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.
Previous coverage issued on June 2017, August 2017, October 2017, May 2018, October 2018, April 2019. and January 2020.
News Releases
Feb. 25 - On Track to Acquire Orillia in March, New Debt Financing Arranged, Private Placement Announced. To acquire 100% of the Speiran Quarry also referred to as "Orillia Quarry," in early March. It has been in continuous operation for more than 25 years and is licensed to produce 20,000 tonnes per year. It also was appraised by a 3rd party at $5.8M.
Rogue intends to sell the majority of Orillia production to the large buyers who signed the Intent to Purchase Agreements (“Intent Agreements”) with Rogue in 2019 (see Rogue’s August 26 and September 3, 2019 press releases).
Debt Financing
RRS.V secured $1.8M of new Debt Financing (secured against Orillia and the RRS.V's remaining assets) arranged with a leading Canadian, non-bank lender. The interest rate is prime plus 8.05% or 12%. In addition, Rogue will issue the Credit Group bonus shares equal to 10% of the New Term Facility, priced at $0.08 per common share. Rogue plans to draw the full $1.8M at Closing and the initial monthly payment will be due 30 days from drawdown.
Private Placement
Also plans to issue up to 3,750,000 units of the Company ("Units") at a price of $0.08 for $300,000 (Warrant at 0.20 cents).
Note that no Pre-feasibility or Feasibility Study of Mineral Reserves demonstrating economic and technical viability has been conducted with either the Orillia or Bobcaygeon quarries.
Feb. 25 - Update Call Scheduled for Thursday February 27, 2020 at 12:00pm EST
Mar. 5 - Secured $1.4M Equipment Financing led by Leading Equipment Finance Group. Identified and secured 8 pieces of equipment to operate the Bobcaygeon and Orillia quarries. The fleet is a mix of low hour used and new equipment.
Mar. 5 -Rogue Stone Update: Acquiring the Orillia Quarry. Has acquired 100% of the Speiran Quarry (east of Orillia, Ontario), also referred to as "Orillia Quarry" and intends to restart production and sales later this month.
Mar. 24 -Corporate Update: COVID 19 Response. Rogue Stone temporarily suspended its quarry operations at its Bobcaygeon and Orillia quarries today, in line with guidance from the government of Ontario.
Results for the quarter November 2019-January 2020 will be made public Monday, March 30, 2020.
Apr. 7 - Update: COVID-19 Virus Suspension Continues.
Apr. 8 - Update: Radio Hill Neighbour Discovers Nearby Gold, Rogue Prepares for Potential Summer Exploration. Radio Hill is an 1,800 hectare land package located along the western extension of the Destor-Porcupine Fault. The package is surrounded by the Pen Gold Project, amalgamated by GFG Resources (TSXV:GFG) in 2018. Within approximately 4km of Radio Hill, GFG announced this week 71.27 Grams of Gold per Tonne Over 8.5m.
Rogue has identified Exploration Targets and has a Permit in place to potentially drill the project this summer. RRS.V will initiate an analysis of the high-quality geophysical surveys completed since the acquisition of the Radio Hill property to identifying favourable geological and structural features that are known to host gold mineralization.
Apr. 17 - Corporate Update: Stone Quarry Operations Plan to Reopen. 1) Rogue Stone plans to restart its quarries, next week for Orillia and the week following for Bobcaygeon. Initially will supply Ontario infrastructure projects, preparing for re-opening of US markets. RRS.V is finalizing issuance of 2,25M bonus shares to the Credit Group (prev. announced).
Apr. 27 -Completes Sales post-COVID-19 Closure, Receives Government and Creditor Support and Announces Non-Brokered Private Placement. Rogue received the Government of Canada's CEBA, a $40,000 interest-free, government-guaranteed loan; Also negotiated relief with its Credit Group, highlighted by a 3 month deferral on payments.
