form of 43-101 and JORC codes. These were designed to protect investors and covered the parameters of reporting both reserves/resources; as well as economic studies in order to progress and finance a project. They have without doubt been a success in reducing fraudulent behaviour.

But despite the original intent to provide better and more transparent information, these reports now typically extend well beyond 400 pages (often close to 1,000!), cost tens of millions to prepare and are filled with such complexity that very few people are capable of interrogating the information to any real advantage.

Other than better policing of the sector to protect investors, what is the purpose of these reports if few can understand them?

Imagine a funnel where thousands of data points and assumptions are fed into the top.

When all that data is calculated an NPV and IRR pops out the bottom of the funnel.

Brilliant, so long as the numbers achieve an acceptable hurdle, it will prove to the world that we have a positive economic study that will attract investors. But 4 out of 5 mines that progress into development exceed their budgeted development cost by an average of over 40% - usually leading to devastating consequences for the shareholders.

So there is a missing link… and it can be found at the top of the funnel. We need to better understand the inputs and assumptions made, improve the transparency of the

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available data, and become more flexible in adapting decisions to mitigate risk in mining development even if it results in higher capital or operating cost.

The problem we as investors face is that data itself, if understood in the first place, cannot always be taken at face value, and yet the cost and time to analyze is usually prohibitive to most. For the average investor, over-confident interpretation of the Reporting Codes, or of the data itself has replaced fraud as the investors primary concern. What’s more, existing research focuses on financial centric opportunities and not the key technical risks that determine a positive or negative outcome - if these risks are based on unrealistic assumptions then the compounded impact can lead to calamitous results as is so often the case.

The void of capital within the sector

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we experienced following the end of the “supercycle” has been filled by a new breed of sophisticated investors - private equity, strategic investors, and royalty companies.

None of these groups would consider an investment without some form of appropriate due diligence - a costly and time consuming exercise designed to mitigate risk and explore opportunities. The negative repercussions of this within the small pool of investment opportunities is that lower quality assets tend to get left behind for those who do not complete satisfactory due diligence.

Having explained the problem and the impact, what is the solution?

I launched Digbee (thedigbee.com) earlier this year with the overriding intention to open the sector to a large and growing audience through the provision of plain language due diligence, by an independent

expert network of mining professionals, at a significantly reduced cost to the options that currently exist.

So how does it work and who does it benefit?

Digbee has put together the world’s first expert network of accredited mining professionals - Geologists, Metallurgists and Mining Engineers. Once approved to write on Digbee, they select a project to write on, sign a disclosure form, complete their Report using a Digbee template and publish onto the platform. Pricing of the report is dynamic based on the experience level of the underlying expert but is expected to average ~$2,500. Buyers of the Report are then encouraged to score it. The experts not only receive 50% of all sales, but in producing these reports, are given a platform to raise their profiles within the industry.

At the heart of each Digbee Report will be a Digbee Score - an objective score by the Expert author based on three key and standardised questions relating to the discipline being reported.

The user base is now able to anonymously access a library of objective analysis, in plain language, validate key metrics, identify opportunities and risks that would not have been possible before - all at a fraction of the cost currently available.

For those mining companies who accept that development risk exists on any project and identifying mitigating impacts are a positive process to minimise delays, cost overruns and disappointments - then Digbee Research provides value added analysis to a wide audience of investors at no upfront cost to themselves.

Digbee’s strength lies in the ability to bring all parts of the industry together, to improve transparency,find solutions, to strengthen due diligence and ensure we accelerate transformation of this critical industry for the benefit of all participants. n Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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The company paid consideration to SNN or its affiliates for this article.

P R O F I L E D C O M PA N Y

TsX-v: nRg / oTcQB: nRgoF

newrange gold corp.

N

evada is not only the fifth largest gold producer in the world but, for 2019 has been named

by The Fraser Institute as the best mining jurisdiction in the world. With this as a backdrop, Newrange Gold Corp. (TSXV: NRG; OTCQB: NRGOF) has gone one step further by acquiring an option to earn 100% of what was formerly known as one of the highest-grade gold districts in the state. From the discovery of gold in 1884, the Pamlico District quickly became known for its high grades and locally spectacular visible gold. The district was consolidated in 1896 and a townsite constructed, followed by a 20-stamp mill. One of the unique aspects of this property is that it has remained in private hands ever since, meaning that it has seen very little in the way of modern exploration.

The rich mining history at Pamlico has provided Newrange with incredible access to the gold mineralization via an immense network of underground workings. Some 300 mine openings, or portals, have been surveyed, leading to an estimated 5 miles (8 kilometres) of underground workings, primarily in the hills known as Pamlico Ridge.

In all, these mine workings cover an area of approximately 1.5 km by 1.0 km, and the

Robert Archer, CEO

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mineralization is believed to be open in all directions.

In addition to doing basic exploration such as geological mapping, airborne geophysics, etc., Newrange has been conducting underground sampling and has followed up with some preliminary reverse circulation (RC) drilling. The sampling has returned intervals such as 75.5 metres of 2.97 g/t gold, 40.0 metres of 13.89 g/t gold, and 24 metres of 12.48 g/t gold. Drilling in an area that was never mined returned high-grade intercepts such as 6.1 metres of 98 g/t gold, including 1.5 metres of 341 g/t.

To date, the Company’s drilling has been conducted within a relatively small area of only 500 by 100 metres, roughly onethirtieth of the area of known mine workings. While the underground workings themselves are like horizontal drill holes and provide low-cost access for sampling, they need to be surveyed prior to new drilling from surface. To do this, Newrange is using state-of-the-art hand-held laser scanning technology. With the ability to collect up to

300,000 data points per second, this leadingedge technology can generate 3D models of the underground workings. In addition to aiding with drill hole targeting, every sample taken underground has an identifiable location with sub-centimetre accuracy, such that the results can eventually be used as part of a NI 43-101 resource.

Preliminary metallurgical studies carried out earlier this year indicated that the mineralization at Pamlico should respond well to heap leach processing. With a deep oxidation level of up to 300 metres, highly fractured rock that should minimize crushing, and free, non-refractory gold, Newrange has already confirmed a number of key attributes that should attract the attention of mine developers and producers.

The Company is now selling their assets in Colombia where they had been previously focused, which will provide it with a nondilutive source of cash for future exploration at Pamlico. In addition to continuing the underground mapping and sampling, they plan to conduct Induced Polarization (IP) geophysics as soon as possible and to follow up with additional diamond drilling. n Please visit the company’s website for more information: www.newrangegold.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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P R O F I L E D C O M PA N Y

westgold Resources limited

“Making old mines great again”

W

estgold Resources Limited as it sits today, is the 7th largest domestic gold producer in Australia, producing around 300,000 ounces per annum. All of its mines are in outback Western Australia in the Murchison Goldfield.

The Murchison Goldfield is the other major historic gold mining area alongside the famous Kalgoorlie Region.

Westgold has a long history in the region, being a producer from the Tuckabianna Gold Mining Center in the mid 90’s. Westgold was an independent explorer and developer in the small end of town until it was taken over by a diversified miner, Metals X Limited in 2013.

Metals X used Westgold as the parent entity to establish a gold division. From scratch in 2013, it began an aggressive and countercyclical acquisition trail amassing 5 gold projects and over 15 million ounces of gold resource.

Among them was the Murchison projects, which were all closed at the time having succumbed to the gold price slump of the early 2000’s.

Westgold has spent the last 4 years re-building, re-furbishing, and restarting these operations in what has been a fearlessly executed episode of capital re-investment to re-establish gold production and generate long term gold output. Westgold was demerged from Metals X in December 2016 and now trades as a completely independent listed gold miner.

This should come as no surprise to Westgold followers as the drivers have been the dynamic

Peter Cook, Managing Director

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The Tuckabianna Process Plant 1.2 million TPA (Tonnes per annum)

duo of Peter (Talkie) Newton and Peter Cook.

An ex-stockbroker and geologist who teamed up more than 25 years ago, and who have built a reputation as one of the best buyers, sellers, and operators of mining assets and projects in the country.

Peter Cook or “Cooky “as he is affectionately known in Australia says “Mate, we are just renovators, we buy low and sell high just like all our shareholders try to do. We just do it in a bigger scale with gold mines and over a longer period”. What Westgold, and for that matter Talkie and Cooky have done over decades, is to buy the underperforming and sometimes closed mines at a fraction of their capital replacement costs then set about the revival and renovation process. Cooky, with a style laced with laconic panache says “It’s pretty simple mate, you get a pigs ear and turn it into a silk purse. It’s the bit in the middle that is difficult, but our team have travelled the journey many times and they do it better than anyone else.”

What sets Westgold apart from others is that Westgold has done all this without debt.

Even in the last 3 years it has managed to invest $350m in its Murchison assets. Only $25million of that coming from the market.

The remainder crafted through asset trading and the re-investment of free cash flow into its operations. However, that phase of heavy

investment is now coming to an end. Westgold has passed the tipping point and is now starting to make more than it spends. It is in the late stages of transitioning from a developer to a steady state producer. With that comes an increase in gold production, a reduction in operating costs, and all-in sustaining costs.

Most importantly, that also means a shift to generating excess cash to continue its growth.

The re-rate is about to start as Westgold begins to close the value gap between developers and producers - comparatively against our peers. Cooky says, “seems we got the timing right here with Aussie gold prices rocketing away in recent months which has exploded the cash margins of our business.” n Please visit the company’s website for more information: www.westgold.com.au This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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F E AT UR E D A RT ICL E

Inaccurate Negative Blog Articles Creating Opportunity for Longterm Investors

E

ver have the experience of looking at your own portfolio and witnessing a particular stock dropping CONSIDERABLY on seemingly no news?

n BY SAM NAMIRI, MBA

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Then after digging deeper, you find out that the drop was precipitated by the release of a negative blog or “news” article that alleges that the company and/or its management have been engaging in nefarious activities.

Before you dump the stock like many other investors are prone to do, read on below to learn why this may not be the smartest move in some cases - while remembering Warren Buffet’s observation that successful investors have the ability to “Be fearful when others are greedy and greedy when others are fearful.”

Given human nature, it is not surprising that many investors run first and ask questions later. These types of “hatchet job” blog posts and articles often do a great job of invoking fear and casting seemingly plausible aspersions that put doubt into the mind of most investors. Even when overblown or completely inaccurate, these articles can cause a painful drop in a company’s value that can sometimes create a profitable buying opportunity for patient investors with a longer time horizon who are willing to do the homework to separate fact from fiction.

It’s important to understand some of the motivation and goals of these authors and

articles. Short sellers bet on, and profit from a drop in a stock’s price. Short selling is a very difficult practice because you are generally fighting against the natural tendency of inflation and GDP/market growth to drive stocks up over time. Some of these short sellers or their proxies release these articles to juice their gains through active intervention or disinformation tactics in certain cases.

These negative blog articles, or “short” write ups are generally well researched, well written, and often voluminous. They sometimes find information that is not easily accessible and that is credible enough to induce fear and plant the seeds of doubt about the company and its management or prospects. As a professional investor managing a MicroCap fund at Ridgewood Investments and in my prior roles, I have seen issues such as accounting shenanigans, undisclosed related party transactions, and even past fraudulent activity by management being exposed in such articles - in many cases accurately so.

However, sometimes these articles misrepresent or exaggerate allegations to induce fear and panic, causing the stock price to drop rapidly and substantially. In some com-

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Be forewarned, however, that even in the situations in which we know the company well and have confidence in our ability to differentiate, it can still be challenging and uncomfortable to second-guess conventional wisdom and ignore the ambient panic induced by these attacks. panies, especially those dependent on ongoing access to capital markets to raise additional capital for operations, even inaccurate allegations can create a downward death spiral that turns fiction into a self-fulfilling reality. Generally class action lawsuits are quickly filed by enterprising securities strike suit firms, who have free optionality by filing an action, thereby creating even more panic.

This attention can also influence regulators such as the SEC, FTC or other regulatory agencies to initiate inquiries - lending even more momentum to the attack campaign. Many targeted companies are in more highly regulated businesses and are often singled out for attack, especially if their stock price has appreciated rapidly up to that point in recent periods.

I can remember many times where companies that I already had an investment in were subject to such an attack! When the stock price of a company gets cheap enough after an attack has already had its intended effect, it can help to limit future downside and make the prospective risk - reward ratio quite enticing. The key here is to promptly or have the ability to quickly perform extensive due diligence on the company to decide whether the attack is largely justified or without merit.

Be forewarned, however, that even in the situations in which we know the company well and have confidence in our ability to differentiate, it can still be challenging and uncomfortable to second-guess conventional wisdom and ignore the ambient panic

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induced by these attacks.

A common pattern that we see is the tendency of write-ups to mention things that seem worrisome on their face. However, a little digging and analysis may uncover that they stretched the truth or overestimate the significance and impact of the issues raised.

The key to seeing through the short-sellers ruse is to be able to carefully deconstruct the negative thesis and assess its true significance.

Some of the considerations that are helpful in telling the difference include: Does the article shed light on anything that is probable and that actually affects the financials of the company in a significant way? Is the article factually correct or is the author taking a smaller issue and extrapolating it to make it seem more significant than it actually is? Is the author’s identity and motives transparent or hidden? How does management react to such claims? These are all important questions to ask yourself and analyze to help decide whether it’s worth taking a contrarian approach and buying, or at least holding tight during a panic caused by short-seller articles.

There can also be a trading element to these situations. Many instances these articles come in a series of coordinated writeups. One option is to be a contrarian and take an opposite position by waiting and monitoring the price action of the stock during these multiple short “attacks”. When a short article comes out and finally fails to cause the stock to trade meaningfully lower,

this may be a sign of a bottom and create extraordinary investment opportunities as a result.

Short-attacks can create opportunity for long-term investors who can separate the signal from the noise remembering than an unfounded attack should not permanently change the intrinsic value of a business.

Indeed, smart investors can take advantage of these situations to improve their overall returns through well executed contrarian actions. As Benjamin Graham once said: “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” n Sam Namiri is a Portfolio Manager and Analyst at Ridgewood Investments, where he concentrates on managing the Ridgewood Select Value Fund, our fund focused on investing in small and micro-cap companies. Ridgewood focuses on implementing intelligent value-oriented investing strategies (modeled after investors like Warren Buffett, Ben Graham, and Phil Fisher). Prior to Ridgewood, Mr. Namiri was an analyst at a small cap hedge fund and the founder of a jewelry television and manufacturing company. Mr. Namiri has a BS in Industrial Engineering and Operations Research from the University of California, Berkeley and an MBA from Columbia Business School. www.ridgewoodinvestments.com Note: This article is informational in nature and should not be construed as providing individualized investment advice. Investors are advised to conduct their own research and due diligence or seek the advice of a registered investment professional. Both the Author and Ridgewood Investments disclaim any liability from the use or misuse of this information.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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A Nuclear Winter for Value Investors

V

alue investing is in the depths of a nuclear winter. It’s a grim scenario.

After outperforming the market for generations, value investors are now enduring one of the longest episodes of underperformance since Benjamin Graham published his magnum opus Security Analysis in 1928. In fact, CNBC now wonders if value investing is “dead.”1 The classic definition of “value” in the academic literature is the value “factor,” price-to-book value. From 1926 to June 2007, the most undervalued stocks on a price-to-book value basis returned 30 times more than the most expensive ones.

Over the past 12 years since June 2007, cheap book value stocks have trailed expensive stocks by a cumulative 65 percent. The value factor has a lot of ground to make up to break even with the market and glamour stocks.

Of course, few value investors actually use book value to value companies outside financials. Most, following Warren Buffett’s guide, undertake a valuation based on some measure of cash flow. We can use Ken French’s cash flow data to get a better idea about the average value investor’s performance. The news isn’t much rosier.

The two charts look nearly identical, but they are slightly different because the cash flow data starts in 1951, 25 years after the start of the book value data, and the scale is different.

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Figure 1. Cheap book value massively outperformed to June 2007, but has underperformed since (Data Source: Kenneth R. French1)

Cheap cash flow stocks returned 84 times as much as expensive stocks from 1952 to April 2014. However, in the 5 years since, cheap cash flow stocks have lagged by a cumulative 61 percent—the worst episode in the cash flow data.

