Rogue Resources (RRS.V) entails three divisions. Rogue Stone-selling quarried limestone for landscape applications; Rogue Quartz- focused on advancing its silica/quartz business with the Snow White Project in Ontario and the Silicon Ridge Project in Québec; and Rogue Timmins with the nickel resource at Langmuir and the gold potential at Radio Hill.
Coverage for was initiated June 2017, with notes on August 2017, October 2017, May 2018, October 2018, and April 2019.
Aug. 13 - Acquire Limestone Quarries in Ontario, ready for immediate operation, Debt Financing arranged, Private Placement Announced. Entered into agreements to acquire 100% of the Speiran (Orillia) and 85% of the Johnston Farm (Bobcaygeon) Quarries from Ontario-based private companies entering the Ontario landscape stone business.
The Speiran Quarry, located east of Orillia, Ontario, is permitted to produce 20,000 tonnes per year and has been in continuous operation for more than 25 years. The past five years have averaged $131/tonne in Revenue and $68/tonne operating expense on average sales of 2,722 tonnes per year. The Johnston Farm Quarry, located east of Bobcaygeon, Ontario, is permitted to produce 20,000 tonnes/year.
RRS.V plans to raise up to $0.8M in Equity, through a non-brokered Private Placement - 8M shares at 0.10 cents. Warrant at 0.20 cents. Closing of the Private Placement is expected to occur on or about September 13, 2019.
Aug. 26 - Acquisition Update: Potential Buyers Confirm Intent for 75% of the Permitted Production. Rogue has received signed Intent to Purchase Agreements from 7 large buyers for ~30,000 tonnes per year.
Rogue has now received signed Intent to Purchase Agreements from 8 large buyers for ~32,000 tonnes per year.
Additional Private Placement Details.
Rogue plans to issue up to 8,000,000 units of the Company (“Units”) , of which up to 1,500,000 Units are proposed to be distributed pursuant to the Existing Security Holder Exemption (the “Existing Holder Units”), at a price of $0.10 per Unit for aggregate gross proceeds of up to $800,000 (the “Unit Offering”).
Closing of the Unit Offering is expected to occur on or about September 13, 2019. The proceeds will be used to help fund the limestone acquisitions, as more particularly described in the Prior Release, and for general corporate purposes.
Oct. 25 - Closing First Tranche of Financing, Acquiring Bobcaygeon Quarry Resuming Operations Immediately.
1) Closing First Tranche of $401,600 of the Private Placement, 2) Received conditional TSXV approval of the acquisition of the fully permitted Bobcaygeon quarry and 3) Acquisition subject to the transfer of the permit and approval of TSXV.
"I'm excited to close this part of the financing, insiders bought in for this tranche, alongside new and existing shareholders who believe in the fundamentals of the Rogue Stone business", said Sean Samson, President and CEO of Rogue, "Buyers are looking for this stone in the Ontario market and we are excited to get moving with Rogue's Bobcaygeon Acquisition. We expect to have an additional update on Orillia and the continued financing in November."
Nov 7 - Closing Second Tranche of Financing, and Completed Initial Sales from Bobcaygeon Quarry. Closing Second Tranche of $220,000 of the Private Placement. Also an extension until November 22, 2019 to close additional tranches.
Initiates Market Making Service- Rogue has retained Mackie Research Capital Corporation (“Mackie”) to provide market making services to the Company in compliance with the policies and guidelines of the TSXV
The Orillia Quarry is permitted to produce 20,000 tonnes per year and has been in operation for more than 25 years. A $25K advance deposit will be held in escrow from December, with anticipated closing in early March.
Acquisition remains subject only to the transfer of the permit, payment of the remainder of the Purchase Price and final approval of the TSXV.
Completed the Permit Transfer and received Final Approval from the TSXV for the Bobcaygeon Quarry.
Mobilization of equipment, staffing and operations continue at Bobcaygeon Quarry with ongoing sales.
The Sellers shutdown 2019 operations at the Orillia Quarry last week, to prepare for the winter season. Based on the Agreement, Rogue expects to close the acquisition March 2, 2020 (the “Closing”), and Rogue Stone plans to immediately reopen operations for the spring 2020 landscape stone season.
