sculpin

Very interesting. Thanks for posting, Packer

Moved into the GMP.PR.C which is the floater. I would prefer the Aimia or Dundee 5 year resets to the GMP.PR.B.

Guess they needed a quick $38 million however they did sell close to the 52 week low.... Dundee sells 6.1M Dream Unlimited shares Dundee Corp (C:DC) Shares Issued 55,535,423 Last Close DC.A 11/23/2016 $6.14 Thursday November 24 2016 - News Release Mr. John Vincic reports DUNDEE CORPORATION SELLS SHARES IN DREAM UNLIMITED CORP. In accordance with regulatory requirements, Dundee Corp. has sold 6.1 million Class A subordinate voting shares of Dream Unlimited Corp. Dundee continues to hold 15,536,288 Class A shares of Dream representing an approximate 19.97-per-cent interest.

Maxim Power Confirms Sale And Liquidation Nov 11, 2016 7:58 AM http://seekingalpha.com/instablog/44534176-leefarnam/4932544-maxim-power-confirms-sale-liquidation TSX:MXG OTC:MXGFF With it's Q3 release, "STRATEGIC REVIEW Following the agreement to sell COMAX, the Corporation commenced consideration of various strategic and financing alternatives potentially available to MAXIM in relation to its investments in the United States and Canada. MAXIM currently owns and operates 446 MW of generating capacity in the United States and 156 MW of generating capacity in Canada. MAXIM also has permitted power generation development projects totalling up to 996 MW (refer to Growth Initiatives section below) and a permitted metallurgical coal development project in Alberta. MAXIM will provide updates as these considerations progress." Maxim also confirmed it's base estimated proceeds from the Line Loss Provision settlement with the Alberta Energy System Operator as $42m. Interest, penalties, and legal fees will increase this amount. "ALBERTA UTILITIES COMMISSION ("AUC") LOSS FACTOR DECISION On September 28, 2016 the AUC asserted its position through Decision 790-D04-2016 (the "Decision") on several preliminary matters related to remedy under Module C of Milner Power Inc.'s ("Milner") complaint relating to the Alberta Electric System Operator ("AESO") Line Loss Rule. The Decision confirmed, among other things, that the AUC's proceedings will establish compensation to Milner that will include an interest provision at the Bank of Canada Bank Rate plus one and one half percent, and that parties will not be compensated for their cost of participating in the proceedings. MAXIM's internal calculations are that overpayments of $41.8 million were made by Milner to the AESO over the period from January 1, 2006 to September 30, 2016. In recognition of the possibility of delays in determining the final remedy to Milner, Milner applied to the AUC on November 9, 2016 for interim relief. As at the date of this press release, the implementation date of the new rule under Module B and the amount and timing of compensation under Module C cannot be determined." As noted in my SA Article on Maxim, I originally estimated liquidation proceeds to shareholders to be between $5 and $6.50 CAD per share. However, since that time some incremental changes to the thesis have occured, namely: Trump - Weakening of the CAD vs the USD. Since the overwhelming asset value of the company is in USD, this provides incremental support to the estimated proceeds. Further weakening may push ultimate CAD proceeds to shareholders above the estimated range. - Surge in coal (met and coking) prices from reduced Chinese supply as the government curtails the most inefficient and polluting mines as well as what a Trump Monarchy may mean for North American coal demand. From a low of under $80 USD/ton last year, metallurgical coal is now selling for upwards of $200USD/ton. The value of Summit Coal, Maxim's permitted and shovel ready metallurgical coal mine, was previously valued at $0. It is now increasingly likely this mine is worth substantially more than $0. - The Alberta Government has proposed 400 MW of immediate green energy project tendering, with 3000 MW up to 2030 to be added. As a reminder, Maxim owns prime wind generation land in Alberta's Southeast with wind energy potential up to 200 MW. I previously valued this at 0 but now anticipate incremental value from obtaining a contract and then selling to an investor looking for regulated returns (Berkshire, CPPIB, etc.). As a reminder, every $55m in additional value adds $1 per share in value to Maxim's liquidation value. All in all, Maxim's thesis continues to proceed on track, with proceeds likely at the higher end, if not in excess of, my previously estimated range.

Coal price inflation could last years http://www.valuewalk.com/2016/11/coal-price-inflation/ Jefferies believes coal price upside could last years because China introduced the production caps to save its regional banks reeling from high exposure to a weak and fragmented domestic coal industry. China’s total debt exposure to coal could exceed three trillion yuan, with a third of it coming from banks. Game-Changing Coal Price Inflation China stands to gain from higher coal prices in other ways too. In theory, the inflation is a positive for its economy that has excessive debt, and coal shortages might be part of ongoing supply-side reforms that help eliminate inefficient capacity in other industries, including steel, Jefferies said. The Asian giant is the world’s largest producer and consumer of coal, accounting for half of global consumption, nearly two-thirds of it for electricity.

