yesterday, the company had announced the total refinancing of its debt and the receipt of approval to expand operational throughput to 800 tonnes per day from 540 tonnes per day. The company has also announced the Feasibility study results of its 100% owned Sugar Zone Mine in White River Ontario.
The company has completed its BNP Paribas debt financing package for $72.5 million which comprises of a 6-year term loan of $52.5 million and 3-year revolving credit facility of $20.0 million. The repayment of the debt will commence on March 31, 2020, when Harte Gold will be produced in full capacity.
Harte Gold has also settled the $10.0 million equity investment provided by Appian Natural Resources Fund at $0.27 per common stock.
On May 3rd Harte Gold received permits to increase their mine production to 800 tonnes per day which will increase the company’s annual gold production to around 65,000 ounces.
Sugar Zone Mine Feasibility Study
The Feasibility Study indicates probable mineral reserves of 3.9 million tonnes at 7.1g/t Au which contains 890 ounces of gold reflecting a 38% net mining dilution. The production will generate net free cash flow of 30 million annually at $1,300/oz gold. The process plant and mine are already operational thus they will not require any additional construction expenses.
The mine is an expansion opportunity for Harte Gold and it will produce 1,200tpd and could increase gold production to 95,000 ounces which will minimize cash costs based on benefits of scale. The FS demonstrated that the conversion of the near mine exploration target has the potential of extending the mine life as well as reducing mining development expenses for each tonne of ore processed.
Another opportunity identified is the installation of a leach circuit for on-site processing of floatation concentrate which will increase payable gold ounces as well as reduce costs.
Harte Gold is the newest gold producer in Ontario through the 100% owned Sugar Zone Mine in White River Ontario.
Shares of Kraig Biocraft Laboratories, Inc. (OTCMKTS:KBLB) were among the biggest penny stock gainers in Tuesday’s session. The stock jumped 39% to close at $0.34 after the company announced production expansion footprint in Vietnam.
Lansing, Michigan based biotechnology company, Kraig Biocraft Laboratories, is primarily engaged in creating technology that could produce genetically engineered silk and over the past few years, the company has grown by leaps and bounds. However, as everyone knows, a company needs to keep expanding rapidly in such a niche sector and that is what they have done by Kraig Biocraft after they acquired a facility in Vietnam for a lease of 5 years. This is going to raise the company’s ability to produce more of its signature product. On the other hand, Biocraft has also announced that it has entered an arrangement with Polartec to supply this silk for usage in products that are meant for military use.
Big News: Entry in Vietnam
The recombinant spider skills technology is Kraig Biocraft’s flagship product at this point of time and the company’s decision to expand its production capabilities by acquiring the plant in Vietnam seems to have been a wise decision. The facility in question is located in Quang Nam and is spread of an area of 50,000 square feet.
It will not only allow Biocraft to turbo charge its production of its signature proprietary spider silk product, but also help in keeping costs of production low. The company is currently the leading player in its line of business.
Merely increasing production is of not much use, if the products are not actually put to good use and to that end, Kraig Biocraft has entered into an arrangement with Polartec to jointly produce apparels and fabric that will use the recombinant spider silk that the former produces. The two companies have been engaged in joint efforts from as early as 2016 and at the time the spider silks was primarily used in producing military grade products.
However, the potential of Kraig Biocraft’s product when it comes to usage in traditional apparel is far more appealing. For instance, the fabric has the look of luxury and in addition to that, it is apparently far more breathable. In such a situation, it is not a surprise that this particular agreement between the two companies is being looked upon as a potential game changer. Polartec has been involved in fabric tech, apparel design and fabric science since 1981 and could prove to be the ideal partner for Kraig Biocraft.
MedMen stock has underperformed the broader cannabis sector over the past one year. The stock has tumbled over 65% from its October peak price of $7.57.
MedMen Enterprises (CSE:MMEN) (OTCQX:MMNFF) has announced the opening of its second location in Sorrento Valley, San Diego California and its third-quarter results.
Sorrento Valley store
The location will be the 11th operational store the company is opening in California.
The Sorento Valley facility is strategically located in San Diego which is a major tourist destination. The opening of the store shows the company’s expansion strategy is in California which is estimated to have a cannabis market potential of $11 billion annually. Recently MedMen reported an estimated $100 million in annual sales in California and a 7% market share2.
Q3 operating results
In the third quarter, MedMen reported systemwide revenue of $36.6 million that includes its retail operations and it also represents a 22% increase from the second quarter. The revenue recorded also includes the pending acquisition of PharmaCann as well as other smaller buyouts. In the third quarter, pro forma sales grew 11% to around $54.9 million compared to the third quarter last year. PharmaCann posted strong sales growth in the quarterly revenue growing to 15.5 million up from $9.8 million in the second quarter.
MedMen ended the quarter with around 82 licenses and 32 stores which includes pending acquisitions. In October 2018 when MedMen agreed to acquire PharmaCann for $682 million they had on 66 retail licenses. Although the expansion sounds to be a strong sign of progress the full quarterly results might reflect something different.
One thing that should raise eyebrows is how the company generated its Q3 results. Besides sales growth in Nevada and Arizona of 34% and 513% respectively most of its organic sales in 10 southern California locations declined. The 10 locations contributed a combined $24.9 million which was a partly 5% growth from Q2 which is alarming growth for a state that leads in recreational cannabis sales.
Gross margin also dropped from 53% in Q2 to 51% in Q3 despite the company reporting a $19.5 million gross profit. The company expects an operating loss of over $50 million following the trend in subsequent quarters.
The explosion of the cannabis industry in Canada has led to the emergence of many new businesses surrounding the industry and one of them is online retail for cannabis products. It is, without a doubt, a novel idea and one that would eventually pay off, because of the rising demand of cannabis product and accessories. One of the major names in the cannabis online retail space is Toronto based Namaste Technologies Inc. (TSXV:N) (OTCQB:NXTTF) and considering the line of business the company is in, one would expect them to do well. However, there are some burning issues with the company that could prove to be the undoing of Namaste Technologies in the long run.
Back in 2018, Namaste Technologies seemed to be the next big thing in the cannabis retail space after it recorded staggering growth of 300% in August and generated revenues to the tune of $1.65 million. All the revenues came from its interests in a range of website in Canada. Following in the tradition of major cannabis companies eventually heading to Nasdaq for raising more capital, Namaste Stock did the same but that is when the company’s hidden skeletons came to the fore.
Citron Research published a report in which it stated that the upper echelons of the company’s management were involved in large scale fraud. Namaste responded with legal proceedings against its CEO, who was eventually fired and made widespread changes at the board level. However, the company has had a disastrous run in 2019 and is yet to file its earnings report for the February quarter.
Amidst the general meltdown in the company’s standing, Namaste Technologies has also been grossly negligent of providing updates on its corporate situation for quite some time. Other than the update regarding the addition of a board member and then his installation as the chief of the audit committee, no big updates have been forthcoming.
The search for a new CEO is likely still going on but there is no clarity on the matter and an interim CEO is still doing the job. Last but not the least, without further clarity on its earnings and the appointment of a new CEO, it is highly unlikely that the company is going to be looked upon favourably by Wall Street.
Namaste stock has tumbled over 80% from its from its all time high of $3.05.