The performance of value stocks has led many value investors to do some serious soul searching. Some question whether changes in accounting and market structure have made book value obsolete. The argument goes that intangible assets are increasingly important, and buybacks increasingly significant, destroying the information in book value.

That’s possible, but it doesn’t explain the underperformance of other value ratios like cash flow or earnings. What killed value itself?

The excuses are myriad, but low rates, technology, and passive indexing get the most press.

That view holds low rates, low expectations for inflation, and makes future cash flows more valuable now,dwhere near-term cash flows are less valuable. Low rates therefore favor growth companies that don’t earn much now but look to generate more in the future, over value stocks that earn more now. If rates climb, value should come back into vogue.

TEcHnology Another argument runs that technology has killed the business cycle and mean reversion.

Companies that get ahead and establish dominance in an industry become unassailable— think Amazon versus every other retailer, or Google versus every other search firm. No mean reversion, no point in finding undervalued stocks. Just buy the winners in each industry.

low RaTEs and inFlaTion EXpEcTaTions

passivE indEXing

The Federal Reserve’s extended age of ultralow interest rates has temporarily hurt value.

The final justification is the rise of ETFs and other passive indexing products. Most

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In each instance, value went on to generate unusually strong performance in the years after. Often, the best time to be a value investor is after such a nuclear winter for value. If that’s the case, now might be a particularly good time to start digging for value. That is, of course, if the Fed, ETFs, technology, buybacks, and accounting haven’t killed it for good. n Tobias Carlisle, Founder and Portfolio Manager, Acquirers Funds, LLC, a deep value investment firm. tobias@acquirersfunds.com 646 535 8629 1 “Is value investing dead? It might be and here’s what killed it,” June 23, 2019, CNBC, Yun Li, https://www.cnbc.com/2019/06/21/is-valueinvesting-dead-it-might-be-and-heres-whatkilled-it.html 2 https://mba.tuck.dartmouth.edu/pages/faculty/ ken.french/data_library.html

Figure 2. Cheap cash flow massively outperformed to 2014, but it has also underperformed since (Data Source: Kenneth R. French)

well-known indexes such at the S&P 500, the Russell 1000, and the Nasdaq 100—are market capitalization weighted. That means those instruments allocate the largest portions of new investor cash flows to the biggest companies, making them bigger still. The winners keep winning, regardless of valuation.

One ray of sunshine for value investors is

long interludes of underperformance aren’t unusual. In the cash flow data, there have been 6 notable times when value stocks lagged glamour stocks by more than 20 percent over a rolling three-year period: 19571960; 1969-1972; 1980-1981; 1989-1991; the Dot Com boom from 1998-2000; and the latest, and longest one, 2014 to date.

Tobias Carlisle is the founder and portfolio manager of Acquirers Funds, LLC. He is the author of the bestselling book The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market (2017), Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014). He is a co-author of Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors (2016), and Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012). His books have been translated into six languages. Tobias also runs the website AcquirersMultiple.com—home of The Acquirer’s Multiple® stock screeners. His Twitter handle is @greenbackd.

He has broad experience in investment management, business valuation, corporate governance, and corporate law. Before founding the precursor to Acquirers Funds in 2010, Tobias was an analyst at an activist hedge fund, general counsel of a company listed on the Australian Stock Exchange, and a corporate advisory lawyer. As a lawyer specializing in mergers and acquisitions he has advised on deals across a range of industries in the United States, the United Kingdom, China, Australia, Singapore, Bermuda, Papua New Guinea, New Zealand, and Guam.

He is a graduate of the University of Queensland in Australia with degrees in Law (2001) and Business (Management) (1999).

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Figure 3. Rolling Three-Year Returns: Cheap cash flow stocks regularly underperform for years at a time (Data Source: Kenneth R. French)

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MicroCap Review Magazine

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F E AT UR E D A RT ICL E

How Medical Industry is Applying Advances in Artificial Intelligence and Data Generation

A

s we approach 2020, I believe that a trend that is highly disruptive to the medical industry is applying artificial intelligence and data generation to medical industry verticals such as drug development, regenerative medicine, and wearable technology. Despite the advances in genetics, the pharmaceutical industry has generated the bulk of its profits in oncology during the last ten years from “blockbuster drugs”. Blockbuster drugs are defined as drugs that produce in excess of $1 billion in revenues. In general, the strategy behind these drugs is to get them approved for a cancer indication and then continue to run either solo or combination trials to show efficacy for additional indications. A good

example of this is the drug Opdivo, which is produced by Bristol-Myers Squibb. In 2014 it was approved by the FDA for patients with advanced melanoma. Five months later it was approved for lung cancer. Since then it has received approval for an additional 14 cancers. Last year it generated over $7.5 billion in revenues1.

However, as we move forward, the drug development strategy is changing and we expect to see new drugs and combinations of existing drugs target specific sets of gene mutations within a cancer type. So rather than seeking approval for a new ovarian cancer, drug companies are developing drugs that target specific “mutations” occurring 1 https://www.genengnews.com/a-lists/top-15best-selling-drugs-of-2018/

n BY DAVID WEINSTEIN, MD

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in the ovaries. There are 24 different mutations that cause ovarian cancer. The current approved drugs work well in 4 of the 24 mutations. By collecting genetic data from existing ovarian cancer patients and using artificial intelligence to gain insight into how the patients reacted to different treatments, pharmaceutical companies can generate predictive models for what types of drugs can act like silver bullets to the specific ovarian cancer mutation. In fact, according to a report by IQVIA™ Institute on Global Oncology Trends in 2018, over one-third of trials are using biomarkers to stratify patients, pointing to even more personalized cancer treatments in the future2. So what is the disruptive technology investors should look for that benefit from this trend?

Investments offering a pure play in this space are those that have proprietary algorithms (artificial intelligence) and access to tumor response data. The most noteworthy example of this was Foundation Health Care (NYSE: FMI). FMI went public in 2013. Just two years later Roche invested $250 million in the company before acquiring the company for over $5 billion in 2018. The attraction? Foundation had cancer testing based on genetics that allowed them to compile a predictive model for new drug development by cancer mutation. This is called personalized oncology. Stay tuned for more in this space3.

Regenerative medicine is another area from disruptive investing. The thesis behind regenerative medicine is that the body has endogenous ways of repairing itself that can be harnessed. Historically this has been through the use of stem cells. Stem cells are cells with the potential to develop into many different types of cells in the body. They serve as a repair system for the body. Stem cell therapy involves taking stem cells from a person’s femur and then reinjecting them into a joint such as the knee or hip that has 2 https://www.iqvia.com/institute/reports/globaloncology-trends-2018 3 https://www.reuters.com/article/us-rochehldg-m-a-fmi/roche-pays-24-billion-forrest-of-cancer-expert-foundation-medicineidUSKBN1JF0F3

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become dysfunctional. The stem cells then signal the body to repair itself. Since stem cells are taken from a person and injected back into the same person, it has not been classified as a drug so there really has been no investment thesis other than investing in companies that have clinics. This is changing. Vericel (NASDAQ: VCEL) received FDA approval for a product that applies the process of tissue engineering to grow cells on scaffolds using healthy cartilage tissue from the patient’s own knee. We expect several new drugs + stem cells to enter the clinic in the next few years4. Looking into the future, investors should pay attention to the next generation of regenerative medicine which will focus on exosomes. Exosomes are tiny vesicles produced by cells that carry genetic information. It is hypothesized that exosomes instruct the body’s own stem cells to repair damaged tissue. Unlike stem cells, which are as old as the patient, exosomes can be derived from discarded placenta’s and are a superior information delivery vehicle. Avalon Globocare (NASDAQ: AVCO) recently announced a partnership with GE Healthcare to produce standardized exosomes for skin care and hair growth. This is Another area an area to focus on5. for investors to watch is wearable technology for healthcare monitoring and data collection. The big players here are Apple (NASDAQ: AAPL) with the Apple Watch and Fitbit (NYSE: FIT) with its diverse line of fitness wearables. The key area for investors to pay attention to will be clinical grade noninvasive sugar monitoring as well as accurate blood pressure and hydration. The investment play is less about the device and more the real-time data being generated. It is artificial intelligence applied to this data that will drive new business from insurance com4 https://www.globenewswire.com/newsrelease/2016/12/14/897537/0/en/FDA-ApprovesMACI-for-the-Treatment-of-SymptomaticCartilage-Defects-of-the-Knee-in-Adults.html

panies. This will result in a new set of winners within the wearable technology space.

In conclusion, personalized cancer treatment driven by artificial intelligence, regenerative medicine, and wearable monitoring will disrupt the current medical investing landscape over the next five years. I believe much of the investment opportunities will come from smaller, more focused companies that are not subject to the forces of existing stakeholders. n Opinions expressed are solely those of the author and do not necessarily express the views or opinions of his employer. The article is not an attempt to provided investment advice. Investors should conduct their own research or seek advice from a registered investment professional.

David Weinstein Managing Director, Investment Banking Mr. Weinstein has thirty years of experience with U.S. securities and investment banking firms. He has been a Managing Partner of Investment Banking since 2005. Prior to joining Dawson James Securities, Mr.Weinstein was Director of Research for National Securities Corporation and, prior to that, Director of Institutional Research for Joseph Charles & Assoc.

He has written and lectured on a variety of financial topics and has been interviewed on numerous television and radio shows including the Dow Jones News Service, Wall Street Journal, Bloomberg Business News, and other industry media. Mr. Weinstein has spearheaded a multitude of IPOs, public and private placements. Throughout his career he has performed a variety of consulting services for growth companies including valuations, due diligence, and consulting services to both public and private companies. Mr.Weinstein routinely visits client companies, interfaces with senior executives on a regular basis and attends industry events. He received a BA from St. John’s College, Annapolis, MD, and a Masters of Public Policy from the University of Maryland. dweinstein@dawsonjames.com Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

David Weinstein does not own shares of any of the companies mentioned.

5 https://www.globenewswire.com/ news-release/2019/07/22/1886067/0/en/ Avalon-GloboCare-and-GE-HealthcareAnnounce-Strategic-Partnership-to-AccelerateStandardized-Automation-and-Bio-productionfor-Cellular-Medicines.html

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57

FA M I LY O F F I C E C O R N E R

Family Offices are Creating Value in MicroCaps

O

ver the last 10 years, a relatively new class of investors has emerged with an insatiable thirst for quality transactions that on a risk-adjusted basis outperform traditional asset classes such as real estate. Family Offices are actively investing in all segments of the investment spectrum, from real estate to venture capital. They are very private, so accurate data is difficult to obtain.

Yet the latest estimates are that family offices controlled between $3 and $4 Trillion in 2017, according to Bloomberg. They are driven by yield and IRR, and participate in both debt and equity investments. Many Microcap companies routinely enter into private transactions with hedge funds and other institutions. The PIPE market is the most well established institutional capital source for most Microcaps.

However, most institutions have limited holding periods and are structurally required to return capital at specific periods of time. This can put pressure on publicly traded equities, sometimes at times that are inconvenient for the issuer, for example during subsequent capital raises. Family offices are ideal investors for Microcap companies because in most cases they are subject to none of the aforementioned limitations.

One challenge that does exist with Family

Offices is the lexicon that they use and also the investment structures that they implement. Gaining an understanding of this will advance discussions. They generally invest through special purpose entities that are structured as general or limited partnerships.

In addition, learning how to approach family offices is very important. The “Do’s and Don’ts” have been addressed in previous issues. The question to ask is how can a company best leverage a family office? In terms of the “big picture”, the best approach is as a balance sheet partner that can provide a consistent source of equity and credit.

Specifically, preferred equity and term loans are typical family office structures that offer long term stability without the need for near term liquidity through registration statements and other means that impact issuers in terms of management cycle time, cost, and market exposure. A second approach is as an uplisting partner.

Uplisting to a major exchange is a predictable way to create value. Increased investor visibility, the ability for shares to be purchased by a much wider audience, both institutional and retail, creates tremendous value by virtue of increased access to capital. Combine that with a solid underlying business model and the smart money will gravitate to your

transaction. Over the last three years 67 companies uplisted to senior exchanges in 2017, 58 in 2018, and about half that amount have uplisted so far this year. Uplisting can be for Microcaps because the scope of potential investors available to purchase shares on the open market increases significantly, creating access to larger pools of growth capital, greater liquidity and ultimately more efficient valuation of the enterprise. Last year in 2018, 36 companies uplisted on NASDAQ Capital Markets, 10 uplisted to NASDAQ Global Select and 12 uplisted to NYSE American.

How To aTTRacT a Family oFFicE as a lisTing paRTnER Family offices invest in funds and other managed products, however, in recent years there has been a trend toward direct investments driven by fee sensitivity and also the displacement of the need for managed products due to the development of internal “private equitylike” capabilities and virtual Chief Investment Officer services. So the trend is in favor of direct investments, and the best way to attract a family office partner is to spend time explaining the business rather than “pitching a stock” or pre-structured deal. Explain a clearly welldeveloped investment thesis focusing on the

n BY KARL DOUGLAS

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fundamentals of the business and clearly identifying the uses of the capital will definitely get the conversation off to a good start. Keep in mind that most family offices generated their own capital from successfully running their own businesses. They are experienced operators. In addition, they understand what liquidity and increased investor exposure mean for an effective investment thesis.

Examples There are several other advantages: for example, major exchanges are also aware of the benefit to public shareholders when there is long term shareholder equity on the books.

Balance sheet strength goes a long way in terms of expediting the uplisting process. It’s also a good idea to prioritize family offices that have experience in your specific sector.

Recently, a Nasdaq listed fintech company, Ideanomics announced a joint venture with Singapore based family office Yongjin Group- a family office that specializes in finance companies. A review of public filings https://ideanomics.com/divisions/mobileenergy-global/ and press releases clearly demonstrates the benefit that Ideanomics is getting from the relationship. Another benefit is that family offices communicate with each other. So when larger financing rounds are needed, quite often families will invest together. Liquefy, a Hong Kong-based blockchain agnostic issuance platform for security tokens, recently raised $2.6 million.

The round was led by Ideanomics and other family offices such as Soul Capital, a Hong Kong single-family office that also specializes in digital currency transactions. This list of family office participation in public deals is extensive and growing. Google “Family office in Nasdaq” and you’ll uncover a myriad of leads from basic stock buyers to strategic investors across many sectors.

As a listing partner, the family office investor will usually be under NDA and brought across the line to have access to non-public information. And at that stage, the transaction approach can transition into more pri-

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vate equity and business development company-like structures. There are many positives to this since management will benefit from the expertise of families that have already built successful businesses. When it comes to equity investing, some of the minority protection considerations that family offices will seek are: Corporate Governance - This can vary depending on whether the family office is investing directly in the public company or through a blocker structure of another special-purpose vehicle mechanism.

Board Seats - Ability to have a board member.

Pre-emptive rights - which allow the investor to subscribe to future offerings, thereby maintain their percentage ownership.

Restrictions on Transfer of Equity - In order to prevent unnecessary and potentially harmful changes to the shareholder base.

Lock-up provisions - In order to prevent management and other investors from exiting early than the FO. Tag-Along / Drag Along - Specifically in the case of investment through special purpose entities.

Liquidation Preference - In the case of investment through SPV’s.

Registration Rights - in many cases, an FO may require an S1 to be filed within a certain period.

Right of First Refusal/Offer MicroCap companies have a voracious appetite for growth capital. It is incumbent upon management teams to know how to raise capital efficiently. As the company grows and cash flow becomes more predictable,

the company can transition from a Business Development Company type to credit to bank credit. However, with a family office partner onboard, FO’s will generally be very satisfied to provide credit on the same level as BDC’s.

So yields in the high single-digit to mid-teens, often with equity kickers, are another option.