Prairie Provident - how long will it stay this cheap... Market cap is $73mm with bank line open at current time. Production is now 4,900 boed. EV/boed is an astonishing $15K. Also.... Undervalued: PPR trades at a large discount to our core NAV of $2.24/fd share and to our risked NAV of $2.60/fd share. On a 2017E EV/DACF basis, PPR trades at a 3.8x multiple. Mackie.... PRAIRIE PROVIDENT RESOURCES INC. PPR (CAD$0.82) – Target: $2.00 – BUY [PDF]Well Funded E&P Producer Overlooked By The Market 6 pages Action: Maintain BUY and 2.00 Target Price Prairie Provident Resources Inc. (“PPR”) holds a high working interest and operatorship in a large land base, with a primary focus on development of its covenantal oil plays within three core areas (Wheatland, Princess and Evi) located in Alberta. These assets offer multi-zone potential primarily targeting oil and liquids plays that offer attractive economics even in the current low commodity price environment. Details: Q3/16 Financial & Operating Results Production & Cash Flow: Average Q3/16 production of 3,038 boe/d was higher than our forecast of 2,795 boe/d. Cash flow of $1.8 million ($0.02/fd share) was in line our forecast of 1.5 million ($0.02/fd share). Note that on September 13, 2016 Lone Pine Resource Corp. (Private Co.) and Arsenal Energy Inc. combined to from Prairie Provident Resources Inc. (“PPR”). As such, Q4/16 will be the first quarter that reflects the potential of the combined entity. We forecast Q4/16 average production of 4,475 boe/d and $4.9 million of cash flow. Current production is approximately 4,900 boe/d and the company expects to place 4 more wells on stream before year-end increasing production to over 5,000 boe/d exit 2016. 100% Drilling Success at Wheatland: PPR drilled eight wells in the Wheatland area achieving a 100% success rate. The company has 6 wells drilled and cased and ready to be tied in, with 4 expected to be on stream before year end and 2 wells in Q1/17. Financial Flexibly: PPR has a $55 million credit facility with only $2.1 million outstanding as at September 30, 2016. Net debt including working capital deficit was $16.7 million. PPR plans to maintain a conservative debt to cash flow of 1.0x. This financial flexibility provides PPR the ability to quickly act on accretive acquisition opportunities as they arise. 2017 Production Guidance: Based upon a capex of $25 million to $35 million, PPR expects 2017 production to average between 5,300 boe/d and 5,800 boe/d with exit 2017 rate in the 5,500/boe to 6,000 boe/d range. Undervalued: PPR trades at a large discount to our core NAV of $2.24/fd share and to our risked NAV of $2.60/fd share. On a 2017E EV/DACF basis, PPR trades at a 3.8x multiple. Impact: Solid Production Base To Fund Organic Growth While PPR trades at a discount to both our core NAV, risked NAV and our EV/DACF valuation, we anticipate the stock to bridge this gap as the company exploits is large development drilling inventory and demonstrates substantial production and cash flow growth. With considerable financial flexibility we believe it’s likely that growth can be accelerated through the company through of accretive acquisitions.   By Bill Newman – 2016/11/09

The composition of the NCAV bothers me. They have 23 million in debt against 36 million in currents assets. But of the 36 million, 27 million is inventory and 6 million is AR. Strangely they appear to have no cash. Given who their customers are you really have to hope for industry recovery in order for them to recover the AR and sell the inventory. Bri-Chem to hold Q3 2016 financial results call Nov. 10 2016-11-08 11:51 ET - News Release Shares issued 23,632,981 BRY Close 2016-11-02 C$ 0.325 Mr. Jason Theiss reports BRI-CHEM ANNOUNCES THIRD QUARTER 2016 RESULTS CONFERENCE CALL Bri-Chem Corp. will hold its 2016 third quarter conference call and webcast to discuss Bri-Chem's results, outlook and related matters at 1 p.m. (EDT) on Thursday, Nov. 10, 2016. Details for the conference call are as follows: Date: Thursday, Nov. 10, 2016 Time: 11 a.m. MDT (1 p.m. EDT) Conference call-in details: 1-866-696-5910 or 1-866-696-5910 Passcode: 7329280 (for participants in North America) Webcast details: go on-line For all interested investors and the news media, the conference call will be available via webcast within the investors section of the company's website. About Bri-Chem Bri-Chem has established itself, through a combination of strategic acquisitions and organic growth, as the North American industry leader for wholesale distribution and blending of oil field drilling, completion, stimulation and production chemical fluids. The company sells, blends, packages and distributes a full range of drilling fluid products from 24 strategically located warehouses throughout Canada and the United States.