Jan. 16 - Sales Continue from Bobcaygeon; Corporate: Radio Hill Consolidated, Update Call next Wednesday
Operations continuing at Bobcaygeon Quarry with sales of Armour, Step and Flag limestone - Payments received from clients for these sales and the business is advancing consistent with management's expectations.
Negotiated purchase of iron ore rights for the Radio Hill Project in Timmins, consolidating Rogue's ownership
A Corporate Update conference call will be held on Wednesday, January 22, 2020 at 12:00pm EST
Option Issuance - Granted an aggregate of 0.92M options ($0.065 cents) to Officers, Directors and Advisors of the Company, in accordance with the Company's shareholder approved Equity Incentive Plan.
Closes Private Placement - Reports that it has closed its previously announced private placement, launched on August 12th, 2019, raising a total of $621,600 by way of the issuance and sale of 6,216,000 Units (a "Unit") at a price of $0.10 per Unit (Warrants at 0.20 cents), and that it will not be closing any additional tranches.
Jan. 21 - Rogue Stone Update: more than 1000 tons sold from Bobcaygeon, Update Call Wednesday at 12pm EST
Sales continue from the Bobcaygeon Quarry, with more than 1000 tons sold through to the end of last week
All sales completed from the quarry; buyers coordinating freight with payment terms due within seven days
Product mix has been Armour-heavy so far, influenced by existing inventory, site cleanup and winter demand
Management expects that the product mix will evolve to include more Step and Flag and that Skidded will grow.
90% of sales to signatories of the Purchase Intent Agreements; Rogue is finalizing POs now
Sales terms for the quarry are straightforward, with ownership transferring at the quarry once the stone is loaded onto the delivery trucks. Logistics to the final destination (including customs, if required) are handled by the buyers and payment terms vary from payment upon loading out to a maximum of net seven days.
Jan. 23 - Investor Update Call January 2020.
Summary
In the last six months, RRS.V created a new business unit (Rogue Stone) with the acquisition of Speiran (Orillia, 100%), and Johnston Farm (Bobcaygeon, 85%) quarries and in the process entered the Ontario landscape stone business.
To fund the acquisitions, RRS.V conducted a series of activities; a Vendor Take Back (VTB, $0.7M), a $850K term loan from a Canadian Bank (60 months, 5.25%), as well as, a Private Placement; $0.62M of $0.8M intended (78%) at $0.10 cents; Warrants at $0.20 cents. Notable is the fact: 1) 80% of the Orillia and Bobcaygeon capacity have signed Intent to Purchase Agreements by eight vendors. 2) roughly a 25% insiders participation took place in the private placement.
RRS.V has received TSXV approval and completed the transfer of permit for the acquisition Bobcaygeon which has has been active through the winter. Futhermore, the closing to the Orillia acquisition is expected to be on March 2, 2020.
RRS.V also provided update on Rogue Timins (Radio Hill) and Rogue Quartz (Silicon Ridge and Snow White). The news of consolidation of Radio Hill is sensible as it is surrounded by potential suitors and may involved a future royalty deal ( 1.5% net smelter return interest) in the event of an acquisition. Otherwise, both Rogue Quartz properties are on hold. Silicon Ridge which has off-takes is awaiting permitting. Snow White which is permitted is awaiting off-takes.
Again, it needs to be outlined that the RRS.V was able to make those achievements by going into a cash conservation mode which involved no payments of staff salaries for nearly a year. These efforts have certainly not gone unnoticed. Thus, the issuance of stock options at $0.065 cents is understood.
As depicted in the chart above, valuation was on the rise prior the announcement of the acquisition but tested S2 on October 21 2019. On November 7, 2019, RRS.V hired Mackie Research Capital Corporation for Market Making services. To date, results are mixed as valuation remain static and trading sparse. Fact that RRS.V is currently below $0.10 cents suggests that the change in the revenue outlook may not be "priced in" as the Rogue Stone acquisitions are not yet fully closed. Moreover, the market may be awaiting some resolutions on one of the Rogue Quartz properties prior re-pricing.
Nonetheless, RRS.V will soon become one of a minority of minors with a positive cash flow, entering a new chapter.
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.
