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Mitch

Leede Financial Investment Insights


 

Wealth Management


Chartwell Retirement Residences (TSX: CSH.UN) has agreed to issue $150 million aggregate principal amount of Series D senior unsecured debentures.

  • The Debentures will bear interest at a rate of 4.4per annum and will mature on November 5, 2029.

  • The Debentures will be unconditionally guaranteed by Chartwell Master Care LP.

  • The offering is expected to close on October 28, 2024, subject to satisfaction of customary closing conditions.

  • DBRS Limited has assigned a provisional rating of "BBB (low)" with a "Stable" trend to the Debentures.

    • It is a condition to the closing of the offering that DBRS Limited assigns a final rating to the Debentures of "BBB (low)" with a "Stable" trend.

  • Chartwell intends to use the net proceeds from this offering to repay existing indebtedness, including indebtedness under their secured credit facility and term loan and to partially finance certain previously announced acquisitions of retirement residences expected to close in Q4/24, including indebtedness incurred in connection with such acquisitions.



Fiera Capital Corporation (TSX: FSZ) announced preliminary estimate of AUM of approximately $165.5 billion as at September 30, 2024, compared to $158.9 billion as at June 30, 2024.

Frontera AUM

Frontera Energy Corporation (TSX: FEC) announced.

  • That they have taken up and paid for 3,375,000 of their outstanding common shares at a price of $12 per Share under their substantial issuer bid pursuant to which they offered to purchase from shareholders for cancellation up to $40.5 million (equivalent to US $30 million) of Shares.



KP Tissue Inc. (TSX: KPT) and Kruger Products Inc., announced the completion of the construction of a new plant on a site adjacent to the existing Sherbrooke TAD facility and the successful start-up of their new double-width light dry crepe (LDC) tissue machine with a capacity of 60,000 metric tons.

  • The $377.5 million expansion project also included the installation of two converting lines: a facial tissue line in the new Sherbrooke LDC plant, which started up in February 2024, and a bathroom tissue line in the existing Sherbrooke TAD plant, which started up in February 2023.

  • The project was supported by Investissement Québec, agent for the Government of Quebec, who provided $165 million in loans.

  • At maturity, the Sherbrooke site will be able to produce more than 130,000 metric tons of high-quality tissue products like Cashmere UltraLuxe®, Scotties® Ultra Soft and SpongeTowels Ultra Pro® for Canada and White Cloud® for the U.S. This additional capacity will allow Kruger Products to expand its product offering and grow its market share in North America.



Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) has entered into a new credit facility agreement on October 21, 2024 for an aggregate principal amount of up to US $500 million, comprising a US $275 million revolving credit facility and a US $225 million term loan facility, maturing in January 2028.

  • The Facility was completed with a syndicate of both existing and new institutional lenders at interest rate spreads similar to the maturing debt facility.

  • The REIT is also in advanced stages with lenders to refinance another US $138 million of upcoming debt maturities, which are expected to be completed during the fourth quarter. Subsequent to these refinancings, the REIT’s forecasted weighted average interest rate across its portfolio, coupled with the REIT’s interest rate swap contracts in-place, will be 4.8%, continuing to provide positive leverage and stability for the REIT.



Topaz Energy Corp. (TSX: TPZ) has completed their previously announced bought-deal equity financing of common shares.

  • Pursuant to the Equity Financing, Topaz issued 7,000,000 Common Shares, in addition to 1,050,000 Common Shares issued pursuant to the exercise in full of an over-allotment option granted to the underwriters.

The Common Shares were issued at a price of $25.05 per Common Share for total gross proceeds of approximately $201.7 million


 

Speculative Investment



Atlas Salt Inc. (TSXV: SALT) announced the commencement of the geotechnical drilling program at their Great Atlantic Salt Project.

  • Additionally, they have finalized the acquisition of a 160-hectare Crown land surface lease.

  • The program is designed to ensure that the decline and box cut meet the highest standards of safety and stability. Drilling has commenced and is expected to be completed by Q1 2025. The investigation's scope includes:

    • Geotechnical Drilling: 2,700 meters of core drilling along the decline alignment to gather data on rock quality, structural conditions, and other key factors affecting construction.

    • Hydrogeological Testing: Assessment of groundwater flow and permeability to support dewatering and design strategies for underground development.

    • Data Analysis: Development of a 3D geotechnical model to guide detailed design and construction efforts.

    • Groundwater Monitoring: Installation of piezometers to continuously monitor groundwater levels and ensure stability during future underground operations.



Barksdale Resources Corp. (TSXV: BRO) has entered into a debt settlement agreement to settle an aggregate of $41,367 (US $30,000) in bona fide debt owing to an arm's-length creditor by issuing 258,543 common shares at a deemed price of $0.16 per Debt Settlement Share.

  • They have entered into the underlying property agreement to secure a suitable location as close to the Sunnyside property as possible to provide a space for loading/unloading and storage of drilling supplies, equipment and tools to support the ongoing drilling program while cutting down daily travel distances.