Have owned for very long time. Been a roller coaster ride with the most recent 2 years straight down. Sale of steel division in Summer 2014 allowed them to survive & become a pure play on fluids distribution. In a reasonable market with the cost cuts, efficiencies and new locations, BRY could easily achieve $20MM+ in EBITDA. Here is what Beacon wrote in November 2 years ago at the beginning of the drilling drop.... November 14, 2014 Bri-Chem Corp. (BRY-T) Q3 Cements Turnaround With Growing Sales and Profitability 12 Month Target: $2.75 (unch) Rating: BUY (unch) Bri-Chem reported inline sales and EBITDA that beat our expectations. Revenues were up 23% y/y to $53.3 million. The US fluids division grew 67% y/y to $21.6 million, while Canadian operations were down 4% to $23.1 million. The value-added packaging and blending segments generated sales of $9 million, up from $6.5 million a year ago. The results from Q3 confirm that the move to focus only on downhole fluids has increased profitability. Adjusted EBITDA came in at $4.9 million, up from $4.2 million one year ago and better than our $4.2 million forecast. EBITDA margin was 9.2%, the highest level in 2.5 years, with gross margins slightly better than forecast in Canada. Adjusted EPS came in at $0.07, just shy of our $0.08 forecast due to higher interest and taxes. Note that reported EBITDA and EPS included a $1.6 million FX gain, which we strip out in our adjusted figures. Despite the pullback in oil price recently, rig activity levels remain strong across most energy basins. We believe there remains a large market share capture opportunity in areas such as Texas and Oklahoma. Continued strong US growth means it is likely US sales will surpass Canadian sales for the first time in 2015. We are making only minor changes to our forecast, with upside available from acquisition activity. Strong Q3 results have provided a reprieve for the hard hit BRY share price. Despite rallying 29% yesterday, we view BRY as inexpensive trading at less than 5x 2015 earnings and a 19% discount to current tangible book. We are maintaining a BUY rating and 12-month target price of $2.75. We use 6x 2015 EBITDA and 9x EPS to reach our target. Analyst: Michael Mills, MBA, CFA 902.425.8897 mmills@beaconsecurities.ca

The composition of the NCAV bothers me. They have 23 million in debt against 36 million in currents assets. But of the 36 million, 27 million is inventory and 6 million is AR. Strangely they appear to have no cash. Given who their customers are you really have to hope for industry recovery in order for them to recover the AR and sell the inventory. Hence speculative. Was my main worry throughout the downturn - would they be able to reduce their inventory & collect AR's to repay their debt load - so far they have been able to achieve this in the worst circumstances. Now that US & Cdn drilling & completions are turning up this will help them - question that could be asked is what is the state of the remaining inventories & AR's?

Bri-Chem - potential multibagger at $0.33 and was > $4 back in 2012. (BRY -TSX) (OTC:BRYFF). http://seekingalpha.com/article/4021454-bri-chem-trades-cheaply-even-75-percent-move-2-months Bri-Chem Corp. (OTC:BRYFF) is a distributor of chemicals to the oil & gas drilling industry in both Canada and the United States. Because it is so levered to capital spending, it has high operational leverage to oil prices. This is a business that did over $180 million in revenue in 2014, trading at a $5 million market capitalization. That compares to $72 million of revenue in the trailing twelve months. At less than 60% of NCAV, it hits the Ben Graham Sweet Spot. http://www.brichem.com/

