It isn’t just the Rio Olympics sporting a banner of green and gold this season. With stellar growth in both, the gold and medical marijuana industries, Clarus has been busy with raising over $500 million in capital for our clients.
The yellow metal has been an outstanding performer this year, both in terms of its rising price but also in terms of raising capital to shore-up balance sheets and stimulate growth.
With companies in Canada, London and Austrialia, Clarus has been active in the space and has had 9 transactions for a total value of $475 million and have led or co-managed some $173 million.
To Greener Pastures
The major Medical Marijuana players have also been active raising capital to help expand their production & growing capacities. Clarus has focused on what we believe to be industry leaders in the space and have helped raise over $45 million to support their cause.
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.
Alio Gold Inc.
Park Lawn Corp.
Med Releaf (IPO)
Clarus is an idea shop. We don’t cover all sectors and we don’t cover all the names in a space. By being very select in a sector, we try to deliver the best ideas that generate the best absolute returns to investors. We have been helping our clients with ideas like these lately:
We got involved in the medical marijuana space early, some 2 ½ years ago, and have delivered extraordinary returns to investors by way of names like Aphria (APH), our first idea in the space in July 2014 had an equity value of $41 million (share price $0.78/sh) and is now $750 million (recent price $6.70/sh). We have been publicly involved with multiple cannabis related companies and have become a go-to player in the emergent space.
Our mining group has been outstanding at generating ideas like: Endeavour Mining, a deep value turnaround story, whose market cap when we initiated in February 2015 was $223 million ($5.40/sh) at writing was $2,374 million ($25.39/sh) ; Golden Predator (GPY), a new exploration play in Canada’s Yukon that is proving up a potentially major new play and Cardinal Resources (CDV-ASX) which is delineating the large Namdini play in Ghana.
In special situations we identified: CRH Medical, a gastrointestinal company in early 2015, trading at $3.62/sh ($250 million) it recently surpassed $11.00/sh (equity value $800 million); Polaris Infrastructure, a geothermal energy turnaround and growth story, in January 2016 traded at $8.05/sh ($125 million) and recently traded at $14.30/sh ($225 million) having traded as high as $18.80/sh.
Our focus on oil and gas explorers like Leucrotta Exploration whose recovery from $0.83/sh (EV $98 million) to a recent $2.40/sh ($354 million) or Yangarra Resources trading from $0.48/sh ($85 million) in January 2016 to a recent $2.64/sh ($276 million), have strongly outperformed the sector because they are not commodity price calls but fundamental reserve growth stories.
Markets Were Open in Q1 2017
As markets opened up in Q1 2017, Clarus nimbly participated with a very active calendar. We participated in 15 transactions raising a total of $273 million. The cannabis space remained active with four transactions, the mining exploration space heated up with five deals and the healthcare, technology and special sits area saw six transactions.