Paradigm Picks Newsletter 2022/Jan/20
Happy New Year!
We are excited to get back to the markets and are looking forward to what 2022 has in store. There are a number of companies we are looking at and will keep you updated should they make the #paradigmpicks cut!
We have been reaching out to the CEO’s of our various investments to stay up-to date on their respective progress and initiatives. As always, due to legal reasons, CEO’s may be “tight lipped” regarding various questions, however provide a general sentiment for their projects going forward.
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Updates
A new acquisition of ours in the nutraceutical space is Quebec, Canada based Lumiera Health inc (TSXV: NHP)
The company owns three product lines under:
Holizien Laboratories: Herbal and tonics supplement division with approximately 20 years experience and 40 offerings in their product line.
Bazzzics a top seller of Holizen Labratories specializing in natural sleep aids. These products have most recently been listed for sale on Well.ca!
Away Pain Relief Cream A first of its kind, non-addictive topical cream with two active ingredients in Capsaicin and B-Caryophyllene. This product has been clinically tested.
All products approved for use by health canada.
Currently, the company is distributing its products throughout 130 locations in Quebec by way of:
Rachelle Béry,
Avril,
Tau,
La Moisson,
Concerning the rest of Canada, Lumiera is engaged with a distributor providing access to 2500 retail accounts and 2500 professional accounts.
In speaking with newly appointed CEO Carlos Ponce, multiple new contracts and discussions regarding expansion of existing distributors are underway. In addition, discussions are underway to enter the United States and European retail markets.
As some of you may know, Lumiera Health inc. (formerly Mondias Natural Products inc.) had run into organizational/managerial issues prior to Mr. Ponce’s appointment as New CEO approximately halfway through 2021. Since taking the reigns, Mr. Ponce has been involved with restructuring the company, from “trimming the fat” in so far as inefficient positions, staff, bloated salaries and the cancellation and renegotiation of unprofitable distribution contracts.
As a result of Mr. Ponce’s efforts, Lumiera has increased sales from November 2020 to November 2021 by 59% (press release). In addition, the company plans on being profitable by the end of fiscal 2022.
Given the deep discount of the current share price (0.015 CAD) in conjunction with Mr. Ponce’s concerted restructuring efforts, we believe an opportunity has presented itself. During restructuring, a company’s efforts are often forgotten or overlooked. We have taken a position with purchases at 0.015-and 0.02 anticipating a 2.5-3x by the end of 2022.
We believe that the current market cap of the stock is currently represented by previous management’s failings. Once word gets out regarding the strides the company is making under Mr. Ponce’s purview we believe a gradual re-rating will take place.
Please see Lumiera - MDA Q3-2021.V2 (sedar.com) for a detailed breakdown of private placements, salaries and operating costs in chronological fashion.
Taken from the MD&A (summarized):
On July 12th, 2021, the company closed a private placement which consisted of the issuance of 52,000,000 Units at a price of $0.025 per Unit for gross proceeds of $1.3 million. Each Unit consist of one common share in the capital of the Company and one common share purchase warrant, with each Warrant entitling the holder to acquire one additional Common Share, at an exercise price of $0.06 per share, for a period of four years from the date of issuance.
On October 8th, 2021, the company closed a Private Placement which consisted of the issuance of the issuance of 18,333,335 Units at a price of $0.030 per Unit for gross proceeds of $550,000. Each Unit consist of one common share in the capital of the Company and one common share purchase warrant, with each Warrant entitling the holder to acquire one additional Common Share, at an exercise price of $0.06 per share
In asking about treasury health and future private placements, Mr. Ponce stated in, part, that:
the company will look for additional funding only if a strategic acquisition which assists in building on current momentum to reach profitability presents itself.
Cross River Ventures CRVC : Touching .19 CAD at close on January 19th 2022, Cross River Ventures has surged back to life! We hope you all took heed of our conviction in this stock and continued to buy in the .12-.15 range. We were fortunate enough to average our position down to .165.
This momentum continues to be aided the resurgence of precious metals (especially gold) in recent days.
In addition, anticipation of CRVC’s planned 5000m Drill program at their McVicar Gold Project (Q1 2022) is certainly renewing interest as reflected in the share price in recent weeks.
Finally, CRVC’s issuance of .17 options to management etc prior to breaking ground on this year’s drill program is very telling. We believe this is a huge vote of confidence for what is to come.
Should the spot price of gold reach $1900 Oz USD, in conjunction with a successful drill program; we would not be surprised to see the share price return to the .50+ Range
Gold Mountain Mining Corp. GMTN : Since up-listing to the TSX, Gold Mountain Mining Corp has been under selling pressure falling as low at $1.18 CAD in January 2022 from highs of $2.22 CAD last year.
Despite this, we hope you took note of our tweets and added to your position at these value prices. It appears that up-listing to the TSX may have garnered unwanted attention of short sellers in the near term.
While an annoyance, this short selling has presented a fantastic opportunity. We believe the share price has been artificially suppressed in the short term.
The share price is currently trading lower than before the Mining permit was approved! In essence, the stock has continued to be de-risked while trading at a significant value. There has been no material change regarding this stock, and as such, we hold fast to our thesis:
This is a company with management that has a track record of completing their goals in a timely fashion. In addition, management is currently not drawing a salary from the company, opting instead to invest and reinvest all funds generated back into the company for maximum efficiency. As previously mentioned, The share price should additionally see a lift from the increase in gold prices as they continue to rise.
Azincourt Energy AAZ : It’s drilling season! Azincourt Energy has completed the majority of the preparation/infrastructure for their 6000m 30-35 hole drill program at East Preston this winter. In speaking with CEO Alex Klenman, Preparation for the drill program has been,
“coming along very well!”
We can also anticipate an update speaking to drill rigs on site shortly. With each passing drill program, we believe Azincourt energy is continuing to narrow in on a uranium discovery. We are happy to add in the .065-0.07 range as any discovery would most certainly result in a buy out. Stay tuned!
As always, seek professional financial advice and conduct your own due diligence prior to making any investment decisions,
Paradigm Market Research inc.
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If you have any further questions about these companies, please do not hesitate to contact us. We are more than happy to assist you with real-time, up-to-date information.