http://www.bloomberg.com/news/articles/2016-11-09/coal-resurgent-renewables-in-retreat-energy-after-trump-s-win Coal Resurgent, Renewables in Retreat After Trump Win If you want a snapshot of what the global energy map will look like under President Donald Trump, look no farther than the stock market. Glencore Plc, the world’s top coal trader, surged more than 5 percent on Wednesday. Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, plunged as much as 13 percent. The swing foretells a story of fossil fuels making a comeback, while the fight against climate change -- and investment in wind and solar power -- languishes. In his only major energy policy speech ahead of the elections, Trump said that he would rescind “job-destroying” environmental regulations within 100 days of taking office and cancel the climate deal reached last year in Paris. “A Trump administration will focus on real environmental challenges, not the phony ones we’ve been looking at,” Trump told supporters in May in North Dakota, the birth-place of the U.S. shale revolution. To be sure, Trump has offered few clues on how he plans to implement his plans. Energy and climate policy has taken a back-seat to immigration, the economy and debate about the candidate’s fitness for office. And some of his proposals are contradictory, like his pledge to boost both natural gas and coal, two fuels that compete against each other in the power generation market. Yet, few doubt who’s likely to win and lose, particularly as Trump can rely on supportive lawmakers in Congress to push his agenda. "The result is undoubtedly a blow for the renewable energy industry," said Matt Loffman, an analyst at energy consultant Douglas-Westwood in Houston. "The historic election result is perhaps welcome news for a hydrocarbon industry that has been on the ropes for over two years." Coal prices already are enjoying a renaissance after China, the world’s largest consumer, cut domestic production, forcing power plants to buy overseas. The cost of thermal coal in the Australian port of Newcastle, a benchmark for Asia, has more than doubled since January to a four-year high of $114.75 a ton. Shares of big coal miners such as Anglo American Plc, BHP Billiton Plc and Rio Tinto Plc rose between 2 percent and 4 percent on Wednesday. Wind turbine makers Gamesa Corp. Tecnologica SA and Nordex SE fell. As coal enjoys a comeback, the biggest loser could be fight against climate change. Under President Barack Obama, the U.S. rescued a two-decade old process the United Nations promoted to rein in pollution, forging a climate change deal last December. Along with China and more than 190 other countries, the so-called Paris agreement accord set out a framework for all nations to cut emissions. It would be difficult but not impossible for Trump to pull out of the Paris accord. While the Senate never voted on the Paris deal, it’s part of the 1992 UN Framework Convention on Climate Change, which the U.S. ratified under Republican President George H.W. Bush. Trump would have to renounce the 1992 treaty and risk bringing down the entire UN process to scrap Paris. The U.S. would have to give three year’s notice to withdraw from Paris. But Trump doesn’t need to cancel Paris to derail the process, effectively hampering the growth of renewable energy, analysts and campaigners said. Yukari Takamura, a professor at Nagoya University in Japan who has followed climate change talks for more than a decade, said the Obama administration took a lead that contributed "enormously" to the Paris deal. "Lack of such leadership might slow down the progress" by unsettling the investors who need to fund renewable developments, she said. As Trump shapes his energy agenda, the first clue about his priorities could come with his selection for secretary of energy. Obama surrounded himself with policy experts and academics such as Steven Chu and Ernest Moniz. Trump has relied so far on the advice of Harold Hamm, the founder and chief executive officer of Continental Resources Inc., one’s of America’s largest shale oil producers. Whoever his choice as energy secretary, the global fossil fuels industry, which over the last four years has been on the defensive, is likely to find a friend in the White House. "The oil and gas industry is a clear winner with the new president," said Alexandre Andlauer, head of oil at research firm Alphavalue in Paris. “U.S. Oil companies have a better future today than yesterday.”

MHY has no other assets of any value than that of Cline. Here is how I understand the holdings in Cline... MAR & MHY own both debt and the equity of Cline - these funds & 2 others managed by Marret for Ont Teachers essentially own 100% of the equity in Cline through both voting & non voting shares. No value in MAR or MHY is given to this equity & the current NAV represents the holdings in the 2022 zero coupon. The equity... TORONTO (July 17, 2015) – This press release is being disseminated by Marret Asset Management Inc. (the “Manager”), on behalf of certain accounts managed by it, at the address of 200 King Street West, Suite 1902, Toronto, ON M5H 3T4, as required by National Instrument 62-103 – The Early Warning System and Related Take-Over Bids and Insider Reporting Issues. On July 8, 2015, shares of Cline Mining Corporation (“Cline”) were received by certain accounts managed by the Manager, as disclosed below, pursuant to a Companies' Creditors Arrangement Act (Canada) plan of compromise and arrangement. The Accounts held certain debentures of Cline which, following the recapitalization of Cline, were exchanged for shares and additional debt (the “CCAA Plan”). The accounts did not provide any additional consideration to Cline as part of the CCAA Plan and the shares were issued as part of a compromise of debt of Cline. The following accounts managed by the Manager received securities directly in Cline, as set out below: Account # of voting/non-voting common shares % of class Marret High Yield Strategies Fund 6,878,247 non-voting 72.95% Marret Private Portfolio HY Trust 1,065,513 non-voting 11.30% Marret Resource Corp. 2,075,595 voting 48.05% As of the date hereof, the Manager has control and direction over accounts, including the above listed accounts, which, in aggregate, hold 4,319,306 voting common shares and 9,428,299 nonvoting common shares of Cline, being 100% of the voting common shares and 100% of the nonvoting common shares of the Cline. Immediately prior to the CCAA Plan, the accounts did not hold any equity securities of Cline. The debt in MAR.... 7,651,048 Cline Mining Corp., Zero Coupon, 2022/07/08 7,651,048 7,324,005 652,776 Cline Mining Corp., Zero Coupon, 2022/07/08 652,776 624,873 The Cline debt in MHY... 25,269,869 Cline Mining Corp., Floating Rate, 2022/07/08 25,269,869 24,189,708 2,247,916 Cline Mining Corp., Floating Rate, 2022/07/08 2,247,916 2,151,829 The restructure process here... http://cfcanada.fticonsulting.com/cline/default.htm Cline Sedar... http://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00007621

Q3 update from Marrett on Cline... Cline Mining Update Last quarter met coal prices had moved back up above $100/tonne and the market was improving. Due to environmental policies in China, these prices have now moved above $200/tonne and several shut in mines are exploring re-opening. Should prices stay above $150/tonne for a reasonable period, the salability of Cline increases significantly.

