Clarus Securities Inc.

Asanko Gold Mine Site Visit

Nana Sangmuah

We return from last week’s site visit very encouraged and with furthered confidence in the project’s operational performance and management’s staged development approach to doubling production by 2022.  The plant performance to date, grade reconciliation, qualified personnel and ramp up in production to steady state by Q2/16 provide us with optimism.  Our flyover of the mine revealed the extent of artisanal activity, indicative of a highly prospective belt.  In our opinion, AKG is well positioned to boost production by 50% to 280 koz by 2018 and to doubling production to ~480 koz by 2022 supported by internally generated cash flows.

Article Highlights:

Mining Ramp-up on Track
  • Nkran can be effectively mined at a rate of 3Mtpa without requiring significant push backs that could be detrimental to the project economics...
Grade control drilling
  • In the western and eastern portions of the pit where the ore body daylights, positive reconciliation on grade has been seen and is currently being encountered in the main ore body...
Plant and Metallurgy
  • TSF has a capacity for 120 Mt, more than sufficient for the combined capacity of Phase 1 and Phase 2 of 95 Mt.  In addition, the Nkran extension which was picked up as a result of condemnation drilling and is contiguous to the TSF is planned to be mined out soon and that could provide room for additional capacity, if needed...

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What's Happening at Clarus...

Brock Winterton

  • A busy start to the year had Clarus lead or co-lead 3 transactions in January and co-manage another 2 raising a total of $303 million. (2/20/2018)
  • We recently initiated coverage of BeWhere Holdings (BEW $0.47). This young but experienced IoT telematics company is disrupting the market with its use of very low cost, next generation, low power cellular modem (LTE-M and NB-IOT) technology. We expect BeWhere to add several hundred thousand active subscribers over our forecast period. Buy with a Target Price of $1.00. (1/30/2018)

Remaining At the Centre of Key New Industries

Brock Winterton

The evolving market focus on cannabis related companies translated into several lead, co-lead and manager roles including two lead roles for Aphria Inc. raising over $200 million supporting its aggressive growth plans and a co-lead role for MedReleaf in its $100 transaction to also support a build-out of capacity.  We also helped Liberty Health Services with its roll-out of production and dispensary services in the Florida medical market.  In all, we raised over $350 million in 5 transactions for cannabis related companies in Q4/17 and early 2018.

As a continuation of our special situation coverage focusing in the US healthcare industry, we completed an IPO for Akumin Inc., an outpatient imaging centre consolidation story that has considerable opportunities for growth.  Also in the special sit area we led a transaction for QYOU Media, a company accessing massive international markets with its curating and packaging of web content and newly evolving e-sport content.

Blockchain related companies also developed a following and Clarus nimbly participated in the space with its involvement with LeoNovus, a cloud solutions provider using blockchain technology, as well as having supported the growth of Global Blockchain Technologies Corp.

Traditional sectoral coverage also played a role as Clarus led two, co-led one and co-managed one transaction in the gold sector including one for a West African gold developer, two for US focused companies and one for a Canadian focused company.

  Issuing Company
$ Millions Raised
  Aphria Inc.
  Aphria Inc.
  MedReleaf Corp.
  Nuuvera Corp
  Liberty Health Services
  Akumin Inc. (non-raise IPO)
  QYOU Media Inc.
  Leonovus Inc.
  Global Blockchain
  People Corp.
  Cardinal Resources
  Aurelius Minerals Inc.
  Lucky Minerals Inc.
  Pershing Gold Corp.

Execution Remains Strong in Q2/17

Brock Winterton

During a quarter where agency trading just got more challenging, markets also saw several financings fail to fully sell. Fortunately, Clarus continued its successful capital raising activities including executing some sizable IPO’s.  In total, we raised $503 million in eight transactions of which we were lead or co-lead in six.  Noteworthy, four transactions were of $80 million or more. Three transactions raised $245 million of new equity in the cannabis industry taking our 2017 total to 8 transactions and $326 million of new equity.  In the last year, Clarus has raised $501 million in the cannabis space. Three transactions in Q2/17 totaling $98 million were completed in mining, one $80 million transaction was done in the oil and gas space and one for $81 million was done in the Special Sits space.

  Issuing Company
Capital Raised
  Alio Gold Inc.
  Park Lawn Corp.
  Med Releaf (IPO)
  Aphria Inc.
  Cardinal Resources
  Leucrotta Exploration

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