Family offices come in all shapes and sizes ranging from $100M on the low end to several billion on the high end. Consider TPG Capital founder David Bonderman’s family office, Wildcat Capital Management and other family office mega investors like Thomas Gutermann. These are the types of investors that are ideally suited to partner with MicroCap companies. n

Karl B. Douglas is the Managing Partner at PPMT Capital Advisors, Ltd.., a multi-family office advisory firm. Mr. Douglas has a career that spans over 30 years of investing in private and public companies.

PPMT Capital invests in private equity and debt investments of $15M to $100M in Mining & Energy, Food and Agriculture. Environmental Services, Infrastructure, and Real Estate.

For further information contact: kdouglas@ppmtcapital.com 800-401-9017 Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of registered investment professionals. The author does not own shares or any equity or debt interest in any companies mentioned in this article before or at its publishing.

Karl Douglas does not own shares of any of the companies mentioned.

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oTcQB: ammX

P R O F I L E D C O M PA N Y

ameramex international, inc.

A

meraMex International, Inc., incorporated on May 29, 1990 in Nevada, was listed on the OTCQB Market on July 5, 2019. The Company is a provider of new and refurbished heavy equipment to logistics companies, infrastructure construction companies, and forestry conservation organizations—both nationally and internationally.

The Company has agreements with Swissbased Menzi Muck and US-based ASV to market their line of new mastication equipment with US manufacturers such as Taylor Machine Works to market their line of new heavy-duty forklifts and empty/loaded container handlers; including Terex Heavy Equipment to market their line of new frontend loaders, scrapers, and excavators.

As a provider of new equipment, for sale or lease, AmeraMex CEO Lee Hamre quickly recognized the advantage of purchasing used equipment from customers and reselling to others. The Company has a large equipment refurbishing facility in Northern California where it refurbishes millions of dollars of used equipment and resells to customers in the US and internationally. This is an extremely profitable operation and the facility is being expanded to meet demand for refurbished equipment.

In 2018, US trade with foreign countries was $5.6 trillion. This was broken down into $2.5 trillion in exports and $3.1 trillion in

Lee Hamre, CEO

imports of goods and services. The US is the world’s third-largest exporter, after China and the EU. The US is the world’s second largest importer after the EU. The increase of imports and exports has created a demand for EPA approved forklifts and container handlers. Sales of new and used container handlers and forklifts currently generate the majority or revenue for the Company, with rental equipment contributing 10 percent.

This demand, along with continued expansion of product distribution centers across the US, has contributed to an increased requirement for this equipment. Distribution centers must have the ability to store, track, and maneuver shipping containers. By incorporating containerization into downstream transportation and upstream supply chain workflows, companies can improve asset utilization, use fewer trucks, drive fewer miles, reduce fuel costs, and enhance distribution center operations.

The Company’s CEO, Lee Hamre, has 40 years of industry experience. Most of the department managers, shop personnel, and mechanics have an average of 10+ years within the heavy equipment industry. The board is made up of successful entrepreneurs/professionals in finance, heavy equipment, consulting, and operations. They average 30+ years within their specialties.

The board is very active in the operations of AmeraMex. AmeraMex is, to our knowledge, the only

public company that rents, leases, and sells new and used equipment to a variety of industries. It is also only one of six publicly traded companies within a similar CIK code.

These companies are very large and provide a wide variety of rental equipment from seismic equipment and shipping containers, to modular buildings and electronic test equipment. United Rentals, a $10 billion company, is the closest as they rent construction and industrial equipment.

Growth strategies consist of organic growth through continued expansion of products and markets such as the new lines of mastication equipment for forestry conservation, increased rental pool inventory, and an acquisition strategy to expand market reach. n Please visit the company’s website for more information: www.ammx.net This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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pRivaTE company

P R O F I L E D C O M PA N Y

clear cannabis, inc.

How this leading Colorado-based company’s strategic planning created a competitive advantage in the cannabis industry

C

lear Cannabis, Inc. [CCI] is a distribution infrastructure company which licenses intellectual property rights to partner businesses operating in the legal cannabis industry to manufacture, market, and distribute THC and CBD products under The Clear™ brand. CCI licenses intellectual property to partners, who manufacture and distribute products in states where cannabis is legal.

Most companies handle all aspects production of THC and CBD products, from seedto-sale. However, that business model does not work nationally. That is why CCI has followed in the footsteps of giant global brands such as McDonald’s and Coca-Cola. While other companies are limited to states they can set up manufacturing in, CCI can license products to manufacturers in every legal cannabis state. This means that while companies are busy working on getting licenses to produce their products, CCI licensed products are already on dispensary shelves. The Clear THC products are currently available in Arizona, Colorado, Nevada, Oklahoma, Oregon, and Washington.

John Cushman, CEO

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Bringing a global brand mentality to a state level operation gives CCI a competitive advantage. It allows a customer base to grow outside of a hyper local market. While positive revenue from one state is great, the same revenue generated from multiple states is even better. Multi-state revenue paves the way for more expansion as more states begin to legalize adult-use cannabis. When people purchase The Clear™, it doesn’t matter the state it was sold in, consumers know they can expect the same euphoria every time.

The CCI Board is built on success across many different sectors. Led by President, Richard Batenburg Jr., a former stockbroker and cable executive with more than 25 years of success as an entrepreneur and business owner. Batenburg is joined

by Chief Executive Officer John Cushman, who comes to CCI after founding Solany LLC, a document management consulting firm, and leading Solany as the CEO for over 13 years. Rick Batenburg III, the Chief

Investment Officer of CCI, who previously worked as a Financial Advisor and Private Equity Specialist at Merrill Lynch, managing accounts for high profile clients. The board is rounded out by CCI board members Dave Cole, President and CEO/Founder of EMX Royalty Corporation, and Jason Wagner, tax partner at Richey May & Co., LLP and board member of Porter Billups Leadership Academy and Minds Matter Denver.

The cannabis market is growing at an unsustainable rate for many businesses. The number of investors flooding the market with capital is causing businesses to grow quickly before imploding. CCI has a strategically planned growth structure. The company continues to be profitable as it expands to new markets, which is not something many companies in cannabis can say.

While many of the large companies are evaluated based on their potential to grow after cannabis is legalized, CCI licensed products are already in consumer’s hands. In cannabis, shelf space and sales dictate who can succeed and who will not. n Please visit the company’s website for more information: www.clearcannabisinc.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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MARKET MAKER CORNER

What is the Difference between a Specialist and a Market Maker?

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n BY ERIC FLESCHE

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any investors are curious about how OTC stocks trade, as well as the difference between specialists and Market Makers.

Market Makers represent their own firm’s customer orders and orders from other brokers who send them their own customers’ orders. In addition, Market Makers may represent their own firm’s capital and corporate interest in an issuer.

On both Nasdaq and OTC Link there are several Market Makers quoting an issuer, each with their own bid and ask prices.

The best bids and offers from these Market Makers combined make up the level 1 quote price, also known as the inside market. It’s common that the Market Maker with the best bid price is different from the Market Maker with the best ask price. Market Makers on Nasdaq and OTC Link are obligated to execute up to their own quoted bid/ ask prices and respective sizes at those prices, but they are not obligated to execute versus other Market Maker prices.

Specialists use an “open cry” system or auction system, act as Market Makers too, but also are obligated to keep the market orderly by matching orders in their trade ledger. The Specialist’s bid and offers are a combination of the customer orders it is holding and the Specialist’s interest in keeping an orderly market. Specialists post both a bid and an ask price at all times that represents the best bid and ask price on that exchange. Since Specialist are quoting both the best bid and ask price on that exchange, they are obligated to execute orders at those quoted prices. Specialists are committed to providing liquidity to the exchange on both sides, where Market Makers are under no

obligation to quote where they don’t have an interest in the issuer. Market Makers on Nasdaq are required to keep certain minimum bid and ask prices throughout the day, which acts similar to the Specialist model to keep an orderly market. However, OTC Link Market Makers do not have the same obligations as Nasdaq Market Makers. Issuers are often under the impression that OTC Link Market Makers are obligated to place a bid and offer at all times. OTC Link Market Makers are under no obligation to post any specific bid or offer unless they are holding a customer order that has a requirement to be represented and shown in the marketplace.

Therefore, many Market Makers will have an unpriced quote on the bid or offer until they receive a customer order that meets these requirements. Ultimately securities are going to trade where there is market interest, and that market interest is mainly made up of customer orders that are represented in the marketplace by Specialists and Market Makers respectively. n Glendale Securities, Inc.,a FINRA member since 2003, makes markets and accepts deposits of OTC securities, including those quoted on OTC Pink, OTCQB, and OTCQX marketplaces.

Eric Flesche eflesche@glendalesecurities.com 818-907-1505 www.glendalesecurities.com Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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TsX & FsE: HBp

P R O F I L E D C O M PA N Y

Helix Biopharma corp.

H

elix BioPharma Corp. (“Helix” or the “Company”) has developed a novel platform technology (“DOS47”) that combats tumor acidity.

Tumor acidity impairs immune functions, hampers the effectiveness of many chemotherapeutics, and even certain immunotherapy agents. While this hallmark of solid tumors is well defined for certain cancer conditions, there is no effective therapy that targets this fundamental feature of tumor development.

Dr. Heman Chao, CEO

DOS47 is an enzyme that reverses the acidic condition by metabolizing urea, a metabolite which is abundantly found in the body, into ammonia. Pharmacological doses of ammonia are cytotoxic and raise pH. Increasing pH improves the activities of certain chemotherapeutics and restores depressed immune function.

Helix’s lead therapeutic from the DOS47 platform is L-DOS47. This drug is a conjugate of an enzyme and an antibody that targets carcinoembryonic antigen-related cell adhesion molecule 6 (CEACAM6), an antigenic tumor marker that is over expressed in many cancers. A Phase I study of L-DOS47 in metastatic lung cancer has been completed while two phase I/II studies of L-DOS47 with chemo, in lung cancer, are ongoing.

More recently, the company has received approval for a phase Ib/II study in pancreatic cancer with L-DOS47, in combination with doxorubicin.

Pancreatic cancer is the third leading cause of death from cancer in the United States and kills more than 350,000 people per year worldwide. Currently, treatments for pancreatic cancer include surgery, radiation and chemotherapy. Unfortunately, these treatments have been largely inadequate, and only approximately 8% of patients survive for five years or longer. Pancreatic ductal adenocarcinomas are particularly difficult to treat due to a complex organization of tumor cells and the tumor microenvironment. In addition, the tumor microenvironment is highly acidic in these patients, due to the preferential use of glycolysis by the tumor cells. The use of L-DOS47 in this disease represents a new approach in tackling this difficult condition.

Helix is led by an experienced management and board. Dr. Heman Chao, Helix’s Chief Executive officer, is trained in bio-

chemistry and a co-inventor of the DOS47 technology. Dr. Chao has led multiple teams in the Company including research and business development. Mr. Frank Michalargias, Helix’s Chief Financial Officer, has had diverse senior finance and operational industry experience with both public and private organizations.

Helix is traded on the Toronto Stock Exchange under the ticker symbol HBP. The Company recently closed a CAD $7.0 million private placement financing.

Management is focused on creating awareness of the Company’s technology and clinical development programs. In late 2019, the Company expects to provide readouts on its lung cancer clinical studies on and during 2020, along with additional readouts on its open label pancreatic study. n Please visit the company’s website for more information: www.helixbiopharma.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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MicroCap Review Magazine

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F E AT UR E D A RT ICL E

How to Spot the Best of the Undiscovered

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n BY BRANDON MACKIE

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e all know the “know it” when we see it. A surge in volume. A rocketing stock price.

It’s the classic breakout.

It could be a stellar earnings report. A disruptive technology. Or a partnership with a Fortune 100 company.

Whatever the reason, this inflection point marks the moment a microcap goes from the obscure to the discovered, often en route to becoming a market darling.

If you owned shares before the breakout, a celebration is in order. If not, you’re probably kicking yourself for not finding the company sooner.

But what if you could learn to spot these undiscovered gems before they have their moment in the sun? What if you could predict which microcaps are destined for glory and which are doomed for obscurity?

In this article, we’ll discuss the Top 4 indicators to look for to in your next undiscovered winner.

small company experience. It could be an otherwise solid team that wasn’t properly incentivized.

Or maybe they are good operators – but have been comfortable at the company and would rather take a steady salary than take risks to grow the business and keep pace with competitors.

Either way, having a good jockey to bet on is essential with microcaps. Company culture, strategy – just about everything flows from the top in these small companies.

But from our experience, hoping management will wake up one day and turn things around is not a strategy. Patiently wait for the change to happen instead, and you’ll have a good thesis for why the future will be better than the past.

A new management team can bring missing skill sets, a fresh strategic vision, and the morale boost so many microcaps need.

Just make sure to vet their backgrounds and ensure their incentives are properly aligned.

1) managEmEnT cHangE

2) nEw pRoducTs

Much like Billionaire Richard Branson quips the way to become a millionaire is to begin as a billionaire and then start an airline, the way to become a microcap is to start as a smallcap and then screw things up.

This process creates many of the fallen angels in the microcap universe. And the first thing to happen is often replacing bad management with better management.

Bad management comes in many types.

It could be a seasoned executive who lacks

If an undiscovered company is being neglected by the market, there’s probably a good reason. And usually, it’s a simple one – whatever product or service they offer isn’t delivering the growth to get anybody excited.

So to turn things around, something needs to change. And that usually means a new product launch, business line, or transformative acquisition to ignite growth.

If you make a daily habit out of reading press releases, you’ll see these announce-

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You can do all the due diligence in the world but management will always know more than you as an investor. They see the customer orders, competitor moves, and market trends long before you’ll see their impact in the filings. ments regularly. But why wait until the quarterly financials to see if the product release was a hit or flop?

These can be golden opportunities to deepen your due diligence. Visit the company. Speak with customers. Search for product reviews on blogs. And if it’s a consumer product, try it out for yourself!

If you start to hear good things, you’ll have a solid clue the financial performance could follow.

3) Insider buying You can do all the due diligence in the world but management will always know more than you as an investor. They see the customer orders, competitor moves, and market trends long before you’ll see their impact in the filings.

This is why you should watch their actions closely. As Peter Lynch says, insiders sell for many reasons but they only buy for one – they think the stock is about to go up. And when insiders are buying, it’s your clue a catalyst may be on the horizon that will send a company into the world of the discovered.

You’ll want to see open market purchases and not just option grants or exercises. This signal is most bullish when multiple insiders are buying. It’s great to see the CEO buying.

It’s even better to see the CFO buying. They are the notoriously conservative types so if you see them buying, pay attention.

Buying from management isn’t the only thing to look for. Long before an undiscovered company breaks out, they’ll need capital to get there – and if you see strate-

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gic investors putting money to work in an undiscovered company, you might be on to something.

These could be sophisticated hedge funds, high-net worth individuals, or even larger competitors in the company’s industry.

As they say, follow the smart money.

4) Spin-offs In a spin-off, a business becomes free from its corporate shackles to trade as a standalone company. A refreshed management team now has the freedom to fund new projects, rationalize operations and trim overhead.

And with an enticing option grant, they are more incentivized than ever to perform.

Yet many times spin-offs stay undiscovered long enough for you to acquire a healthy position. This is because institutions often indiscriminately sell the spin-off. And management won’t want to tell the story until their option prices are set.

But as the new management team starts to execute, spin-offs can quickly go from undiscovered to market darlings. And as pure-play investments, they can soon command higher multiples than the parent company they left.

It’s no wonder spin-offs can be an investor’s dream. These unique situations are how famed value investor Joel Greenblatt delivered 40+% compound returns over a 21-year period through his Gotham Fund.

Spin-offs don’t come around very often but when they do, you should pay attention.

Bottom Line Don’t let a stagnant share price and low liquidity fool you into thinking nothing exciting is happening at these undiscovered microcaps. Under the surface, a new management team or product launch is laying the foundation for the next market darling.

Learn to spot these transformations before the broader market, and you’ll be on your way to outperformance. n Brandon is a passionate microcap investor. He has developed a specific set of criteria for selecting investment ideas. The key attributes include: Attractive business models Compelling valuations Quality management teams He then conducts intensive research, talking to management teams, industry contacts, and other like-minded investors. His philosophy is to know his stocks better than anyone else and build a concentrated portfolio around them.