Thanks for starting this thread. Read O'Shaunnesy's book back about 20 years ago and from then on I have always looked for low price to sales anomalies across different industries. Worth a look or to find an updated study on these types of stocks. As well it is important in combining a deep value strategy with a momentum indicator - I guess it helps to keep one from getting stuck in value traps... However, it may come as a surprise that, according to the 50 years of mechanical investing research performed by James O'Shaughnessy and detailed in his book What Works on Wall Street, the single best statistic for finding undervalued stocks that will outperform the market is the largely ignored price-to-sales ratio. O'Shaughnessy set up a portfolio that bought the lowest price-to-sales ratio stocks and renewed them every year, then compared against other portfolios that used the more popular (and some would argue more meaningful) price-to-earnings and price-to-book multiples. Here were the annualized 50 year results of each strategy: Stocks with Lowest: Annual Return Price-to-Sales 15.4% Price-to-Book 14.4% Price-to-Earnings 11.2% Price-to-sales outperformed the others by a significant margin. Interestingly, price-to-earnings as the only criteria actually underperformed the market! The phenomenon of low price-to-sales ratio stocks as a good mechanical screening strategy is not completely unknown. Ken Fisher, son of investing legend Philip Fisher and a member of the Forbes 400 richest people in the U.S., wrote the book Super Stocks, where the entire focus of the book is on choosing low price-to-sales issues.

http://seekingalpha.com/article/4013223-zargon-oil-and-gas-underrated-underappreciated-heavily-undervalued

http://www.bloomberg.com/news/articles/2016-10-12/nippon-steel-said-to-agree-to-highest-met-coal-price-in-4-years Fourth-quarter supply contract said to be settled at $200/ton Spot prices almost tripled this year amid China output cuts Peabody Energy Corp. has scored the highest contract for selling metallurgical coal in four years after China’s effort to trim its coal output helped spot prices nearly triple this year.

http://seekingalpha.com/article/4011448-maxim-power-liquidation-final-innings Valuation Current EV of $240m CAD - $60m debt, $180m equity. France Sale - $70m CAD USA Sale - $220m - $290m CAD (after $10m CAD FERC fine) Canadian Business - $0m Summit Coal - $0m Alberta LLS Restitution - $40m to $50m Canadian EV based on Sale Proceeds: C$330m to C$410m Less Debt of C$60m Total Equity Value: C$270m to C$350m Per Share: C$5.00 to C$6.50 *Note: Sale prices of the US and French businesses would be somewhat in excess of book value, and so would incur some capital gains taxes, but would be mostly shielded by $15m in unrecognized capital loss DTAs. Maxim also hasoperating loss DTAs in excess of >$100m. ...While maintaining the optionality of the Canadian businesses being worth >$0. $55m CAD in additional value would increase Maxim's per share liquidation value by C$1.

