Greencastle Resources Ltd (TSXV: VGN) is a sleeper company that came on to our radar from one of our readers, Hamzah Ali Khan @HamzahKingKhan. The company is an investment / operating company with some really strong underlying assets.
They former focus was on Oil and Gas and mining properties, but have since branched out.
Greencastle is currently trading at ~$0.14 with 42M Shares outstanding giving a Market Cap of $5.8 M.
Last quarterly assets were at $5.6 million in assets with $700K in liabilities.
They have consistently been issuing a NCIB (Normal Course Issuer Bid) to reduce the overall number of shares, indicating that they believe the company is undervalued.
Last year they repurchased 1,377,500 shares.
Lets go over some changes since Sept 30 to their two biggest holdings
GreenCastles’s CEO, Anthony Roodenburg, is also on the Board of QCA and has participated in a number of their Private Placements. The share price in QCA has gone up significantly since Sept 30 When it was trading at $0.20 QCA is currently trading at ~$1.00.
Greencastle originally owned 600,000 shares at Sept 30, and then participated in their Private Placement in October for an additional 500,000 shares @ $0.15 and 250,000 Warrants @ $0.30,
They sold 600,000 shares (average price in December $0.50) in the open market before December 11 and then participated in the December Private Placement again for 1,000,000 shares @ $.25 and 500,000 Warrants @ $0.40.
If we add up the change in value of all of the shares and warrants we get:
500,000 Shares @ 0.15 (PP Oct) to current price ~$1.00- Change in Value = +$425,000
250,000 Warrants @ $0.30 (PP Oct) – Change in Value = +$175,000
Disposal of 600,000 shares (Sept 30th price of $0.20 to avg Dec price $0.50) = +$180,000
1,000,000 Shares @ 0.25 (PP Dec) – Change in Value = +$750,000
500,000 Warrants @ $0.40 (PP Dec) – Change in Value = +$300,000
Total change in QCA Asset Value from last Reported Earnings = +$1,830,000
Quinsam recently announced that they are doing another PP for $10M at ($0.60 share with a 1/2 warrant at $0.80) and we are assuming that they will be participating again.
Some more tidbits on QCA that we discovered which may have some additional upside. QCA also own assets in Delshen Therapeutics (Cannabis company) who’s parent company is 48North MJ, who are expected to go public soon (via TSXV: KRM.H – Kramer Capital Corp). Another catalyst for potential upside for QCA is that one of their legacy investments PMML Corp, recently won a full Isle of Man online gaming license.
Greencastle own approximately 34% of the company shares (8M common shares) of Deveron, a full-service enterprise drone data company based in Canada with operations in the US.
They recently announced a partnership with Climate Corporation, a subsidiary of Monsanto Company. Deveron will use their drone technology alongside Climate Corps digital agriculture platform to deliver farmers advanced aerial imagery data combined with powerful analytics.
Deveron recently hired leading IR firm First Canadian Capital to help get their story in front of a larger investor audience. The UAV industry is booming and if we look at the price appreciation of one of their competitors, Global UAV Technology, who recently had a successful quarter, means that more upside could be coming once Deveron becomes on investors radar.
Deveron’s Sept 30 close price was $0.265 and currently trading at $0.36.
The change in value of Greencastle’s 8M shares investment since last Earnings Release is ~+$760K
Combining the change in value of these 2 investments equals an positive $2.6M since last report date which was $5.4M (including $2.1M Cash).
The current asset value could be around $8M ($5.4M + $2.6M)
If Greencastle is able to keep their liabilities in check ($700K last quarter), there is potential for increase in share price to align with the new increase in investment asset value
Fortune Favours the Bold
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