  • Barksdale intends to satisfy the indebtedness with the Debt Settlement Shares to preserve their cash for development of their business.

    • The Debt Settlement Shares to be issued pursuant to the Shares for Debt Transaction will be subject to a statutory four-month hold period from the date of issuance, in accordance with applicable securities legislation.

    • The Shares for Debt Transaction, including the issuance of the Debt Settlement Shares contemplated thereby, is subject to acceptance by the TSX Venture Exchange.



Camino Minerals Corporation (TSXV: COR) provided an update on the progress of the Summer 2024 mapping and exploration campaign at the Los Chapitos copper project in Peru.

  • During the summer geological mapping campaign, collaborative efforts between Camino and its exploration partner Nittetsu Mining CO., LTD (TYO: 1515) have significantly advanced the 1:5,000 and 1:2,000 geological mapping program, which successfully identified new prospective copper oxide areas at the La Estancia trend that hold potential for future exploration drilling and development.

  • This La Estancia fault extends for approximately 12 km through Camino's claims to the property boundary where Rio Tinto (NYSE: RIO) recently staked claims in 2024.

  • Diamond drilling is anticipated to commence as early as December 2024.

  • Highlights: 

    • Identification of five new exploration targets at La Estancia.

    • Discovery of additional copper zones at Pilar Maria along the Diva Trend.

    • Notable mineralization at multiple targets, including:

      • Pampero: Up to 3.8% Cu and 4.0 ppm Ag in geochemical samples.

      • Pilar Maria: Copper oxide grades reaching 7.3% Cu and 54 ppm Ag.

      • Sombrero Blanco: Copper oxide mantos and exotic surface copper deposits.

    • Drilling to begin at prioritized targets as early as December 2024 with the anticipated new tranche of $1.5 million earn-in funding from Nittetsu.

    • Ongoing exploration will also target structural controls across the 12 km La Estancia trend, aligned with copper-rich IOCG systems such as Candelaria and Mantoverde.

Camino Minerals Corp



Cardiol Therapeutics Inc. (TSX: CRDL) announced plans to expand the MAVERIC clinical development program and advance CardiolRx™ into a late-stage clinical trial to evaluate the impact of CardiolRx™ in recurrent pericarditis patients following cessation of interleukin-1 blocker therapy.

  • MAVERIC-2 is expected to be initiated during Q4 at major pericardial disease centres in the United States and Europe and to report results ahead of the Company's planned pivotal Phase III study in recurrent pericarditis.



First Helium Inc. (TSXV: HELI) announced their intention to increase the size of their previously announced non-brokered private placement financing (October 16, 2024) from $2,500,000 to $3,000,000.

  • They will now issue up to 50,000,000 Units at a price of $0.06 per Unit, for aggregate gross proceeds of $3,000,000.

  • Each Unit will be comprised of one common share and one transferrable common share purchase warrant.

    • Each Warrant will be exercisable to acquire one Share at a price of $0.09 per Share for a period of 36 months from the date of issuance, subject to an acceleration clause.

  • They intend to use the net proceeds from the Private Placement Offering to fund additional asset development and operating expenses on its Worsley project, as well as for general working capital.



Foremost Clean Energy Ltd. (CSE: FAT) announced positive preliminary results from an 889 metre, four-hole diamond drill program that was recently completed at the Hatchet Lake Uranium Property located in the prolific Athabasca Basin region of northern Saskatchewan.

  • Highlights from preliminary results of the Drill Program include:

    • Elevated radioactivity of up to 360 counts per second (cps) associated with a post-Athabasca reverse fault observed from drill hole RL-24-29.

    • A shear zone with locally reactivated graphitic-pyritic faults was intersected approximately 80 metres below the unconformity in drill-hole TF-24-12. The projection of these structures to the unconformity represents a compelling target for future follow-up.

  • Denison Mines Corp. (TSX: DML), managed the 2024 Hatchet Drill Program, which consisted of two holes (RL-24-29 and RL-24-30) within the Richardson claim block and two holes (TF-24-11 and TF-24-12) within the Hatchet South claim block at the Tuning Fork grid 

Foremost and Denison Mines


Lithium Ionic Corp. (TSXV: LTH) announced the initiation of Engineering, Procurement, and Construction Management (EPCM) services for their flagship Bandeira Lithium Project located in northeastern Minas Gerais State, Brazil.

  • This milestone marks the transition to the construction and development phase of the Project and is a key step towards production. Advancing engineering and construction management services will progress the Project along the targeted timeline in anticipation of the upcoming approval of site permits.


TAG Oil Ltd. (TSXV: TAO)  has filed a preliminary short form prospectus, in connection with an overnight marketed public offering of units at a price of $0.21 per Unit for aggregate gross proceeds of $10,000,000.

  • Each Unit will consist of one common share and one-half of one Common Share purchase warrant.