Lowe’s Offers $24.00 for RON.PR.A / RON.PR.B This is from James Hymas' Pref Blog site - a great Cdn pref resource.....http://prefblog.com/ October 7th, 2016 Lowe’s Companies, Inc. and its subsidiary RONA inc. have announced: that Lowe’s, through a wholly owned subsidiary, and RONA have entered into a definitive agreement for the acquisition of RONA’s outstanding Cumulative 5-Year Rate Reset Series 6 Class A Preferred Shares and Cumulative Floating Rate Series 7 Class A Preferred Shares (collectively, the “Preferred Shares”) for C$24 per share in cash pursuant to a plan of arrangement under the Business Corporations Act (Québec). The board of directors of RONA, after consultation with its financial and legal advisors, has unanimously approved the transaction and has resolved to unanimously recommend that holders of the Preferred Shares (the “Preferred Shareholders”) vote in favour of the transaction at a meeting of Preferred Shareholders to be held to consider the transaction. RBC Capital Markets has provided a fairness opinion to RONA’s board of directors that, subject to the assumptions, limitations and qualifications set out in such fairness opinion, and as of the date of such opinion, the consideration under the transaction is fair from a financial point of view to the Preferred Shareholders. The transaction is subject to court approval and the requisite approval of the Preferred Shareholders. Assuming the required approvals are received, the transaction is expected to be consummated before the end of the year. Fidelity Investments Canada ULC, a large institutional investor that owns a significant portion of the Preferred Shares, has agreed to vote its Preferred Shares in favour of the transaction. The terms and conditions of the transaction will be disclosed in further detail in the information circular to be mailed to Preferred Shareholders in advance of their meeting to approve the transaction. In addition, a copy of the definitive agreement and the information circular and certain related documents will be filed with the Canadian securities regulatory authorities and will be available under RONA’s profile at www.sedar.com. So first of all: mea culpa. It looks like my recommendation at the time of the takeover was not optimal: I don’t understand the rationale that might support a higher offer. The post suggests it is because of “emails and phone calls from pissed off retail investors making a big stink about the whole situation.” Now, in this day and age of governance by Internet meme it may well be that the Public Relations department is perturbed. But from a hard-headed point of view, who cares? RON.PR.A represents cheap financing, it is unlikely that Lowe’s will be issuing equity of any kind in Canada in the future, and the $34.5-million additional cost to acquire at par isn’t chump change. I’ve been wrong before and I’ll be wrong again, but in this case I suggest that the rational course of action is to vote in favour of the Preferred Share Resolution. Be quick though, voting closes very soon! The safest course of action is, however, to sell on the market – the price is very close to $20 and such a sale would eliminate the potential for nasty consequences should either the common or preferred shareholders vote against their respective resolutions. When we take another look at the comparators I cited in that post: Ticker Issue Reset Spread Bid 2016-2-3 Bid 2016-3-8 Bid 2016-3-24 Bid 2016-10-8 MFC.PR.J +261 17.89 17.00 17.95 19.15 RY.PR.M 262 18.45 17.70 19.25 19.95 TD.PF.D 279 19.00 18.85 19.45 20.14 SLF.PR.I 273 17.45 17.10 18.00 18.99 BAM.PF.B 263 16.46 16.88 17.47 17.51 BMO.PR.Y 271 19.35 18.56 19.90 20.93 So, while there have been gains in the market since 2016-3-24, these pale beside the $4 pickup in the price of RON.PR.A. What I don’t understand is why Lowe’s is doing this. At today’s closing bid of 23.95, RON.PR.A yield 3.34% to perpetuity, the equivalent of 4.34% interest at the standard conversion factor of 1.3x. Perhaps the requirement to be a reporting issuer in Canada adds enough cost to make this a good financing play for them; perhaps there is also concern about not having a capital structure that US investors will consider ‘clean’. I don’t know. But one way or another, RON.PR.A (and the FloatingReset RON.PR.B) has provided a great deal of entertainment and food for thought this year!

Six small Canadian companies with takeover potential SHIRLEY WON Special to The Globe and Mail Published Friday, Oct. 07, 2016 5:00AM EDT The pick: Maxim Power Corp. (MXG-TSX) Close at press time: $3.15 a share 52-week range: $2.34 to $3.32 a share David Barr, PenderFund Capital Management Ltd., Vancouver Shares of this Calgary-based independent power producer have struggled but are now attractive as a liquidation play, says Mr. Barr. Maxim, of which insiders own a sizable chunk of shares, operates power plants in Alberta, the United States and France. In 2012, it announced a strategic review to maximize the value of its foreign units, but regulatory problems scuttled a deal to sell its U.S. assets. Maxim chairman Bruce Chernoff, a major shareholder who was appointed interim CEO last summer, is now “probably highly motivated to sell the assets and wind it up,” Mr. Barr said. Last month, Maxim struck a deal to sell its French assets. Recently, Maxim agreed to a deal with a U.S. energy regulator that could pave the way for a buyer, he added. “We think the company trades at a substantial discount to what the company could sell its assets for. We think Maxim is worth about $5 a share.” http://www.theglobeandmail.com/globe-investor/six-small-canadian-companies-with-takeover-potential/article32264654/

Coal has been one of the best performing commodities this year. Spot price of Australian coking coal, used to make steel, has surged to $US213.40 a tonne, according to the Steel Index, a data provider. That is double the price it sold for in mid-August, and almost triple its price at the beginning of 2016. Thermal coal, burned for electricity, has also rallied, and Australian prices are trading up almost 70 per cent on the start of the year. Prices have climbed because of cuts to production in China, which has traditionally produced much of the coal it needs for its steel mills and power plants. That has sparked a buying frenzy in the international market. China’s coal imports surged to 20 million tonnes in August, up 48 per cent year-on-year, according to the latest available data from the general administration of Customs.