Rogue is also initiating a $300K Private Placement, split $100K Non-Flow-Through and $200K Flow-Through. Placement: Up to 1,666,667 units at $0.06 per Unit (Warrant at 0.08 cents) for $100,000. Non-Flow-Through: Up to 2,857,143 flow-through units at $0.07 per FT Unit for $200,000.
May 11 - Update: Stone Sales Continue, Preparing for Potential Gold Exploration this summer at Radio Hill. Both the Orillia and Bobcaygeon quarries have restarted and completed sales post-COVID-19 Closure. RRS.V also applied for the Canada Emergency Wage Subsidy ("CEWS"); Analysis continues on the promising gold potential at Radio Hill. Closing of the Private Placement is expected to occur on or about May 29, 2020.
May 27 - Closing First Tranche of Financing; Full Fleet and Crews at Rogue Stone Quarries, Sales Continue. Gross proceeds of $160,740; $119,240 from Non-Flow-Through Units and $41,500 from Flow-Through Units. Closing of the Private Placement is expected to occur on or about June 11, 2020.
Orillia and Bobcaygeon quarries are now running a fleet of two wheeled loaders and two track excavators- one larger excavator for breaking the stone from the ground and a second, smaller excavator, for final shaping of the stone.
June 11 - Re-Allocation of Non-Flow Through and Flow Through Units for Current Financing. The TSX-V has approved a re-allocation between the Non-Flow Through Unit and FT Unit Offerings with the Unit Offering now including gross proceeds of $250,000 and the FT Unit Offering now including gross proceeds of $100,000.
TSX-V has approved extending the final closing of the Private Placement by 30 days until July 11, 2020. The Company plans to close a second and final tranche in the coming weeks, building on the first tranche which closed May 27, 2020.
July 10 - Sales Continue as the Stone Quarries Ramp-Up, Private Placement Closing Extended. Since the COVID restart RRS.V sold 3,340 tons of limestone from the Orillia and Bobcaygeon quarries totaling $300,400, averaging $90/ton.
The second and final tranche of the Private Placement is now expected to close on or about August 10, 2020.
Aug. 7 -Corporate Update: Private Placement Expanded: TSX Venture Exchange (the "TSXV") has approved an expansion of the ongoing Private Placement, from the original $300K to $510K. Rogue now plans to offer and sell up to 7,191,167 units of the Company ("Units") at a price of $0.06 per Unit for aggregate gross proceeds of $431,470 (the "Unit Offering") and up to 1,121,429 flow-through units of the Company ("FT Units") at a price of $0.07 per FT Unit for aggregate gross proceeds of $78,500 (the "FT Unit Offering" and together with the Unit Offering, the "Private Placement").
On May 27th, , 2020, RRS.V closed the first tranche: $160,740; $119,240 Standard and $41,500 from Flow-Through Units.
Today, the Company closed the second and final tranche of the private placement, receiving aggregate gross proceeds of $348,060. $301,060 from Non-Flow-Through Units at $0.06 (Warrant: $0.08) from the issuance of 4,675,517 Units and $47,000 from FlowThrough Units at a price of $0.07 per unit (Warrant: $0.08) from the issuance of 671,429 FT Units.
The proceeds of Non-Flow Through Units will be used for general corporate purposes and the proceeds from the sale from the FT Unit Offering will be used for Canadian Exploration Expenses, as defined in the Income Tax Act (Canada).
Aug. 19 -Announces new Board member, creation of Board Committee focused on Québec: A new ad hoc Board Committee will support Management, to try and unlock value from the Silicon Ridge project.
Summary
The last eight months have been eventful with Rogue Stone.
Debt Financing
RRS.V switched from a Canadian Bank ($850K Term loan; 60 months at 5.25%) to securing a $1.8M debt financing (secured against Orillia and the RRS.V's remaining assets) with a leading Canadian, non-bank lender. Terms were interest rate prime plus 8.05% or 12%. It also issued bonus shares (10% of the term facility) at $0.08 cents.
RRS.V also secured $1.4M Equipment Financing during this period.