Based in Texas, Brandon spent several years as a project manager and engineer with a multi-national oil company, a place where he could use BSc in Chemical and Biomolecular Engineering. That’s where he developed his technical writing skills.

But then he got the investing bug. He started reading articles and books by the gurus of value investing: Warren Buffett and Ben Graham. He was hooked.

After following boring large cap stocks for a while, he began channeling all that experience to microcap stocks with cash flow. After being completely selftaught in the investing arena, he couldn’t get enough.

He started getting all these ideas about stocks and companies, so he began writing a blog, which he has now rolled into https://smallcapdiscoveries.com/.

Brandon writes about stocks he likes, but he also writes about process, how he thinks, and he analyzes his mistakes in an honest, raw manner. That’s where a lot of the best information is for retail investors.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

MicroCap Review Magazine

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oTcQX: oTcm

F E AT UR E D A RT ICL E

Three Principles for Thriving Public Markets

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scar Wilde once wrote that “Everything popular is wrong.” He was describing our natural tendency to find comfort with well-established people and widespread ideas. Regulators, faced with the opportunity to open markets to alternative choices, hear a chorus of respected voices resistant to change. The SEC took until the year 2000 to repeal Rule 390—the rule that gave the New York Stock Exchange a monopoly in trading Blue Chip securities. The principles of open, transparent and connected public markets prevailed.

We raise this as the old idea underlying Rule 390, centralization of trading, is now being pushed as a popular fix for small company liquidity and capital formation. Of course, individual traders are determined to make trades in many different places, which means government intervention would be required to force stock trading back onto the largest stock exchanges[1]. Rent-seeking regulations are often cloaked in the language of “reform” and the public good.

We Believe in Open Markets “Curb of bigness is indispensable to true Democracy & liberty.”

—Louis D. Brandeis Experience teaches that the best products develop from the race for consumers, not due do regulatory mandates. Competition creates diversity of choice, and not just between exchanges—but between brokers and dealers, and between exchanges and alternative markets. This is not a new idea.

In the 1970s, Congressional rulemaking[2] advocated for the principle of opening markets to fair competition when it directed the SEC to create economically efficient securities markets enhanced by technology.

The inverse of big monopolies is a decentralized and fragmented marketplace—an energetic condition of capitalism beneficial to consumers. Twenty years ago, the underdog automated quotation syst , NASDAQ, bragged about the multiplicity of market centers it supported. They boasted about their network of over 300 market makers, agency brokers and ECN; —linked together by technology and transparenc, —competing for every trade. They lobbied hard against Rules 390 and 500 that enabled a despised monopoly.[3] Today, a more established NASDAQ promotes the misperception that small company liquidity must be bolstered by banning other exchanges from competing with the NASDAQ order book.

We Believe in Transparent

n BY CROMWELL COULSON

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Markets “Electric light the most efficient policeman.”

—Louis D. Brandeis

On the positive side, transparency and data availability are now fueled by improved technology, empowering the daily decisions of traders and investors. Driving transparency is also not a new idea. The Exchange Act of 1934 included public disclosure principles that formed the very DNA of the SEC. Congressional rulemaking[4] in the 1970s required the availability of public market prices. Regulators will only succeed by focusing on broader access to useful information.

As an industry, we must encourage increased transparency to make markets work effectively and enable investors to easily analyze, value, and trade securities.

We Believe in Connected Markets “Organization can never be a substitute for initiative and for judgement.”

—Louis D. Brandeis Those SEC Congressional mandates from the 1970s also endorsed two critical practices: connecting trades with competitive price providers and matching investor orders directly [5]. These policies challenged market monopolies and unnecessary markups from specialists. A direct connection allows a trade to follow the shortest or most efficient path to its best destination. Every player who touches a trade—a broker, a dealer or an exchange—will take a cut of the transaction in some form. Yet, during the past twenty years, rather than rely on the wisdom of the crowd to choose winners and losers, regulators have favored the supposed simplicity of the agency brokerage business and exchange-matching engines over dealer market making. If we want vibrant markets,

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we should treat all intermediaries equally.

Rather than reducing small-company trading to a single, centralized exchange— which studies show harms investor execution quality,—[6] let’s allow the market to decide. Traders should choose whether a trade goes directly to an exchange, to the market makers creating the best liquidity, or to a lower-fee dark pool. This freedom empowers market participants to optimize execution quality, add intermediaries that increase the value chain, and steadily remove extraneous costs.

These Principles Foster Progress & Innovation “There are no shortcuts in evolution.”

—Louis D. Brandeis Finally, we need a more imaginative and sweeping approach to enhancing capital formation. Regulatory restricions, —not secondary market struture, —prevent more companies from going public. Disclosure drives investor protection and efficient markets. But we must continually find ways to lower the costs for issuers and empower investors with the internet’s open access to data. Small investors can keep themselves out of harm’s way if we shine a clear light on the actions of powerful players. To level the playing field, investors need timely, consistent facts on company share issuance and insider buying and selling, as well as understanding of large long and short positions.

The muddy plumbing of transfer agents, clearing, custody, and stock loans must finally be unclogged through better data sharing and trusted record keeping. The creatures and structures that investors cannot see should keep regulators up at night.

Smaller public companies should not have to raise capital—at a significant discount to market pices, —through opaque private offerings from unregulated intermediaries.

We need to make crowdfunding regulations

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work, expand access to shelf offerings, and invent alternative methods[7] for companies to directly connect with share trading liqf courseIn addtion to, more benefits, such as Employee Stock Ownership Plans and margin eligibility, should be offered to companies that choose transparency. In the future, going public should be easier than remaining private.

Open, transparent, connted — : these three qualities describe a public market where competitive forces can thrive over the long term.

We live in a democracy founded on the revolutionary idea of individual liberty. That freedom is enshrined in open markets that foster greater transparency and build connections.

While our tactics and technology will change, these enduring principles will chart a path to the most informed and efficient markets. The potential for true innovation must outshine the false-promises of centralized control and complacent popularity. n Footnotes:

[1] A recent example is the NASDAQ Total Markets proposal, a slickly written marketing piece for government mandated monopolies and duopolies. See, Nasdaq Total Markets: A Blueprint for a Better Tomorrow.

[2]Congressional findings of the 1975 Amendments to the Securities Exchange Act of 1934 codified in Section 11A of the Exchange Act provide, among other things, that [“i]t is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure (i) economically efficient execution of securities transactions (ii) fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets” (15 U.S.C. § 78k-1(a)).

[3] See, Jenny Anderson, “Nasdaq Asks SEC to Open ‘Roach Motel’” NYPost.com (May 14, 2003), available at: https://nypost.com/2003/05/14/nasdaqasks-sec-to-open-roach-motel/ [4] “It is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure . . . the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities” (15 U.S.C. § 78k-1(a)).

[5] “It is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure . . . the practicability of brokers executing investors’ orders in the best market and an opportunity, . . . for investors’ orders to be executed without the participation of a dealer.” Id. [6] AQR Capital Management conducted a study that used live trade execution data across 21 developed equity markets over a 19-year period, to measure the real-world trading costs and price impact. Lack of

competing exchanges, no OTC trading, and intraday auctions were the three largest negatives for investor execution quality. See, Frazzini, Andrea and Israel, Ronen and Moskowitz, Tobias J., Trading Costs (April 7, 2018), available at SSRN: https://ssrn.com/ abstract=3229719.

[7] See, Cromwell Coulson “Give Companies Easier Access to Public Markets” Bloomberg (March 22, 2017), available at: https://www.bloomberg.com/ opinion/articles/2017-03-22/give-companies-easieraccess-to-public-markets R. Cromwell Coulson - President, Chief Executive Officer and Director of OTC Markets Group R. Cromwell Coulson is President, CEO and a Director of OTC Markets Group, responsible for the company’s overall growth and strategic direction. Since acquiring OTC Markets’ predecessor business in 1997, Cromwell has transformed the company from a privately-held publisher of brokerdealer quotations into a publicly-traded company operating three public markets for 10,000 securities that trade nearly $200 billion in dollar volume annually. Cromwell is a strong advocate of improving access to capital for small companies, supporting a diverse ecosystem of broker-dealers, and empowering investors with information. He has testified before Congress and spoken on these and other issues at numerous industry conferences. Cromwell is a former Chair (2017-2018) of the FINRA Market Regulation Committee that advises FINRA on rulemaking and trading issues. Prior to OTC Markets, Cromwell was an institutional trader and portfolio manager at Carr Securities Corporation. He holds an OPM from Harvard Business School and received his BBA from Southern Methodist University.

About OTC Markets Group Inc. OTC Markets Group Inc. (OTCQX: OTCM) operates the OTCQX® Best Market, the OTCQB® Venture Market and the Pink® Open Market for 10,000 U.S. and global securities. Through OTC Link® ATS and OTC Link ECN, we connect a diverse network of broker-dealers that provide liquidity and execution services. We enable investors to easily trade through the broker of their choice and empower companies to improve the quality of information available for investors.

To learn more about how we create better informed and more efficient markets, visit www.otcmarkets.com OTC Link ATS and OTC Link ECN are SEC regulated ATSs, operated by OTC Link LLC, member FINRA/SIPC. Subscribe to the OTC Markets RSS Feed Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

MicroCap Review Magazine

67

ACCOUNTING CORNER

Judged By the Company You Keep Y

our mother was right. If she told you once, she told you a hundred times: “You will be judged by the company you keep.” The company she was talking about, of course, were the weird friends with whom you were hanging out. Little did she know that one day you’d be hanging out with a different kind of company—a publicly traded company, and you’d be doing it from the C-suite. Still, mother was right. It’s all about reputation.

A new study has found that a company’s reputation has become a major factor in engaging and retaining an audit firm. Company misconduct that results in a public scandal and negative media coverage often involves brand damage, investor concern, litigation, even consumer boycotts. Researchers at University of Colorado Denver, Bentley University, and Northeastern University found that when a company suffers negative media coverage the damage often spills over and lands on the shoulders of financial auditors as well.

As reported in CU Denver Today, the researchers used a new dataset called RepRisk and examined auditor response to negative media coverage related to Environmental, Social and Governance (ESG) scandals.

Negative media was defined as coverage that exposes misconduct or is critical of a

n BY COREY FISCHER, CPA

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company’s ESG practices. Examples included such things as overuse and wasting of resources (environment issue); impacts on communities, social discrimination, and child labor (social issues); corruption and bribery, and anti-competitive practices (governance issues).

Researchers found that when a company moved from 25th to 75th percentile of negative media coverage, it resulted in a 19.5% increase in likelihood of auditor resignations and 4.68% increase in audit fees.

Public companies have always been selective in choosing an audit firm, and rightly so. When an audit firm fails or suffers reputational damage, the company is damaged as well. It may involve restatement of financials and loss of investor confidence. Companies, however, have tools to easily check the performance and reputation of an audit firm thanks to the Public Company Accounting Oversight Board (PCAOB).

The PCAOB was created as a privatesector, nonprofit corporation by the Public Company Accounting Reform and Investor Protection Act, commonly known as Sarbanes Oxley for short, or just SOX for even shorter.

Don’t let the “private-sector, nonprofit” description fool you into thinking the PCAOB is some warm and fuzzy group with a Facebook page. Well actually they do have a Facebook page, but they also have very sharp teeth.

If this sounds a lot like the SEC, it should.

The PCAOB is governed by a five member board that is appointed by the SEC. Its annual budget is approved by the SEC. It is headquartered in Washington D.C. just like the SEC, and it has about 800 employees.

The PCAOB has four major functions overseeing audit firms: 1) registration, 2) inspection, 3) standard-setting and 4) enforcement. It is the inspection function

that offers an important tool for companies to check the performance and reputation of audit firms.

The inspection process involves a team of PCAOB auditors spending several days thoroughly examining the working papers of selected audits done by an audit firm. Think of it as auditors getting audited.

Upon completion, a report is generated that will cite any insufficiencies found. More serious violations may institute an enforcement action, loss of license, and worse. Due to the PCAOB posting all inspection reports online, it is an important tool that companies can use to periodically review the inspection records of their current audit firm, and one they should use as part of their due diligence prior to an audit engagement.

The research points out how client misbehavior can adversely affect their audit firms.

Unfortunately there is no easy tool for audit firms to assess whether a client company will become embroiled in a negative media episode, especially when it comes to the brave new world of ESGs. The reputations of companies and their audit firms have become ever so entwined.

Media coverage can provide needed and deserved exposure to misdeeds.

Too often, unfortunately, that coverage provides more heat than light, and serves as no more than an accelerant. n Corey Fischer, CPA, is Firm Managing Partner of Weinberg & Company, a multi-office, PCAOB and CPAB-Registered firm specializing in the audit, assurance and tax needs of micro and small cap companies.

He has more than 25 years of experience, having worked with the Big 4 accounting firms, and as an SEC reporting officer for a number of NASDAQ-listed companies. Based in Los Angeles, he is an expert in financial reporting, SEC compliance, raising debt and equity, mergers and acquisitions and structuring accounting operations.

E-mail: coreyf@weinbergla.com or 310-601-2200.

Visit www.weinbergla.com

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MicroCap Review Magazine

69

TsX: sii

RESOURCE CORNER

Mining Industry 2019 Majors Divesting Non-Core Projects and Pay Attention to Silver – Q&A with Rick Rule, Sprott U.S. Holdings Inc.

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n this Wall Street View, our host caught up with Rick Rule, President and CEO of Sprott U.S. Holdings Inc. at the Sprott Natural Resource Symposium 2019 in Vancouver, BC. Robert Kraft and Rick Rule discuss how major mining companies are divesting in non-core projects and why investors should pay attention to silver.

This is an excerpt of the interview, and we invite you to watch the full interview on our YouTube channel: www.Youtube.com/ SNNwire

n ROBERT KRAFT, MBA

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n RICK RULE

SPROTT U.S. HOLDINGS

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Robert Kraft: So we last had you on, I think was about September 2018 and the title of that interview was “What is Rick Rule doing with his money for the next 12 months?” So, let’s get a recap on that - how did you do?

Rick Rule: Well, it’s been very difficult in the last 12 months not to make money in natural resource-based businesses. You’ll recall at that point in time the oil price was about $45 a barrel, now its $65 a barrel, a $20 a barrel increase in the oil price from a low level does wonders for the oil stocks.

They’ve done well, the gold stocks have done well, the whole resource complex has done well, so I’ve done well, maybe not necessarily as a consequence with my stock picking, but rather because I’ve had the wind in my sails.

I was interested in a few principal themes with regards to that. One was mergers and acquisitions which have continued. At that point in time, you probably wanted to buy the companies that were going to be taken over for good near-term gains and we’ve enjoyed some of those. Atlantic Gold being a sterling example. What’s happening now however, is that as the first rounds of acquisitions by the majors are being digested, those majors are beginning to sell projects which are distal to their core value thesis, that can be picked up by other people and brought forward. We went through this in the decade of the 90s. Great entrepreneurs like Bob Quartermain with Silver Standard, Ross Beaty with Pan American Silver, Ross Beaty again with Lumina Copper, bought projects that were castoff by the majors and built multi-billion dollar businesses.

So in what is changing a little bit right now, is that in addition to focusing on companies that are going to be taken over, I’m going to focus on the companies that have the ability to buy castoff projects and beneficiate them.

The second thing that we focused on were the royaltiey in the streaming companies.

The best of the best businesses in natural resources and they’ve of course merely gone from strength-to-strength.

The third thing I’ve looked at was exploration, and the exploration stocks haven’t done particularly well. They’ve done as well as the market per se, which is to say that they have done okay, but they traditionally move late in the cycle. So we think that’s the cheapest sector in front of us. We think that that sector probably begins to catch fire 12 to 18 months from now.

Robert Kraft: So I want to hit on the first point that you were talking about how that some of these great entrepreneurs out there are now looking at some of the castoffs from these majors. What’s been the reasoning behind that? Are they just trying to really focus on their core business and letting some of the better entrepreneurs out there develop these projects?