    • Each Warrant entitles the holder thereof to purchase one Common Share at an exercise price equal to $0.30 per Warrant Share at any time up to 24 months following the closing of the Offering.

  • They intend to use the net proceeds of the Offering to advance appraisal and development activities in the Western Desert, Egypt, at both the Badr Oil Field and strategic new 512,000-acre concession and for working capital and general corporate purposes.

    • Activities to be advanced with the proceeds include executing re-entry work on multiple existing wells to recomplete and/or drill a sidetrack into existing conventional oil reservoirs, the drilling of new vertical delineation wells in the unconventional Abu Roash “F” (ARF) resource play targeting high intensity natural fractured areas, and the planning of the next horizontal well with multi-stage frac.

    • In addition, they plan to also complete a third-party resource report on the new strategic 512,000-acre concession that is in the process of being acquired and conduct a potential strategic joint venture partnership process.


Volatus Aerospace Inc. (TSXV: FLT) announced the successful closing of a total of $15 million in combined funding from Investissement Québec and Export Development Canada.

  • This New Financing will allow Volatus to expand its operations and accelerate the development of its aerial solutions across key core industries such as oil and gas, energy utilities, public safety, and infrastructure.

  • The total funding is comprised of $7.5 million from Investissement Québec in the form of a secured convertible debenture and $7.5 million from EDC in the form of a term loan.

  • The Debenture, with a term of five years, will be senior secured and convertible at the holder's option into shares at a Conversion Price of $0.202 per Common Share ($0.36 Volatus referenced share price prior to the DDC Merger, adjusted).

    • The Debenture will bear interest at a rate of 12.5% per annum until its maturity date on October 21, 2029.

The Term Loan from Export Development Canada (EDC) will be senior secured and non-convertible with an interest rate of Prime+8% and a term of four years with a balloon payment of up to $4.5 million at the end of the fourth year on 21st October 2028.


 

Charts of the Day


Markets


How the labor stats influence the small-cap market


Friday’s big news in US financial markets was the much better-than-expected jobs report, in which monthly jobs growth posted a significant upside surprise and big improvement vs. the prior month, and the unemployment rate unexpectedly fell. One thing that might have been a surprise for some was that despite lowered expectations for the Fed, Small Caps posted strong gains on the day. Indeed, at the close, the Russell 2000 was up 1.5%, handily beating the S&P 500. The big move in Small Caps on Friday is only surprising to some extent because their fate throughout 2024 has mostly been a function of increasing or decreasing dovishness around the Fed.


But equities focused more on the strengthening of the soft-landing thesis on Friday than the dialing down of Fed cuts, benefiting Small Caps, which we see as a healthy, and completely reasonable, development for this overlooked corner of the US equity market. Indeed, over time Small Caps have tended to outperform Large Caps when jobs growth is ramping up, and to underperform Large Caps when jobs growth is deteriorating or stagnant.


It’s worth noting that Friday’s jobs report was just one of several positive developments for the soft-landing thesis and the Small Cap trade last week. Another was the ISM services release, where the headline index moved up versus the prior quarter and beat expectations. Over time, we’ve seen a decent relationship between Small/Large performance and trends in this indicator.


We’ve been arguing that Small Caps are no longer cheap and oversold, and that while they have room to run on both positioning and valuation, they’ve needed something besides Fed cuts to get them to the next level. We’ve theorized that a return of economic tailwinds could be that new catalyst. Friday’s outperformance in the R2000 following the jobs number increases our confidence in that idea. The only thing tempering our enthusiasm for Small Caps a little after last week’s good economic news is that positioning in R2000 futures, while not quite back to past all-time highs, got a lot closer to them in Friday’s update. But we think valuations have more room to run.


Most sectors look undervalued in small cap
Small cap value attractive

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Leede Insights is general market commentary that does not constitute a research report of any company. The views or opinions expressed represent the personal views of the writer, are subject to change without notice, and do not necessarily reflect the views of Leede Financial Inc. (“Leede”)

The information provided has been compiled from sources we believe to be reliable, however, we make no guarantee, representation, or warranty, expressed or implied, as to the accuracy or completeness. Leede does not assume any obligation to update the information or give a description of further developments relating to the securities or material discussed. Nor is it an offer to sell or the solicitation of an offer to buy any securities. It is intended only for persons resident and located in the provinces and territories of Canada where Leede is registered. This report is not intended for distribution to, or use by, any person or entity in any jurisdiction or country including the United States, where such distribution or use would be contrary to law or regulation or which would subject Leede to any registration requirement within such jurisdiction or country. Leede its officers, directors, agents, employees and families may from time to time hold long or short positions in the securities mentioned herein and may engage in transactions contrary to the conclusions in this newsletter. Leede may perform investment banking or other services for, or solicit investment banking business from, any company mentioned in this newsletter.

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Leede Financial Inc. is a Canadian based independent, full‐service investment firm and is a member of Canadian Investment Regulatory Organization (CIRO), and a member of the Canadian Investor Protection Fund (CIPF). 

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