Private Placement
In late February, RRS.V disclosed the intention to raise $0.30M. Due to Covid-19, the effort was postponed to late April. The objective was $.30M; $0.10M Non-Flow-Through (NFT, $0.06, Warrant $0.08 cents) and $0.20M Flow-Through (FT, $0.07, Warrant $0.08 cents). In late May, it closed the first trance with $160,740; $119,240 NFT and $41,500 FT.
At the time, RRS.V indicated that it was expecting to close the second tranche by June 11. However, on that day, it announced a "re-allocation" to $0.35M; $0.25M (NFT, $0.06, Warrant $0.08 cents) and $0.10M (FT, $0.07, Warrant 0.8 cents). On July 10, it extend the closing date to August 10. On August 7, RRS.V expanded financing to $0.51M.
Finally, on August 10, it closed the placement. $0.34M. $0.30M from NFT Units at $0.06 (Warrant: $0.08) from the issuance of 4,675,517 Units and $0.047M from FT Units at $0.07 (Warrant: $0.08) from the issuance of 671,429 FT Units.
Rogue Stone
Due to Covid-19, RRS.V was unable to fully restart activity as planned in March. It re-engaged in mid-April. On April 27th, the company reported initial sales. On July 10, RRS.V reported sales of $300,400 since the post-covid 19 restart.
Rogue Quartz
RRS.V recently appointed a new board member (with the intention to create an ad hoc committee) in the interest of unlocking the value from Silicon Ridge. The permitting issues with this project dates back to 2017.
Rogue Timmins
In Early April, RRS.V commented on GFG Resources drill results and disclosed the intent for a potential summer exploration. RRS.V updated the market once (May 11). No further communications on the matter were issued since.
In Short
RRS.V successfully pivoted from Rogue Quartz to Rogue Stone; Limestone (Armour, Step, and Flag) in 2020. Itwas able to achieve (a much larger) debt financing, as well as, equipment financing totaling more than $3M. RRS.V also resumed activity Post Covid-19 end of April and in early July reported $300,000 in sales.
As per last filing, Rogue Stone was deemed in "pre-commercial production stage".
The Company follows the guideline that Commercial Production begins once the project produces a designated percentage of planned output. Using industry norms, Rogue has determined that the “percentage” be >60% for three consecutive months. In the case of our two limestone quarries, our "planned output" will be the licensed rate of 20,000 tonnes per year, or 1,667 tonnes per month. Rogue considers the quarry will have reached "Commercial Production" on the first day of the calendar month immediately following three consecutive calendar months during which the quarry produces more than 60% of onetwelfth of the yearly licensed production rate. Once the Company has reached Commercial Production at an operation, it will report Revenue and Cost of Goods Sold, etc.
Until RRS.V meets the above criteria and reports on them, accurate market valuation will remain challenging.
As for Rogue Quartz, it continues to be an ongoing issue. RRS.V's Silicon Ridge permitting from the Quebec Government (MFFP) is still outstanding. The original response was received (August 2017), and delayed to Spring 2018, then "Autumn 2018". Unfortunately, RRS.V is still awaiting a response (3 years later). Hence, the recent action taken on August 19, 2020.
With Rogue Timmins, exploration aspiration for Radio Hill were addressed. To date, Rogue has not updated the market on its intent to proceed. Perhaps the "re-allocation" of the private placement away from FT shares were an indication.
Should RRS.V drop its intent with Radio Hill, it will be the second instance of a "false start" with Gold. A few years back, RRS.V entered in an LOI to acquire Golden Arrow which it later withdrew from. However, with nickel price on the rise, Langmuir could be an option for RRS.V to further explore at the appropriate time. According to the last MD&A.
Langmuir- represents an excellent exploration target for additional nickel sulphide mineralization beyond the existing 14.8 million pounds of nickel in 43-101 Indicated Resource.
Currently RRS.V continues to trade sporadically with low volume around $0.08 cents (warrant strike price levels). Despite the progress made with Rogue Stone, until RRS.V files its Q1 results, valuation is likely to remain static.
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