Rick Rule: I think the answer to that is yes. The truth is that the major mining companies made enormous mistakes in mergers and acquisitions at the beginning of the last decade. The management teams who did that were thanked and excused; allowed to pursue other employment opportunities and at least so far in this bull market, the senior managers of the major mining companies

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are sticking closer to their knitting. There are circumstances where there are assets that could be beneficiated, but they aren’t core to the company’s focus. as a consequence of that, they are sold off to reduce the cost of acquiring the better assets, 1 million or 1.5 million ounce deposit may be of no consequence to Barrack or Newmont, but it could be of enormous consequence to a $20 million or $30 million vehicle started up by one of these serially successful mine builders.

So this is a circumstance that’s unusual.

It benefits everybody. There is no loser.

The major mining company doesn’t distract their focus. They raise cash for an asset that won’t be developed under their stewardship for 10 years. At the same time, a more nimble team that is better at extracting value out of smaller assets has the opportunity to generate shareholder value where none was apparent before.

It’s important that your listeners understand the potential upside of this, a big major now, Goldcorp was formed as Wheaton River 20 years ago to do precisely this: buy assets that were castoff by major mining companies and beneficiate them. Pan American Silver, the same thing, Ross Beaty took that stock from $0.10 a share to $45 a share, building the second largest silver mining company in the world by making something out of other people’s assets. Silver Standard, Bob Quartermain grew it from $0.72 cents to $45 with the sam, business plan. nit isn’t just precious metals. Ross Beaty again did this with Lumina Copper, taking the stock from an initial financing of $0.50- to if my memory serves me well, seven dispositions totaling over $160 per share.

Robert Kraft: Speaking of silver, I’ve spoken with a number of companies and experts on gold and what’s going on in the space.

But little has been really paid attention to silver. Can you comment on this asset class?

Where are we at in the cycle for silver?

Rick Rule: For the speculators among your listener, silver always holds a special fascination. Historically, when the gold prices move, the silver prices lagged. But then

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the silver price outpaces the gold price. Silver is ubiquitous, but silver stocks, particularly good silver stocks are rare. when silver genuinely begins to move, the momentum money that piles into the silver stocks, Doug Casey once described it as attempting to siphon Hoover Dam through a garden hose. The move and particularly the best silver stocks early in the moves are truly spectacular.

Silver hasn’t moved. The silver stocks haven’t really moved. If the last four bull markets of my career are any indication, when the better quality silver stocks begin to move, those moves are truly ones for the record books.

At age 66 I look forward to this.

Robert Kraft: What would you say then is the potential of the Black Swan event?

In other words, what is the next event, the seismic event that you will see and you’ll start to see thess (gold prices) climb up?

Rick Rule: What’s lovely about natural resource-based businesses is you don’t need a Black Swan event. These businesses are very, very predictable. They’re cyclical.

Bear markets are the authors of bull markets. the bear market that we’ve been through is truly one for the record books. The TSX-V resource index off by 88% in nominal terms, the stage has been set.

The second thing is that these moves are so extraordinary that you don’t need to buy the most marginal names, the riskiest names.

The biggest and best companies in the world move 300% and 400%. At the beginning of a bull market buy the best, not the rest.

The third thing thas it’s critical that your listeners understand this. People add value to resources. Buy management teams that have been serially successful. Yes, you’re going to miss a new guy or a new gal who hits a long ball home run, but statistically that doesn’t matter. The people who have been successful in the past are going to be successful again.

So to recap, bull markets follow bear markets. We had a great bear market. We’re going to have a really good bull market. Buy the best, not the rest. And with people, buy the best too.

Robert Kraft: For the next six months what are some things that our audience should look for?

Rick Rule: In the very near term, the gold and silver stocks have run pretty far, pretty fast. My suspicion is that they need to consolidate. Don’t get shaken out of this market.

You are very, very early on. People say, well, gold’s already moved. It moved from 1200 to 1400. The last time we had a setup like we have now, a bull market following a long bear market was in the year 2000. the gold price moved over 10 years from $250 an ounce to $1,900 an ounce. The truth is that it’s going to growd fits and starts. Don’t get shaken out in the fits, hang on for the starts.

Think about this. The most important determinant, at least from my point of view with regards to the gold price, not the gold price stock, but the gold price is faith in the purchasing power of the U.S. dollar. I would suggest and I think that your listeners could verify if they thought that the real strength in the U.S. dollar in the last 10 years hasn’t been truly the strength of the U.S. economy.

It’s been the weakness of other economies.

Gold has been doing well in foreign currency terms for two years, now it’s doing well even in the face of a strong U.S. dollar.

If the U.S. dollar begins to roll over like it did in 2000 then you’ll see gold truly turn on its afterburners.nyou don’t have to believe that gold is going to supplant the U.S. dollar. Those old gold bug arguments, gold just needs to lose the war less badly which is in the process of doing. n For more information about Rick Rule and Sprott U.S. Holdings, please visit: www.sprottglobal.com Note:: This article is informational in nature and should not be construed as providing individualized investment advice. Investors are advised to conduct their own research and due diligence or seek the advice of a registered investment professional. Both the Author and Ridgewood Investments disclaim any liability from the use or misuse of this information.

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nasdaQ cm: sRaX

D ATA C O R N E R

What’s Your Privacy Worth?

Pioneering a premier consumer and commercial solution for the new data economy

E

verything we do online creates data. Every purchase we make, every video we watch, every friend we interact with on social

media, and every link we click on.

Chris Miglino, CEO

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Service providers, devices, and apps track that information carefully because they know it’s valuable. Data brokers deal in this mined data. They use it to create a digital profile of you, and that profile becomes a targetable and incredibly profitable entity.

Companies want to know specific details about each of us: our income, what property we own, what car we drive, our marital status, our movie preferences, what we’re allergic to, and so much more. And with the new data economy in place, that information is all attainable and valuable for the right price.

The massive amount of data our society produces fuels an industry that is worth more than $200 billion. Sure, Google and Facebook collect this data and sell it. But data brokers like Oracle and Axciom are the power players: they possess billions of profiles on consumers around the world and sell it to anyone that will buy it. This information is often personal and sensitive, and it’s only becoming more so. The specificity and volume of data is now accelerated by the growing popularity of the Internet of Things (IoT) devices. Your Apple Watch tracks your physical activity and vital organ health, while your Amazon Alexa listens in on your daily

conversations. As the number of “things” become more instrumented, interconnected, and intelligent, data will grow exponentially.

And in spite of that exponential growth, no major solutions to the problem have gained traction. According to Pew Research, 91% of Americans “agree” or “strongly agree” that people have lost control over how personal information is collected and used.

Seventy-five percent of people believe that data sharing benefits enterprises more than consumers. That fact may seem obvious, but it’s important to acknowledge the widespread awareness and acceptance of the problem. People know full well that these companies are benefiting immensely from data sales. And even more people, 84% to be exact, want more control over the information captured and used by these enterprises.

But since consumers feel helpless in the face of massive companies, nothing has changed yet. Our lives are mined for information, exchanged into value, and we don’t have any control of this exchange. Most of us feel like our data is already out there, so what’s the point? It’s too late. There’s nothing to do but sit idly by while these companies make their money. And on the other hand, digital

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Seventy-five percent of people believe that data sharing benefits enterprises more than consumers.

That fact may seem obvious, but it’s important to acknowledge the widespread awareness and acceptance of the problem. People know full well that these companies are benefiting immensely from data sales. And even more people, 84% to be exact, want more control over the information captured and used by these enterprises.

marketers are engaging in an essentially unethical practice. They’re blindly enabling the data brokers to create a non-consensual human rights violation.

In the European Union, a law entitled The General Data Protection Regulation (GDPR) was passed into law in 2018. It’s the most comprehensive and far-reaching data privacy regulation ever passed, and it gives consumers an unprecedented level of control. Every business that collects data must take measures to ensure that information isn’t made publicly available without explicit, informed consent. And the provider of that data has the right to revoke this consent at any time. Consumers also have the right to request a portable copy of the data, and the right to have their data erased. U.S. Congress has yet to pass a federal regulation protecting its citizens in this way. They’ve left the task of securing data to the individual, and left major corporations mostly unregulated in this way. The Federal Trade Commission has stepped up recently to hold Facebook’s feet to the fire by fining them $5 Billion for privacy violations, and that’s certainly necessary. But these incidents will continue to matriculate unless a strong, federal law is passed. That’s ultimately the goal for data privacy advocates far and near. But it goes without saying that the legislative process is

slow. In the meantime, it’s time to give power to the consumer. One thing we can do is start a movement to show legislators just how crucial and powerful data ownership really is.

Your data is yours, so you should be able to control it in one centralized location. That’s what the BIGtoken app aims to be. Your place to integrate all of the data points you create online to create a verified personal profile. And since your data is your property, you should be empowered to sell it if you so please. Our parent company SRAX has been in the data sales business for ten years. We’re here to function as the intermediary between you and advertisers. Our technology can collect and anonymize your data before selling it to advertisers. It’s the same ecosystem, but now you’re involved and you get paid for it too. You decide which advertisers can use your information, and you which data is even available for targeting in the first place.

For advertisers, we’re providing verified and opted-in data. Consumers voluntarily provide information, feeding the ecosystem with accurate information. Advertisers can deliver more accurately-targeted campaigns, so consumers see products and services that are more relevant to their needs. And consumers are compensated for their role as providers in the first place, so the exchange is consensual and mutually beneficial. It’s a

win-win situation through and through. To learn more about BIGtoken, visit https:// bigtoken.com. n

About Christopher Miglino Christopher Miglino is CEO and Founder of SRAX. He has spent the past 20 years working in the digital advertising space and has successfully launched and sold two internet companies. Both of these companies were sold to publicly-traded companies on the NASDAQ. He has a detailed understanding of how technology interacts with brands.

About SRAX SRAX (NASDAQ: SRAX) is a digital marketing and consumer data management technology company.

SRAX’s technology unlocks data to reveal brands core consumers and their characteristics across marketing channels. Monetizing its data sets, SRAX is growing multiple recurring revenue streams through its various platforms. Through the BIGtoken platform, SRAX has developed a consumer-managed data marketplace where people can own and earn from their data thereby providing everyone in the Internet ecosystem choice, transparency, and compensation.

SRAX’s tools deliver a digital competitive advantage for brands in the CPG, automotive, investor relations, luxury, and lifestyle verticals by integrating all aspects of the advertising experience, including verified consumer participation, into one platform. For more information on SRAX, visit https://srax.com/.

Contact Kirsten Chapman LHA Investor Relations srax@lhai.com 415-433-3777 This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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F E AT U R E D A R T I C L E

Awesome Aussies “The Upside to Down Under Stocks”

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here are certain things that Americans just don’t seem to get about their mates from Down Under, like vegemite ( I mean, who else but an Aussie would eat that stuff?), AFL or Aussie Rules Football (no it’s not soccer, rugby or gridiron), and small cap companies with billions of shares on issue (it can’t be any good if it’s trading below $5 a share or can it?). The psychology of the Australian share market is different from the US and why is that? Maybe it’s because we come from a long line of convicts and gamblers, and there is something very satisfying about pulling off a ten or twenty bagger; maybe it’s because we focus more on market capitalization than share prices. I am often bemused when I speak to US investors and broker/ dealers, they can rattle off share prices till the cows come home but no one seems to know how many shares are on issue and therefore what the market value of the company is. It

is always an equation of shares times price.

The Australian Securities Exchange (“ASX”) has a daily turnover of around $4.7 billion and a market capitalization of $1.5 trillion- it has over 2,600 listed companies.

There are 6.7 million Australian share owners , which might not sound like a lot, but with a population of only 24.6 million represents a ratio of just over 27% of every man, woman, gender neutral person and child in the country, making Australia one of the highest, if not the highest, share owners per capita in the world. Again, this is somewhat idiosyncratic to the Australian environment.

Most professionals and semi-professionals set up their own “self-managed” personal pension plans (or Superannuation Funds as we call them) rather than entrust their retirement savings to government or industry run pension plans, which fundamentally just track the index. It is also in the Aussie DNA to be a bit of a gambler or punter (as

n BY RICHARD REVELINS

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Dual listing is not a magical solution. If the company’s prospects are limited and the management are poor marketers in their own jurisdiction the chances are, they will be poor marketers in the foreign jurisdiction. we would say), and a little maverick element that doesn’t like the idea of “Big Brother” making our investment decisions for us.

In the US there is a negative perception and strong blue sky, and securities laws restrictions to ward investors away from investing in what are often referred to as “penny stocks” … in Australia we bloody love ‘em! We like to get our hands on as many 1 cent or 0.1 cent shares (even better) in well managed prospective, earlier stage companies as we can and strap ourselves in for the ride. Although the calculation and market capitalization fundamentals may be the same, it is a lot easier to get a 1 cent stock to 10 cents than a $1 stock to $10. Certainly, a lot of this has to do with the underlying risks and stage of development of a company but this is where the 10, 20 and 50 “baggers” live. Another difference is Aussies tend to go public at a much earlier stage than their US cousins. This is partially to do with more restricted and less sophisticated private equity markets as well as possibly a higher risk tolerance by Aussie investors. By the time most companies in the US consider going public, the companies are substantially larger, have completed development and are usually cash flow positive. The big gains have already been locked in by the founders, as well as the original private and institutional investors who initially backed the company.

The ASX allows investors access to investment opportunities at a much earlier phase of the development cycle and respectively the ability to emulate similar returns to those enjoyed by a privileged group of founders and institutions in the US.

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Reading the above it might seem like Australia is the wild west, however nothing could be further from the truth. The ASX is highly regulated and has some of the strongest rules and controls in the world. Australia was one of the first countries to adopt continuous disclosure regulations which are enshrined in the ASX Listing Rules and I would venture to say that Australian offering documents and prospectuses are far more useful and user-friendly materials than US offering documents. There are specific guidelines and regulations ensuring prospectus documents are clear and concise so that the important information, particularly investment risks, are prominently displayed upfront rather than buried in volumes of paper which no sane person would ever consider reading.

Over recent years there are more and more ASX listed companies setting up operations in the US or operating in sectors which have direct relevance to US and international markets. Many of these entities have elected to dual list their securities in the US including the NYSE, NASDAQ and OTCQX/OTCQB. This not only gives ASX listed companies access to the largest capital market in the world, but also enables US investors to gain access to smaller cap, and earlier stage investment opportunities without the burden of having to establish banking and broking relationships in Australia, which most investors find overly onerous.

Once an ASX company is dual listed, all announcements made to the ASX are at the same time made available for the US market.

This ensures complete transparency between both markets.

Dual listing is not a magical solution. If the company’s prospects are limited and the management are poor marketers in their own jurisdiction the chances are, they will be poor marketers in the foreign jurisdiction. Dual listing also requires an ongoing commitment to expend effort, time, and resources in the US and form relationships with quality news and investor relations groups so there is always a presence on the ground in the right time-zone.

So why should US investors want to buy Aussie based shares? Aussie companies, particularly the ones that are dual listed in the US, offer the opportunity to invest at a much earlier stage than their US counterparts.

Depending on an investors’ risk tolerance, this can result in far greater returns than investing in more mature, established companies. The ASX is a highly regulated world class stock exchange so investors are able to rely on the announcements and financial information contained therein. Of course, Australia has its share of multi-billion-dollar market cap companies but also a very large concentration of well managed microcap companies which offer a hugely diverse range of investment opportunities. As an investor, it is all the easier if you can trade these stocks electronically directly from the US through dual listed ASX companies. n Richard Revelins has worked as an international investment banker for over 30 years and specializes in listed public companies. He is a co-founder of Peregrine Corporate Limited based in Australia and is also a Managing Director at Cappello Group Limited based in Los Angeles, USA. He currently resides in Venice, California and divides his time between the US and Australia.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

MicroCap Review Magazine

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GA MI N G COR NER

Coloring Apps and Match-3 Games; Taking Mobile Apps to New Levels coloRing apps Despite the highly competitive landscape of mobile gaming, colouring apps have taken a disruptive approach by innovating a traditional yet timeless experience, while also targeting an underserved group of users. The purpose of this overview is to highlight the industry and more specifically, understand the level of competition that is faced by the companies operating within this niche.