Sculpin, Have you seen this provision? or is it something that was mentioned on the BNN segment? I'm asking because I took a rapid look at the prospectus, and it does not seem to be the case (limited to winding down of business.) I'd much prefer being wrong here, so do not hesitate to point out if I misread or missed something altogether. And thank you for the opportunity in the first place. Edit: Missed the "If" in Sculpin's post, so I think I have my answer. I probably should also point out that they seem to be able to recall the prefs only every five years. Again let me know if I err, not that familiar with preferred shares. He's wrong about the change of control because of the fact that they are only selling a 30% owned subsidiary (Richardson GMP). In any case there is also no change of control for these preferreds either if GMP Capital were to be sold or merged or whatever (one of the weaknesses of Cdn prefs that I would like to see changed) --- Look at what happened to the Capstone preferreds and the Rona ones. I pointed this out a couple of posts ago. Surprised that a hedge fund portfolio manager would go on TV, make this his top pick and have such a cursory knowledge of what he owns. Any comments or corrections to my understanding of this?

BNN yesterday... 2016-10-04 TOP PICK Jerome Hass Preferred Series B. He likes the preferreds, because there is a potential catalyst coming up where Richardson GMP is the wealth arm of it, and is owned by the Richardson family, GMP Capital and the investment advisors. There is an agreement amongst them where, after Nov 15/16, any one of the 3 parties can trigger a sale. From what he understands, all 3 parties want to sell the business. If there is a change in control, there are provisions within the Pref B shares that they get taken out at par value, which is $25. On top of that, you are getting paid 7% to wait.

Yes that is the safer way to play the potential of Cline. Hopefully Marret can do something with Cline - I can't imagine how they've been allowed to maintain such a large value in their NAV when the market has been saying it is essentially worthless for years now. Perhaps we get an answer sooner rather than later now that met coal is around $200 - from their most recent quarterly.... Cline Mining Update There have been no material events in the liquidation of Cline. The commodity environment has improved slowly as metallurgical coal has recovered to above $100 per tonne from the lows of just below $80. Chinese growth is still a wild card but the US Dollar has stabilized and has only traded sideways for the last few quarters. The Manager believes that if metallurgical coal rises to the $120-125 level, the sales environment for this asset would likely improve. And.... Cline’s focus remains on improving liquidity through the sale of non-core assets and the reduction of expenses. During the period, the company entered into an agreement to sell Cline Gold, which is expected to close in July 2016. The company has lowered headcount and further reduced its burn rate at the New Elk Mine. As the mine remains on “care and maintenance,” Cline management continues to sell used equipment into a challenging market. Sales of equipment and the non-core assets are being undertaken with an aim to maximize corporate liquidity until a buyer for the asset can be secured.

