On Friday afternoons, I like to trawl the corporate news releases for ‘Friday News Dumps’ – crappy company news that is released right after trading ends for the week, after the cutoff for Friday night news outlets to make deadline, in the hope that nobody will run with a negative story.
Famous recent Friday news dumps include Organigram (OGI.V) admitting they’d need to recall their medical weed because it may be doused in poison, as an example.
But sometimes a Friday news dump will be positive news, released at a time when the company thinks maybe nobody will notice, which will allow them to move silently toward some new deal or buy up cheap stock before folks realize it won’t be cheap for long.
Today I noticed a fairly non-descript news item, the sort of thing you’d roll past without really looking too deep, and it triggered my spidey senses. Azincourt Uranium completes non-brokered private placement, said the headline.
I know. Snore.
Except for a couple of things that I found interesting.
First, the financing was over-subscribed. Not by much, but a little, meaning they got everything they came for, and in just a few weeks.
Second, the company ran another financing, just four months ago, this one a ‘keeping the lights on‘ private placement of $200k, almost a year after any news of any substance. A year earlier they tried to raise $500k, of which they only managed to get $130k. The CEO Blog on their website was last updated in late 2014.
After a year in which Azincourt rolled back its stock 4-for-1 and raised about as much money as your average dry cleaner takes in over the course of a year, to see a million dollars-plus suddenly raised in a few weeks is notable.
Fuck notable, it’s incredible.
Even moreso when you note what Azincourt actually owns to put that money towards: 10% of Fission 3.0’s (FUU.V) Patterson Lake North property, a property that Fission may or may not bother working this year.
This is, for all intents and purposes, a non-company. It’s a holding pattern with a head office. To paraphrase Monty Python, it is an ex-parrot, albeit with nice plumage.
So where is that million dollars going? Where did it come from? Who bought and why?
Always read the release in full:
Azincourt will apply the net proceeds of the Offering to advance the Company’s Patterson Lake North property (“PLN”) and for general working capital purposes.
Being as they’re responsible for 10% of the property’s work, I can’t see that unless Fission suddenly plowed $10m into the property.
And they already covered working capital needs with the previous raise.
In addition, the Company is currently reviewing opportunities to acquire interests in other uranium projects in the Athabasca Basin, Saskatchewan.
Yeah they are.
So let’s go to the stock chart and see if anyone else has noticed.
(Pepsi spit take)
Let’s go deeper.
Now we know why that private placement was so easy to fill: The stock was twice the price of the financing amount over the last week.
You think something’s afoot? Me too.
At the current $0.16 share price, which is 113% more than the raise, and 300% what it was a year ago, Azincourt has a $2.5 million market cap. If warrants start coming in, that’ll be another $600k landing in the war chest.
So here’s a company with only 14m shares out (24m after the raise, which is still tight), with $1m+ in cash in hand and $600k coming soon, and what are they doing again?
In addition, the Company is currently reviewing opportunities to acquire interests in other uranium projects in the Athabasca Basin, Saskatchewan.
Picture this: Let’s say they have a nice target in mind. So they sign an LOI and announce it – the first substantive news out of the company since 2015. You think that $2.5 million market cap is going up?
Me too.— Chris Parry