Middle-aged women with college degrees are the predominant target market for colouring apps. These types of apps can be deemed as high potential because female gamers are mainly underserved. While most gaming apps focus on traditional male interests such as action or adventure, relatively fewer accommodate the needs and interests of women.

We estimate that the Coloring App market is in the $90-100M range in size. The key players in the colouring app segment include Kuuhubb (Recolor), TFG (Colorfy), AppsX (Unicorn) and Pixite (Pigment). The major-

ity of the companies analyzed compete on a pricing basis. There was a wider variation when it came to the prices of the upgrades.

From a quality perspective, there was less differentiation. The drivers of value were simply different shades of colour, as well as level of convenience and community engagement on social media. Leading apps such as Colorfy or Recolor have developed a strong moat through a first-mover advantage and scale grown over time.

maTcH-3 gamEs Match-3 games, also known as tile-match games are a type of video game puzzle. The primary objective is to meet a certain criterion that enables the tiles to disappear. They operate on both Android and iOS platforms.

A particular trend that should be noted,

however, is the growing presence of women in mobile gaming. Exhibit 2 shows that 69% of Match-3 players are female, higher than any other genre. Some companies have taken note of this demand. Candy Crush Saga adopted bright, colourful aesthetics and a gender-neutral theme to effectively appeal to women and ultimately increase sales at staggering amounts.

Unlike coloring apps, Match-3 games is a multi-billion dollar market. Key players include King (Candy Crush), Playrix (Township, Gardenscapes), Jam City (Cookie Jam), and Rovio (Angry Birds).

There has been some recent consolidation in the segment with Playtika acquiring Seriously Digital Entertainment Oy (the publisher of the Best Friends mobile game) for ~US$275M, and Zynga acquiring Small Giant Games Oy for ~US$650M. Seriously and Small Giant are Helsinki-based and

Exhibit 1 – Affordability vs. Value Positioning Map n BY RALPH GARCEA, P.ENG, MBA

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Source: FMG Estimates; “Quality” refers to quality of images, User Interface (UI), and coloring experience

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Exhibit 3 – Key Players in the Match-3 Segment Company

Exhibit 2 – % of Gamers Who Are Female

by Genre

Notable Apps

Apps Monthly Downloads (M)

Apps Monthly Revs ($M)

Candy Crush Saga Bubble Witch Saga Pet Rescue Saga

20.9

$98.6

Township Homescapes Gardenscapes Fishdom

30.1

$96.5

Toon Blast Toy Blast Lost Jewels Lost Bubble

2.4

$34.1

Cookie Jam Genies and Gems Juice Jam

1.5

$10.2

Angry Birds Pop! Angry Birds Match Angry Birds Blast Fruit Nibblers

1.4

$6.0

Coming Soon

Coming Soon

Source: HubSpot

share similar Match-3 strategies as Kuuhubb, building their own Match-3 engines and changing the meta-game layers.

Considering how many games there are these days in the app stores, it’s worth noting that only 20 games have made it to the so called “Billion Dollar Club” (games with lifetime revenues exceeding $1 billion).

According to PocketGamer (list) there are three Match-3 games: Disney Tsum Tsum (Casual, Japanese markets), Candy Crush Saga (Casual, Worldwide) and Puzzle & Dragons (Midcore RPG, Japanese markets).

However, we believe Playrix’s Gardenscapes should be in the list too, which according to a Gamesindustry.biz article, Gardenscapes had made $880M by October 2018. The article is about a year old and the game has been steadily grossing $30M/month, which would make it a fourth Match-3 game that has grossed over $1B lifetime (we estimate that Homescapes is pretty close to the $1B level also).

Valuation We note that KUU is trading at a significant discount to its peers - both Global/Nordic gaming and global social apps. Global and Nordic gaming apps are trading at 2019 EV/Sales of 5.0x/3.0x – valuing KUU in the C$0.75-1.25 range. Comparable global social apps are trading on average (excl. FB) at a

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Dancing Diaries Tiles & Tales

Source: Sensor Tower July 2019

Exhibit 4 – Global Social Media Apps Valuation using MAU Source: Factset, Consensus Estimates (as of August 27/19)

multiple of US$67/MAU – valuing KUU in the C$4-5 range. n About the Author Mr. Garcea co-founded Focus Merchant Group in September 2018 and has more than 23 years experience in senior analyst positions at major domestic and international firms. He was a top-ranked research analyst, well regarded for the depth and breadth of knowledge he brings to bear on his coverage of technology, gaming, and industrial companies across a broad range of market capitalizations. Over

the years, he has received top three rankings from Brendan Woods, Greenwich, Starmine and Thomson Reuters surveys. One of Mr. Garcea’s consulting clients currently is Kuuhubb Inc. (KUU-TSXV).

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Ralph Garcea does not own shares of Kuuhubb Inc.

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TsX-v: kuu / pink: BcdmF

P R O F I L E D C O M PA N Y

kuuhubb inc.

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Jouni Keränen, CEO

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uuhubb is a publicly listed company focusing on mobile games and esports. Our mobile game development and publishing division is targeting the female audience with bespoke mobile experiences. Kuuhubb´s esports is engaging with a rapidly growing audience of esports enthusiasts through omnichannel networks.

Our mission is to become a top player in women’s mobile gaming, while building a leading global esports ecosystem.

Kuuhubb´s vision is to create games and apps that will have our female audience relax, express and entertain themselves every day. Through our games, we explore new lifestyle trends that can be converted into games and apps. In addition, Kuuhubb offers global esports fans an unforgettable world-class esports experience through social media, TV and events with its Tier one team – Cr4zy.

gloBal gaming know-How Kuuhubb has an international team of 70+ professionals in the fields of management, finance, business development, user acquisition, publishing, production, game development, game art, illustration, customer service, and live operations. Kuuhubb is led by co-founder and CEO Jouni Keränen, a Finn fluent in Mandarin Chinese and over 18 years of international game and app industry experience, with particular in-depth knowledge of the online games industry and market in China and elsewhere in Asia - which are areas of focus for KuuHubb in its business plans going forward.

uniQuE gRowTH sTRaTEgy wiTH a sTRong poRTFolio Discover, acquire, develop, integrate, grow

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user base, monetize, and partner with us.

KuuHubb’s growth strategy enables the company to find the next billion dollar hit game or app. A return to robust revenue growth led by Recolor, MyHospital, and upcoming new product launches – with titles including: Recolor by Numbers, Incolour, Dancing Diaries, and Tiles & Tales.

In recent years, the mobile gaming market has seen the rise of colouring apps. The rationale for these apps is that they provide the same sense of stress-relief and relaxation as their physical book counterparts, but in an easily accessible fashion. We estimate the market size to be in the $90-100M range, with the key players including Kuuhubb (Recolor), TFG (Colorfy), AppsX (Unicorn) and Pixite (Pigment).

Match-3 games, also known as tile-match games, are a type of video game puzzle.

The primary objective is to meet a certain criterion that enables the tiles to disappear.

Unlike the coloring app segment, Match-3 is a multi-billion dollar market.

Key players include King (Candy Crush), Playrix (Gardenscapes), Jam City (Cookie Jam), and Rovio (Angry Birds).

Are you Cr4zy for eSports?

In addition, Kuuhubb has invested in a Counter-Strike: Global Offensive (CS:GO) esports franchise called Cr4zy (@gocr4zy). esports is a high growth, high barrier to entry industry. Over US$4.5B was invested through ~ 70 deals in 2018. According to PitchBook, a handful of startups have already raised a total of $65 million in VC backing this year, including a $10.8 million financing for ReKTGlobal, a provider of esports infrastructure services. The essential value of the eSports industry is the core demographics – including a global fan base of ~380M in 2018, with 37% males aged 21 to 35, and 16% females aged 21 to 35.

There is a handful of established esports brands and those are well funded or coowned by athletes, billionaires or celebrities.

Of the US$234M in investments made to team organizations in the last two years, over 50% has gone to the top 10, and are reaching 14x revenue valuations.

Cr4zy at a glance: Significant portion of team valuations are based on world ranking. Cr4zy has hit the Top #14 out of 700+ CS:GO teams in the world. Participated in 75 esport tournaments in 2018-19 • UML League Champion, Dreamhack runner-up • 2019 CS:GO Major participant in Berlin; Cr4zy has qualified to the Legends stage through the Challengers stage (guaranteeing a Top 16 finish)

• Media reach of 1.5M+ followers; combiningnorganizations, players and our influencer content creators • 400K+ hours of produced content watched by our fans and followers. n www.kuuhubb.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement.

Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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MicroCap Review Magazine

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asX: knm / oTcQB: knEoF

P R O F I L E D C O M PA N Y

kneomedia limited

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James Kellett, Executive Chairman

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neoMedia Limited (ASX: KNM, OTCQB: KNEOF) is a world class publisher of online education and learning programs for students of all academic abilities. Delivering though their SaaS education portal, KneoWorld.com, their program of Story-based Lessons and Education Games are making a significant impact to help bridge the achievement gap across many socio-economic groups in both general ed and special needs school settings.

The evidenced-based programs are globally recognized and educator validated and with the commencement of the current US school year, KNM has already announced the sale of approximately 9,500 new seat licenses in the past two months in the US alone ( New York City and Florida) ; as well as its first significant license seat sales in the United Kingdom. In early September KNM announced a 500 seat license order to Florida A & M University Development Research School, which potentially paves the way for a statewide rollout. In a subsequent announcement dated September 17, KNM announced a 2,000 seat license to “general education schools” in the Borough of New York City. This system encompasses 1.25 million students in 2,300 schools in NYC’s 5 Boroughs alone. US-wide there are approximately 23 million elementary students who can potential participate and benefit from KneoWorld’s “Connect All Kids” education program pioneered by the National Association for the Advancement of Colored People (“NAACP”), Dell Technologies and KneoWorld. With the initial acceptance of the KneoWorld program into the general education space, this creates further market opportunities for seat licenses into the general education sector.

The Company has operations in 4 continents, principally in the US, has successfully developed a sophisticated program of custom-

ized story- based lessons and education games that are highly engaging and provide students with new ways to practice and master key concepts and skills. The programs are sold on a Business-to-Schools basis via a per Seat License, with each Seat typically selling for US$50.00 for each student for a 12-mnoth period.

The Company has three revenue streams:1.“the Connect all Kids” education initiative with the National Association for the Advancement of Colored People (NAACP), Dell Technologies, and KneoWorld which is now generating sales in New York City 2.

State, District or County-wide deployments funded typically by education departments 3. Direct-to-school sales where the technology is sold on a school-by-school basis.

KNM recently had its shares approved for trading on the OTCQB market under the stock ticker: KNEOF. n Please visit the company’s website for more information: www.kneomedia.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

SNN did not receive any compensation for the publication of this profile.

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MicroCap Review Magazine

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FEATURED ARTICLE

A Case Study

Using SEC Filing Information Arbitrage to Protect Your Portfolio

M

icrocap companies are going to start reporting third quarter earnings soon. Earnings season is a great time for investors, especially beginners, to use Information Arbitrage (InfoArb) to profit or avoid loss. Even though I consider myself to be more of longer-term investor, I don’t mind putting on short-term trades when I come across stocks that are going up or down based on misinformation. During the 2019 second quarter earnings period, I wrote a case study highlighting $OESX and how beginner investors could have earned swing trading profits by exploiting information gaps between the company’s earnings, press releases, and related conference calls.

In this article, I’m going to talk about how traders could have used SEC Filing InfoArb during the 2019 second quarter earnings season to avoid entering into a suboptimal short-term swing trade and how longer-term investors could have also gained insight into the neat-term growth prospects of the target company.

TaRgET company – TayloR dEvicEs $TAYD Is a company that we have followed for a long time. Overall, the stock has been good to us on two occasions…

n BY MAJ SOUEIDAN

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• Shares rose as much as 75% within a year after a Call to Action Alert was issued to GeoInvesting Premium Members in September 2011. See more about Call to Actions here.

• Shares rose as much as 36% within a year after a Call to Action Alert was issued to GeoInvesting Premium Members in October 2015.

…which is why we continue to monitor TAYD. The company manufactures and sells industrial structural devices to protect buildings and equipment from environmental elements.

“The Company was incorporated in the State of New York on July 22, 1955 and is engaged in the design, development, manufacture, and marketing of shock absorption, rate control, and energy storage devices for use in various types of machinery, equipment, and structures. In addition to manufacturing and selling existing product lines, the Company continues to develop new and advanced technology products. The Company manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of eight categories: • Seismic Dampers - Designed to mitigate the effects of earthquake tremors on structures, and represent a substantial part of the business of the Company • Fluidicshoks® - Small, extremely compact shock absorbers for primary use in the defense, aerospace, and commercial industry.

• Crane and Industrial Buffers - larger versions of the Fluidicshoks® for industrial application on cranes, ships, container ships, railroad cars, truck docks, ladle and ingot cars, ore trolleys, and car stops.

• Self-Adjusting Shock Absorbers Automatically adjust to different impact conditions, and are designed for high cycle application primarily in heavy industry.

• Liquid Die Springs - Component parts

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Sales:

• An EPS increase of 462% to $0.73 So, the year numbers looked great, but we still wanted to know how the company fared for its fourth quarter. Quarterly SEC filings will highlight a company’s income statement for the current quarter, as well as cumulatively. For example, a third quarter filing will show the income statement for the third quarter and nine months. But 10Ks, which summarize annual financial results, will normally not break out the fourth quarter.

In order to calculate Q4 financial results we subtracted the company’s 2019 ninemonth sales and EPS from its year end numbers which also yielded impressive results:

EPS:

• Sales Increased 41% to $9.0 million • EPS Increased 600% to $0.28

of machinery and equipment used in the manufacture of tools and dies • Vibration Dampers - Used primarily by the aerospace and defense industries to control the response of electronics and optical systems subjected to air, ship, or spacecraft vibration • Machined Springs and Custom Actuators - Used primarily for aerospace applications that require custom features that are not possible with conventional wound coil springs. These actuators are used for special military and aerospace applications.”

However, one of the issues investors have to contend with is that the company’s annual/quarterly revenue and EPS performance can be lumpy.

Furthermore, depending on the backlog mix, margins can be quite volatile.

The TAYD case study is very simple.

Because we are familiar with the company, we know that the company often files its quarterly and annual financial reports with

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the SEC before it issues a related press release. This gives us time to read the filings before other investors who do not know this or who do not apply SEC filing analysis in their stock research process. (On a side note, I also like to keep a journal of companies that omit key information from quarterly earnings press releases.)

So for example, if the company reported great numbers, we might be able to buy some cheap stock ahead of the market.

This seemed to be the case when TAYD filed its FY 2019 10K, 12 minutes before the market closed on Friday, August 2, 2019, but issued no corresponding press release.

TAYD’s fiscal year ends in May 31. Here is the headline alert we saw: The stock closed the day up 40 cents to $10.98 Per the 10K, for the year ended May 31, 2019 TAYD reported: • A sales increase of 38% to $33.6 million

We almost jumped on the stock heading into the close. Our initial thought was to buy the stock before the related press release crossed the news wires. However, we knew that TAYD reports detailed backlog information in its SEC financial filings and wanted to glance over them. After continuing to read the 10K, we noticed that the yearend backlog numbers did not look too favorable.

Included in the filings: 2019 vs 2018 10K backlog verbiage: “At May 31, 2019, we had 153 open sales orders in our backlog with a total sales value is $13.3 million. $6.7 million of the current backlog is on Projects already in progress.”

“At May 31, 2018, we had 121 open sales orders in our backlog with a total sales value of $23.1 million. $8.8 million of the $23.1 million sales order backlog at May 31, 2018 was in progress at that date.”

So, my first moment of pause came when I noticed that the year over year May 31 backlog was substantially lower. However, I

Source: Reuters

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also wanted to know how the Q4 May 31, 2019 backlog compared sequentially to Q3, Q2 and Q1. After quickly heading over to the related quarterly filings I found that: At that end of Q3 the Company had a backlog of 120 open sales orders, with a total sales value of $15.9 million.