One is Maxim Power's (TSX - MXG) 18 million tonne approved met coal mine. Referenced here...http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/mxg-maxim-power-corp/msg276183/?topicseen#msg276183. Also see below... The other is the various Marret funds holdings in Cline Mining - referenced here.....http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/multibagger-speculative-ideas/msg272274/#msg272274. MHY.UN on the TSX is trading at $0.04 with a listed NAVPU (September 29, 2016): $0.727. Obviously the market does not believe Cline is worth anywhere near what Marret believes it is - with met coal now > $200/tonne an interesting speculation? The Private Portfolio consists of equity and bonds issued by Cline Mining Inc. (“Cline”). Cline holds various mineral assets, including the New Elk Coal Mine in Colorado, which has almost 630 million tonnes of in-place coal. Any others? Zero value attributed to Maxim's 100% ownership of Summit Coal makes it a potential valuable option in Met Coal - prices having spiked to $210US/tonne from $70/tonne in 2015. Believe the mining equipment purchased in the last 5 years still is stored there.... Pg 22 http://www.maximpowercorp.com/_html/investor_centre/documents/ShareholderPresentation2-Jun-16.pdf Summit Coal Limited Partnership ("SUMMIT") SUMMIT is MAXIM's development initiative located north of Grande Cache, Alberta that owns metallurgical coal leases for Mine 14 ("M14") and Mine 16S ("M16S"). Current estimates for M14 are 18.9 million tonnes of low-mid volatile metallurgical coal reserves with a mine life of 17 years based on the NI 43-101 Technical Report filed on SEDAR on March 21, 2013. M16S is located 30 kilometers northwest of M14 and represents 1,792 hectares or 29% of SUMMIT's total area of coal leases. A NI 43-101 Technical Report has not been prepared for M16S. M14 is permitted for a run-of-mine production rate of up to 1,300,000 tonnes per year. MAXIM has also received approval from the Alberta Energy Regulator to construct and operate a Coal Beneficiation Plant. This Coal Beneficiation Plant, to be located on MAXIM's existing M1 industrial complex, will bifurcate M14's run-of-mine coal into an estimated annual production of 950,000 tonnes of high-quality, low-mid volatile and metallurgical coal for shipment to export markets. These approvals provide SUMMIT with all of the requisite government and regulatory approvals to construct and operate M14. In November 2014, MAXIM received delivery of five pieces of mine equipment including two continuous miners and three shuttle cars. The units are in storage awaiting development of M14. $1 Coal Mines Become Jackpots After Prices Surge September 29, 2016 — 5:00 PM EDT Updated on September 30, 2016 — 12:26 AM EDT Vale, Sumitomo sold met coal mine to Stanmore Coal last year Metallurgical coal prices have more than doubled this year Buying bargain-bin coal mines amid the worst commodity slump in a generation has turned into a savvy bet as prices of the fuel surge. Stanmore Coal Ltd. bought the Isaac Plains metallurgical coal mine in Australia for A$1 in July 2015 from Brazilian miner Vale SA and Japan’s Sumitomo Corp. when the price of met coal, used to make steel, averaged the lowest in about a decade and just three years after the mine was valued at A$860 million ($659 million). One year later, spot prices have soared above $200 a metric ton as China’s steel mills crank out record volumes while its mines slow production. "It seems like we did get our timing right in this instance," Stanmore Chief Executive Officer Nick Jorss said in a phone interview from Sydney. "When we bought Isaac Plains, hard coking coal was in the $70s. We’ve had pretty substantial movement since then." Coking coal has surged almost 170 percent this year as output from China, the world’s biggest miner, tumbles under pressure from the government to cut overcapacity even as demand from steelmakers surges. Prices reached $210.80 a ton as of Thursday, according to The Steel Index. Stanmore, which has seen its share price double since the beginning of last month, isn’t the only miner who bought low. Australia’s TerraCom Ltd. last week completed the purchase of the Blair Athol thermal coal mine, also for A$1, from Rio Tinto Group as the world’s second-biggest miner exits some of its Australian coal portfolio. Thermal coal in Australia, while unable to match coking coal’s rally, has risen more than 50 percent this year. ‘Brave Enough’ Miners who struck deals before the recent price surge were well placed to profit from the unexpected revival, even if they’re small producers, said Robin Griffin, research director for global metallurgical coal markets at Wood Mackenzie Ltd., a consultant. "They were brave enough to make the call to try and make it work," Griffin said. "They wouldn’t have foreseen this spike, but they would have had a more optimistic view perhaps. So, in some respects, you could argue their gut feeling was justified." While the $1 headline price appears a bargain, Griffin notes the deals come with costly commitments. Stanmore is responsible for a $32 million obligation for the Isaac Plains mine, in Queensland state, while TerraCom is also on the hook for costs related to rehabilitating the mine. Quarterly Contracts Stanmore is targeting 1.1 million metric tons of coal a year from Isaac Plains, while TerraCom hopes to ship 2 million tons annually. Australia, the world’s largest coking coal producer, exported 186 million tons last year, according to Wood Mackenzie. Japan’s Electric Power Development Co., which owned Blair Athol with Rio Tinto and is known as J-Power, said it decided to sell its stake to a company that was willing to recover the remaining coal resources, according to a J-Power spokesman, who asked not to be named, citing company policy. Sumitomo Corp., Rio Tinto and Vale declined to comment. Stanmore’s Jorss expects coking coal contract prices for the fourth quarter to rise above $150 a ton, from the current quarter’s $92.50. Analysts at Macquarie Group Ltd. forecast deals will be agreed at $170 a ton, which is still far short of the record of $330 a ton in 2011. “If they have material to sell, the funds will just roar in this quarter,” Wood Mackenzie’s Griffin said. “If prices continue into the next quarter and into the first quarter of 2017, it will look like a master stroke." TerraCom Chairman Cameron McRae, a former Rio Tinto executive, said there were good bargains to be found in unwanted coal assets. "The extent of the commodity down-cycle has put a lot of miners under pressure and you’ve seen companies sell up because their balance sheets require it," McRae said. "When you see a significant down-cycle you will always see assets come onto the market." http://www.bloomberg.com/news/articles/2016-09-29/-1-coal-mines-turn-to-jackpots-as-china-s-cuts-power-price-rally

Yes the sale of Richardson GMP will not affect the ownership structure of GMP itself so there would not be any change of control. They would receive 30% of the proceeds of the sale of that business unit (rough guess about $150mm cash at the value that is being discussed). Just would be a very major rerating of their balance sheet such that the prefs would be much better credit. Perhaps the prefs would go from 7%+ yield down to 4% yield perhaps on the sale of this business unit. Perhaps GMP will try to buy back some or all of the outstanding prefs with the proceeds. The balance sheet is not too bad but the broker/underwriting biz in Canada has been very weak due to poor resource markets for last several years. Recently they merged with First Energy Capital (energy only Inv bank). Great counter cyclical move I think. Sale of their 30% RichardsonGMP stake will make them very solid.