At that end of Q2 the Company had a backlog of 130 orders with a total sales value of $18.0 million.

At that end of Q1, the Company had a backlog 118 orders, with a total sales value of $22.6 million.

On the negative side, we had two things to consider. First, backlog has been consistently falling and second, the value of the backlog per order has been falling and, as of May 31 2019, experienced a steep decline.

Backlog

Orders

Value of each order

Q4 2019

$13.3M

153

$87K

Q3 2019

$15.9

120

$133K

Q2 2019

$18.0

130

$138K

Q1 2019

$22.6

118

$192K

Q4 2018

$23.1M

121

$190K

We obviously did not enter TAYD for a trade. The press release eventually hit at 4:23 PM, after the market closed on Friday.

Interestingly, it did not mention any backlog information, which was out of the norm for the company. The stock did eventually go on to reach $11.45 on Monday, perhaps buoyed by investors who did not read the 10K. However, shares never ran much past that price.

Our research, in the short term, was validated when TAYD reported fiscal Q1 2020 financial results on September 26, 2019: • Sales decreased 22% to $5.7 million • EPS decreased 53% to $0.10

“FY20 Q1 sales are down from last year’s level due primarily to a dip in sales to our aerospace/defense customers resulting from natural delivery cycle gaps in the production schedules of the mature platforms/products that we support,” stated Tim Sopko, CEO. He continued, “Our FY20 Q1 backlog of $18,300,00, which is up 38% from the $13,300,000 at the end of the prior year, includes recently received sales orders from our aerospace/defense customers that we expect to positively flatter future sales the remainder of this fiscal year.” He concluded, “Our focus on lean initiatives to reduce lead times while realizing efficiencies continues and is expected to help us achieve our goal of profitable growth this year.”

However, it failed to mention that the Q1 year over year backlog was down from $22.6 million.

“At August 31, 2018, the Company had 118 open sales orders in its backlog with a total sales value of $22.6 million. At August 31, 2019, the Company has slightly more open sales orders in its backlog (124 orders), and the total sales value is $18.3 million.”

On the positive side, even though the per unit value of orders of $148 thousand in the Q1 2020 backlog is less than Q1 2019 of $192 thousand, it’s up nicely, sequentially, from the last 3 quarters.

Also, management seems to be saying that it expects sales to rise for the remainder of the year.

So, since I have not spoken with them in several years, I might call management to learn more about what is going on at the company and how margins are faring.

I didn’t create this case study to put down TAYD. It was intended to make a point that traders, momentum investors, and longerterm investors should not take press releases at face value and that SEC filings should be part of your process for parsing out information. If you are not reading them, someone else out there is, gaining an investment edge over you. n

ABOUT MAJ SOUEIDAN I lead the GeoInvesting Team on a daily basis to increase build a healthy investment opportunity pipeline and heighten GeoInvesting’s awareness in the financial market. I stress the concept of “information arbitrage” in an era where information overload has actually made it more difficult for investors to locate profitable information. An arbitrage exists when a disconnect between stock prices and available public information on a company is noticeable, and monetarily worth pursuing. www.GeoInvesting.com Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Maj Soueidan does not own common shares of $TAYD, and owns a small position of common shares of $OESX.

Shares are still sitting around $11.00. This time, management did reference backlog in the related press release:

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EVER WONDER WHERE THE PEOPLE WITH ALL THE ANSWERS, GET ALL THE ANSWERS?

Ask MARCUM

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Give it Away - The Million You Never Made You Are a Product

S

ocial media websites, agencies and brands want more of your private data because you are their product.

In exchange for free access to websites (like social media), we provide (often voluntarily) details about who we are, where we are, apps we use, Internet pages we visit … You get the point. Companies collect your data and create a profile about you, which is packaged and resold by companies like Oracle.

These companies monetize your personal data and you get squat. Worse, we know that many companies aren’t good stewards of our personal information. Your data is circulating around the Internet and stored in data centers waiting to be hacked.

accounts and compromised the phone numbers of 500 million subscribers. These types of breaches are one catalyst that prompted the European Union to implement the General Data Protection Regulation (GDPR) regulation in May 2018 to protect the data and privacy of citizens. Any organization breaching GDPR can be fined up to the greater of 4% of annual global turnover or €20 million. These fines aren’t onerous for larger, non-compliant firms, leading us to believe that the bigger reason for GDPR is to inform consumers about how companies are collecting, using and monetizing their personal data.

TakE iT Back! consumER pRivacy is paRamounT, BuT knowing youR daTa’s woRTH is moRE impoRTanT

Although the U.S. doesn’t have a national law like GDPR, the California Consumer Privacy Act, (CCPA), which used GDPR

as its foundation and goes live on January 1, 2020, grants Californians the right, at any time, to direct a business not to sell the consumer’s personal information. Businesses cannot deny goods or services to consumers who have made such requests.

But the bigger problem for companies with U.S. operations is many states are in the process of enacting GDPR-like legislation, including: Alabama, Arizona, Colorado, Iowa, Louisiana, Nebraska, New York, Oregon, South Carolina, South Dakota, Vermont, and Virginia. An online survey published by TrustArc in March 2019 found only 14% of companies were CCPA compliant. With potentially 50 different data privacy regulations, companies operating in the U.S. that handle personal data are facing a logistical nightmare.

don’T woRRy BE Happy

Data breaches are a regular occurrence. The Yahoo! attack in 2013 impacted 3 billion user

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Companies are rightfully spooked about laws regarding personal data rights. Several firms stopped doing business in Europe because of GDPR including California’s Drawbridge, Factual and Verve, and we haven’t heard how these firms plan to comply with CCPA. Keep the Internet Free, an Internet Association project (see members here), has suggested that many free, advertising supported websites could start charging users because of CCPA. This may be a scare tactic to get consumers to back down from opting out of personal data monetization. Or, maybe they are scared and trying to get CCPA amendments because they know the Act will disrupt their businesses.

banks and even charities are using and/or selling personal data. What many people may not know is that many brands sell the data they collect to data aggregators known as “data brokers”.

Data brokers track and collect personal information from multiple sources to resell.

They collect your data from your online habits, location, surveys, loyalty programs, and even your public records. They then use this data to create profiles and sell lists of profiles that match the targeted markets of brands, so that brands know who to send advertisements.

All of this is legal and it’s a big business, currently worth $76 billion growing to an estimated $200 billion by 2022.

A Vermont law requiring data brokers to register with the State unveiled at least 121 industry players. Privately held Acxiom is one of the largest data brokers, and collects data from over 200 third-party sources that supply personal information.

Mining and Selling Your Personal Data

Your Data’s Worth to Digital Advertisers

Facebook and Google aren’t the only companies collecting and selling our personal data.

For example, CVS allows its pharmacy customers to earn up to $50 on prescription refills in exchange for waiving some health care privacy rights. Grocery store chains,

Our lives constantly change. Today, we’ll buy a new gadget online; tomorrow, we’ll search for a local plumber because a pipe burst at our rental home. This changes our value to data brokers because our changing lives introduce new data that appeals to new brands. More brand appeal means more money for both the data brokers and the websites getting paid by brands to advertise to us.

Data Makes Possible, by Western Digital, estimated the worth of personal data to brands by dividing the total U.S. digital advertising spending by the number of Americans accessing the Internet. The 2018 estimate was $341.08 per American. How

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much are you getting? We’d bet nothing.

The ONLY Way to Invest in Consumer Data Privacy Freckle (TSXV:FRKL), a Sophic Capital Client, is the only company that adheres to consumer data privacy regulations like CCPA and GDPR. Freckle accomplishes this through its Killi application, where users select what personal information they choose to monetize. Brands, platforms and companies pay users to complete surveys.

Users can change their privacy preferences at any time; more personal information results in more money earned, while less personal information translates to less money. This user control over personal data is effectively CCPA-compliant opt-in. Should the Killi user choose to forego future monetization of their data and delete the application, all personal data used by the app is also deleted.

This is the ONLY way to invest in consumer data privacy. n So stop giving your personal data away – download Killi and start making the million you never made from your personal data. www.sophiccapital.com Disclosures Sean Peasgood, Sophic Capital, and Sophic Capital’s employees own common shares of Freckle Ltd. Here is a link to Sophic Capital Disclosures and Disclaimers: http://sophiccapital.com/disclaimers/ Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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When To Sell D o you ever have difficulty knowing when to sell a stock? If you’re like most investors, you probably find it harder to sell than to buy. Resources abound on strategies and criteria for buying stocks, but what about selling? Are there strategies at all? ‘’Our favorite holding period is forever.’’

- Warren Buffett So Buffett never sells? He also states that if you are not comfortable owning a business for ten years, you shouldn’t own it for ten minutes. Essentially, what Buffett wants us to understand is that by buying high-quality companies only, an investor can patiently wait forever as they execute successfully and their value compounds.

Although I don’t intend to question Mr. Buffett’s teachings, I think it is necessary to make a distinction when it comes to microcaps.

Because microcaps are typically start-up companies or they operate in very specific market niches, their situation can change quickly, and you need to monitor them properly. ‘’ Small microcaps evolve in different ways, and a lot of the ways aren’t good ways.

You can’t buy and forget, you need to buy and verify, and the smaller the company the more often you verify.’’

- Ian Cassel, Buy And Verify

8 Reasons To Put A Stock Up For Sale

Several situations can arise where it is necessary to consider selling a stock. Here are the eight most common I’ve encountered over the years:

1. sEll To invEsT in a BETTER oppoRTuniTy Finding a better opportunity is my favorite reason to sell. When I look at my portfolio, I not only consider the quality of the companies that are part of it, but I also compare them with my watchlist (those I don’t own yet). Each stock in my portfolio competes with those on my watchlist and needs to deserve its place.

Sometimes I find new opportunities that are just too attractive not to include them in my portfolio. If I do not have enough cash available, I then have to sell the least attractive stock I own to make room for the newcomer.

2. sEll iF Financial REsulTs don’T mEET youR EXpEcTaTions When investing in a company, it is generally a good idea to estimate its intrinsic value first (at least if you are a proponent of fundamental analysis). This process implies estimating the future cash flows the company will be able to generate through its operations.

If a company delivers results that are below your expectations quarter after quarter, you must question your investment thesis. Are the prospects still as attractive as you originally thought they were? Is the risk/reward ratio still favorable?

3. sEll iF THE BalancE sHEET is Too Risky

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Sometimes you may invest in companies that are not profitable yet or that historically were,

but are currently experiencing difficulties. A company that doesn’t generate profits must have a solid balance sheet with enough cash to keep operating. It must be able to pay its employees and suppliers, but also to pay off its debt.

A company that doesn’t have enough cash to continue to operate for at least the next twelve months presents significant risks. It may have to raise additional capital through the issuance of new shares or debt. In both cases, it is hard to predict at what terms it will be able to raise these funds. In my experience, those who benefit most from these situations are the investors who come to the rescue of the distressed company, not the existing shareholders.

If the balance sheet presents a significant risk of refinancing, it can be wiser to sell and wait for the problem to be solved. The two main advantages are that you can judge whether you like the solution, and you can be part of the solution by reinvesting directly in the financing if you like the terms.

4. sEll iF THE naTuRE oF THE company cHangEs Sometimes you invest in a company because you see potential in the business model, a specific product or service, the CEO with a track record of success, or a host of other reasons.

And sometimes, things change drastically after that. The business model turns out to be a failure, and the company pivots to a new strategy. They sell the division in which you saw great promises. The successful CEO accepts a better job offer elsewhere. The company makes a major acquisition in a sector you don’t know well.

If the business changes and no longer fits your criteria, it might be time to move on.

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5. Sell If Management Is Dishonest Life is too short to invest with management teams you can’t trust. There are thousands of public companies in North America. Do not waste your time with the bad apples.

Each person has his level of tolerance and his definition of dishonesty. I don’t invest in a management team that: • Makes false promises and does not deliver what it said • Uses creative accounting to manipulate the financial statements • Has a history of theft or fraud • Attempts to misrepresent past qualifications and accomplishments • Discloses material non-public information to certain investors

6. Sell If Management Does Not Act In Your Best Interests One of my important criteria when buying a stock is that the management team’s interests are aligned with mine. That is, they have a significant equity stake in the company, and their salary is reasonable. When the opposite happens, it may be a reason to sell.

Therefore, I am not fond of extremely high salaries (compared to similar companies in the same sector), exaggerated bonuses, and the aggressive use of stock options, among other things. I need to feel that the shareholders will ultimately benefit from the success of the company, not management alone through sky-high compensation.

7. Sell If The Stock Is Overvalued Be very careful with this one. There are probably some good reasons why a stock appears overvalued: a track record of success, a solid long-term potential, strong competitive advantages, etc. Essentially, high-quality companies have the potential to appear very expensive from time to time when looking at

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NASDAQ during the dot-com bubble

traditional valuation metrics.

An expensive valuation is not necessarily a reason to sell in itself. That said, sometimes a stock will get overvalued because investors push their positive sentiment about it to the extreme. You have to be careful and be able to recognize when there are no more skeptics about a company. When a stock seems overvalued, and everyone agrees it will keep going up, be careful.

For proponents of technical analysis, a stock chart that climbs in a parabolic way is usually a sign that the positive sentiment has become extreme. Again, be careful because the subsequent fall is often brutal.

8. Sell If You Don’t Know How To Value The Company Properly Sometimes, you may end up owning a stock and having no idea how to value it. Maybe you bought it because you thought you understood the business, but you realize it was a mistake. Maybe you just followed a friend’s advice. Maybe you wanted to take advantage of an uptrend in a sector you are unfamiliar with (cryptocurrencies/cannabis/ natural resources anyone?).

Whatever the reason, it is important to know what you own and to understand it properly at all times. If you don’t, how will you make good buying or selling decisions about the stock in the future? If you have no idea when or why to sell, the best time might be now.

Would You Be A Buyer Today?

This question can help you to put things in perspective. Assuming you were not already

a shareholder of the company, would you be buying it today, at the current price? If not, ask yourself why the stock is in your portfolio then.

In the end, the reasons for selling are often reasons not to buy in the first place. If you have a solid investment process with clearly defined criteria when you buy, these criteria should also guide you through the selling process. Monitor the red flags continuously for the companies you own.

If you ever have a chance to find an outstanding company, in good financial health, with a solid long-term potential, a product or service that is easy to understand, an honest and competent management team, and its valuation never gets too crazy, then you might have the opportunity to make a Warren Buffett of yourself and hold it forever.

Otherwise, I recommend you keep your eyes open for reasons to sell! n At age 24, having a decent amount of savings, Mathieu was looking for an investment strategy that would allow him to stand out and grow his portfolio in a meaningful way. It didn’t take long for him to discover the microcap sector. Being a self-learner, he spent the next five years reading books about investing, taking online classes, attending conferences and testing his ideas on the ground by putting his own money at risk.

Five years later, he has attended more than twenty investing conferences, met over three hundred company executives and wrote over fifty blog posts on his blog Espace MicroCaps. He now acts as a consultant and analyst for the Rivemont MicroCap Fund, which is dedicated to finding the smallest and most undiscovered growth companies in North America.

Mathieu believes that every person has the potential to invest successfully in microcaps if they really commit to it. His mission is to help people educate themselves, improve their skills and grow their savings.

Espace MicroCaps - Bio Espace MicroCaps is a community of microcap investors with a growth-value philosophy. Through indepth research and due diligence, they aim to put their growth capital at work for the most promising public firms in Quebec and Canada with a long-term investment horizon.

To help its members improve their investment knowledge and skills, expand their network and grow their portfolio, Espace MicroCaps publishes educational articles on microcap investing, organizes networking events in Montreal and shares fundamental research about exceptional microcap companies.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

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ASIA CORNER

Hong Kong’s Summer of Discontent Overshadows Growth Stocks

H

ong Kong’s summer of discontent is attracting headlines throughout the world feeding into a range of misinformation about the future of Hong Kong. While political uncertainty is high, it is also certain that China still needs Hong Kong. Hong Kong has a special role of connecting the world to China making it an irreplaceable asset to the PRC. As a pure financial center ranking among the top three global financial hubs, Hong Kong is an entry point for global investors to buy Chinese assets and for Chinese to borrow U.S. dominated funds. Since the handover in 1997, Hong Kong has developed one of the world’s most active and liquid security markets with free flow of capital, western-style laws, independent regulatory environment, unfettered access to information, and favorable tax policies on capital gains and dividends. It also serves a critical role in China’s financial opening up as the world’s largest offshore RMB business center, with stock and bond connects between Hong Kong, Shanghai and Shenzhen. Any disruptive moves or attempts to damage the financial sector in Hong Kong would jeopardize global financial institu-

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tions’ vital interests as well as hundreds of thousands of investors.

Still, news of the events in Hong Kong has stirred up a bit of an apocalyptic sentiment in the market. Caught between the U.S.-China trade war and fourteen weeks of riots, the Hang Seng Index has fallen over 14 percent from its April highs, for a year-todate return of around only 3 percent. The deteriorating public order has also taken a toll on the city’s IPOs. Expectations were high for another active year of IPOs with PwC predicting funds raised in 2019 would be greater than last year. In the first half of the year, 84 new companies listed in Hong Kong raising HK$8.9 billion for an increase of 35 percent year on year, according to PwC. Yet, weeks of protest have pushed IPO valuations lower and many companies have either withdrawn their IPOs or are postponing until stability returns to the city. In July, Anheuser Busch In Bev’s Beverage Asia Unit withdrew its plans for a Hong Kong IPO to raise $9.8 billion stating prevailing market conditions as one of the factors for the decision. Additionally, China’s biggest e-commerce company, Alibaba Group Holding has delayed plans to raise up to US$15 billion in Hong Kong amid growing political unrest. Only US$10.8 billion has been raised through IPOs as of the end of August, putting Hong Kong in fourth place among global exchanges, down significantly from the US$24.3 billion raised by the same time last year. Despite the current bleak situation, Hong Kong will maintain its appeal as an attractive IPO destination. Especially, for companies that have business in Greater China whose listing in Hong Kong is not just about raising funds but about also raising their profiles in the region.

Looking beyond the geopolitical and local tensions, some positive news can be found in the market. In August, net inflow into Hong Kong stocks through the southbound Stock Connect was the third largest recorded at US$7.5 billion, as mainland investors were buying shares listed in Hong Kong trading at attractive discounts compared to their China-listed counterparts. According to the Hang Seng Stock Connect China AH Premium Index, which tracks the average price difference of China-listed A shares over Hong Kong-listed H shares for the most liquid Chinese dual listed companies, in August, A shares were priced more than 30 per cent above their H-share listed counterparts.

A deeper analysis of the Hong Kong market shows trade-war proof industries such as healthcare and domestic consumption are outperforming the broader market. China’s pharmaceutical market, driven by increasing domestic consumption, policy support and reform, is projected to grow to US$393 billion in 2025 from US$226 billion in 2017, according to Citibank. Top performing pharmaceutical companies on the Hong Kong Exchange include: Sino Biopharmaceutical (1177:HK), a conglomerate targeting cardiovascular and hepatitis, which is up over 105 percent on strong organic growth and the acquisition of Beijing Tide, a Chinese company with a strong cardiovascular and pain treatment pipeline and; CSPC Pharmaceutical (1093HK) which up around 35 percent with a top line growth dominated by the sales of its oncology drug portfolio.

China’s domestic consumer goods sector with its limited exposure to the US markets and support by the Chinese government’s push to boost domestic spending is another

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Beer, Litres (Mn)

f = Fitch Solutions forecast. Source: National Sources, Fitch Solutions

safe haven for investors. As the country pursues its transition to become a consumptiondriven economy, the PRC is implementing a consumption stimulus plan. In addition to boosting urban consumption by promoting the night economy with cinemas, museums, gyms, and tourist sites open longer hours, China is undergoing a massive renovation program to turn old factories and buildings into modern shopping complexes and create more open-air markets. In rural areas, China is accelerating the development of e-commerce and tourism. Supporting the growing domestic consumption is the most advanced electronic payment system in the world with the leading online e-wallets Alibaba Group’s Alipay, Tencent’s WeChat Pay and UnionPay. Another source to stimulate domestic consumption is China’s roll out of 5G technology. This year Shanghai’s Hongkou became the world’s first district with a commercial 5G network which is serving as a testbed in preparation for the country’s official commercial 5G launch in 2020. China is forecast to spend $143 billion on its 5G network by 2025 as it builds a network that will represent 40 percent of the total global 5G connections. Over the next five years of its commercial deployment, 5G is predicted to drive an economic output of about US$1.5 trillion and create 3 million new jobs, according to the Ministry of Industry and Information Technology.

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Top Hong Kong growth companies in 2019 As China’s resident disposable income increases, highly successful premium lifestyle and food and beverage companies are swiftly emerging. Catering to the middle class with its exceptional service, trendy Sichuan hot-pot restaurant chain Haidilao International Holding (6862:HK) which offers manicures and massages to customers waiting for tables, is up almost 100 per cent YTD. While condiments manufacturer Yihai International Holding (1579:HK), the sole supplier of hot pot flavorings to Haidilao, is up almost 140 percent YTD after becoming the top performer on the HKEX in 2018 with a 140 percent increase.

China being largest beer market in the world, dwarfing the next leading markets, United States and Germany is seeing an increased demand for quality beer. With consumers looking for new niche and craft beer brands, China Resources Beer and Tsingtao Brewery, which together hold 40% of the Chinese beer market, are moving away from their low-cost strategies and ‘cheap beer’ image as they expand their premium beer portfolios. Tsingtao Brewery (0168:HK), China’s second largest brewery is up over 55 percent YTD while China Resources Beer Holdings Co Ltd (0291:HK) is up almost 55 percent YTD. Another segment that is one of the largest and fastest-growing in the world is the sportswear market. Driving this market growth is a

large millennial population who has a more active lifestyle than previous generations and embraces the athleisure trend. ANTA Sports (2020:HK) is up over 65 percent YTD while Li Ning (2331:HK), China’s premier sports brand founded by the former Olympic gymnast, has taken off this year with over 155 percent increase YTD. China’s largest sportswear firm with more than 8000 retail stores Topsports International, is proceeding with its IPO plans in Hong Kong as it looks to raise up to $1 billion by the end of the third quarter. n Ms. Leslie Richardson has over 20 years of investment management and equity research experience. She operates a boutique investor relations firm in Hong Kong for Asian companies listed in the U.S. and Hong Kong.

She also assists private companies develop investment material and build an investor following in preparation for a public listing. Additionally, she is the Asian Correspondent for Micro-Cap Review, www.microcapreview.com, a financial magazine focused on mirco-cap companies. Previously, she worked for CCG Elite in assisting Asian-based, U.S. listed clients formulate key communication strategies. Ms. Richardson began her investment career at U.S. Trust Company then went on to join Odyssey Advisors as a portfolio manager and Director of Research. Ms. Richardson specialized in high growth sectors such as bio-tech, alternative energy, IT and telecommunications. She earned her M.B.A. from the University of Southern California. Ms. Richardson is based in Hong Kong. www.elite-ir.com.

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Leslie Richardson does not own shares of any of the companies mentioned.

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Is Gold About to Lose It’s Luster?

“O Gold! I still prefer thee unto paper, which makes bank credit like a bark of vapour” Lord Byron Born at the start of the 125 year “Revolutionary” Cycle Comex Gold, 1503.7, 11 September 2019, 1:38 PM, Chicago, USA

n BY STEVEN M. SHELTON, MS, MBA, CFP®, CLU, CHFC, TEP, CIMA®, CMT

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In Brief: •

Preferred Scenario – Gold’s most recent “major” low was in late 2015, followed by a sideways move in a corrective triangle structure that was completed in May 2019 and has been trending higher in a final leg up to an estimated range of $1,580-$1,700 • Now expecting a downward correction from a recent short term peak that may be complete or may take a more expanded form thus taking weeks to complete, both leading to an important top that will bring a reversal trending down to under 1,000, with a potential target of $681 in a deflationary environment • Alternate Scenario – As a very close second, Gold has made a major crest and is now in the process of trending down to under $1,000, with the potential to hit $681 • As a long term Gold projection, the next major long lasting low is expected to be in 2029-2030 and the next major long lasting top is expected to be in 2039-2041 Gold is above its 200 week and 50 week simple moving averages, so the trend is technically up However, its mostly likely in a current short term downward correction, followed by a continuation of the upward trend In due course, Gold will peak and decline toward under $1,000 and a potential target of $681, in a deflationary trend over time However, the move from 2015 low is not expected to reach the 2011 highs A move under $1,304 in a five wave internal structure will initially confirm resumption of the long term trend to down

However, internal market structure analysis will provide high probability confirmation well before $1,304!

In the application of Elliott Wave analysis, there are many different patterns that a counter trend corrective trend may take, some sharp and others sideways As noted above, the completed picture perfect contracting triangle is just one of those forms and commonly found in the middle of a correction, just as depicted Gold is expected to “eventually” decline “impulsively” below $1,000 with a likely target of $681, the extreme low of the previous Primary Cycle low in 2008 To reaffirm per the Monthly Chart : Gold crested in 1980 at $875 and then crested again in 2011 at $1911, a span of 31 years That span is not surprising, as commodities in the aggregate tend to crest every 30 years, top to top and bottom every 30 years, low to low Commodities also have a tendency” for down trends to exhibit a duration of 20 years and upward trends to have a duration of 10 years for a total of….. surprise, 30 years!

As Gold last crested in 2011, it is expected to crest again around 2041, a 30 year span As Gold last bottomed in August 1999, it is expected to create a lasting bottom around 2030, an approximate 30 year span ending at Cycle c, Supercycle (c) However, following the upcoming Cycle a low, perhaps around 2020 or so, anticipate a countertrend rally up to Cycle b crest, then rolling over toward Cycle “c” Point to Ponder: TAKE NOTE THAT DURING THE LAST

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Market Technical Report and CGG Technical Research Notes, all of which are general informational services regarding Global Macro Economics and Market Technical Analysis. Cornerstone Global Group LLC’s independent contractor consultants are not investment advisers. At no time may a reader, caller, viewer or consultancy client be justified in inferring that any advice from Cornerstone Global Group or its Non-FINRA registered consultants is intended as investment advice or as investment recommendations directed to any particular person or in view of the particular circumstances of any particular person. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Before investing consult with your investment advisor. Cornerstone Global Group LLC does not render tax, accounting or legal advice and the information contained in this communication should not be regarded as such. Information provided by Cornerstone Global Group is expressed in good faith but is not guaranteed in any way.

Comex Gold Daily

About the Author: Steven Shelton is a Financial Services veteran of more than 30 years, having served in senior management in both the insurance and broker/dealer community, on and off shore. He has expertise in economics, financial market analysis, wealth management, traditional and alternative investments, financial planning, marketing, insurance, sales and consulting as well as an international speaking regarding global economics and financial markets. This is evidenced by advanced degrees in business administration and economics as well as six professional designations to include, Certified Financial Planner, Chartered Life Underwriter, Chartered Financial Consultant, Certified Investment Management Analyst, Tax and Estate Practitioner and Chartered Market Technician. He is the Managing Member of Cornerstone Global Group LLC, an Institutional consultancy and financial services publishing entity, as well as, Managing Partner of Shelton Farms and Enterprises LLC. He is a personal affiliate of Weild & Co., member FINRA/SIPC, an institutional Broker/ Dealer focused on investment banking.

Comex Gold Weekly

Comex Gold Monthly

TWO FINANCIAL CRISES, GOLD WAS NOT MUCH OF A SAFE HAVEN AND DID INDEED DECLINE DECISIVELY IN 2008!!

However, will it be different this time? n Cornerstone Disclaimer: Broker/Dealer services and investments are offered

by Steven M. Shelton, independent contractor and FINRA Registered Representative, through Weild & Co., http://www.weildco.com, a Member of FINRA http://www.finra.org and SIPC, http://www.sipc.org Securities transactions effected through Weild & Co., member FINRA/SIPC. This message and any attachments are confidential. All messages sent to or from

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our system are subject to review and retention. Our full Electronic Communications Notice may be found at www.weildco.com/ecd

Note: This article is not an attempt to provide investment advice. The content is purely the author’s personal opinions and should not be considered advice of any kind. Investors are advised to conduct their own research or seek the advice of a registered investment professional.

Cornerstone Global Group LLC is not affiliated with Weild & Co.; Cornerstone Global Group LLC does not offer securities nor securities advice and is not a member of FINRA/SIPC. Cornerstone Global Group LLC, 3240 North Lake Shore Drive, Suite 11-D, Chicago Illinois 60657, may provide institutional non-FINRA related consultancy on farming and general marketing, distribution and product/service development to and for institutional use only, without contact with any of a consulting firm’s individual clients Cornerstone Global Group LLC is also a financial literacy newsletter publisher of the CGG Global

MicroCap Review Magazine

95

TsX-v: Fvan / oTcQX: FvanF

P R O F I L E D C O M PA N Y

First vanadium corp.

F

irst Vanadium Corp. is Earth Elements over the winter 23 a Canadian junior minthat drove MSM to consider the ing company with an 21 Critical Elements to the sucadvanced stage exploration projcess of the US, woke some people Vanadium ect in mining friendly Nevada, A steel strengthner and up to the lack of control over battery metal during a mining sector expanour own destiny. The demand, sion period and a political the need and the critical nature administration that understands the critical of these elements has not diminished at all. nature of vanadium. The 2,609-acre project In fact, the necessity of a world power to is 6 miles from Carlin, Nevada meaning control its destiny has never been as necesnear to roads, railhead and power. It is sary as now. a large resource which is fully funded to We cannot rely on Russia and China for Preliminary Economic Assessment (PEA) our infrastructure, our energy and power, or in Q1 2020. Not only is this resource near our shift towards a clean and green future. surface but at 300,000,000 pounds in the First Vanadium is a high-grade opportuIndicated category so far, and 75 million nity on track to provide North America a pounds in Inferred resource, this makes it potential supply of critical vanadium for our the largest and highest-grade primary vana- future. dium deposit in North America. A technical Vanadium is on that critical elements list. team with over 400 years of senior industry The importance of Vanadium cannot be experience has been assembled to maximize overstated for safe strong infrastructure and the evaluation and potential viability of this reliable sustainable energy storage, incredhigh-grade project. They represent the new ibly important to a modern growing and shift in Western control over key minerals. mobile nation and currently vanadium is not being produced in quantity in North vanadium is sTill cRiTical America. China and Russia supply just over and FiRsT vanadium is 70% of the world’s Vanadium, although alignEd To THE soluTion deposits exist in North America. “it is time to discover, recover and reserve a hold on The trade war with China has many consid- this metal for the future”, stated Paul Cowley, erations. The flurry of interest about Rare CEO of First Vanadium.

Eighty-five percent of vanadium is used in infrastructure making the steel stronger and lighter, revolutionizing construction from rebar in buildings, bridges, pipelines, even jet turbines and bodies. Globally, $3.7 trillion is required in infrastructure per year, according to McKenzie Global Growth Initiative.

V

vanadium vERsus liTHium

Paul Cowley, CEO

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Far more exciting is the energy storage opportunity: the vanadium Redox utility

Project Location

scale battery is superior to the well-known lithium ion counterpart. Clean, not degrading over time with countless recharging, the Redox battery doesn’t have the risk of exploding, which has happened with the lithium ion battery. In Dalian, China, the world’s largest battery, a vanadium Redox battery is about 10 times the size of Elon Musk’s lithium battery. The current multibillion dollar booming solar plus battery projects world-wide are also expected to uptake vanadium batteries. These solar projects span residential, corporate, municipal, state and country levels. As residential example, California has regulated that solar panels must be on all new house construction. n Please visit the company’s website for more information: www.firstvanadium.com This material contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forwardlooking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

The company paid consideration to SNN or its affiliates for this article.

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sEE company pRoFilE pagE 8

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