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In 2011 Peter Epstein, CFA, left a $3 billion hedge fund where he was a senior analyst to help increase awareness of a number of small cap companies in which he's invested in. Please see: epsteinresearch.com On TWITTER: @peterepstein2 Mr. Epstein formed MockingJay, Inc., a consultancy for... More
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  • Netolitzky's Skeena Resources Funded For 12-18 Months, Aggressive Drilling Commencing Soon

    Netolitzky's Skeena Resources Funded for 12-18 Months, Aggressive Drilling Commencing Soon

    Peter Epstein, CFA, MBA EpsteinResearch.com @peterepstein2

    As reported, Skeena Resources (SKE.V) (OTC:SKREF) announced an up-sized, non-brokered C$8.1 million capital raise with no warrants attached. This is a tremendous outcome that de-risks Skeena's Spectrum project by eliminating funding risk for the next 12-18 months. A number of institutions invested in this round and the prior one, and allows the company to actively pursue its dream list of drill targets with a comfortable cash cushion. On June 29th, Skeena received a 3-year drilling permit, began field work and camp construction, and is mobilizing two drills to the Spectrum high-grade gold project. Fieldwork, which commenced June 15, includes re-sampling of historic core, soil sampling and prospecting under the direction of Jacques Stacey, MSc, PGeol, Project Manager.

    In addition, geological mapping is being led by Dr. Jim Oliver, PGeo, consultant. Camp and drill pad construction is underway, and drilling is expected to begin on or about July 2nd. A total of 10,000 to 12,000 m of drilling in 50 to 60 holes is planned for this season, with holes averaging 200 m, and ranging from 50 m to 350 m in depth. The drill program has been designed to expand the historic resource, while other holes will test the East Creek zone and other outlying targets. A NI 43-101 resource estimate is expected to be completed in the fall of 2015.

    I see a good chance of Skeena delivering a solid maiden resource in the next 6 months and possibly a second one within 6 months of the maiden resource. In my opinion, if 1 million + ounces in a first or second resource report is achieved, the stock price of C$0.065 could double or triple by then, $0.065 would be a distant memory. Further, it's my understanding that due in part to the historic data, a meaningful portion of the next two NI 43-101 reports could be in the Indicated category. Readers of my prior articles [Here], [Here] and [Here] know the following.

    Skeena is drilling on a site with a non NI 43-101 compliant historical resource of 244k ounces of gold and has confirmed high-grade gold with its own drill campaigns (see below). The company's very valuable database of geological mapping, geochemical sampling, trenching and more than 100 diamond drill holes (>14,000 metres) and one adit on Hawk vein (278m of workings) makes the Spectrum Project more than merely an early-stage prospect. One of the foremost geologists on the planet, Ron K. Netolitzky, M. Sc, with extensive knowledge of the Gold Triangle of Northwestern British Columbia, is the Chairman and second largest shareholder. Add to the above facts, a large pile of cash on the balance sheet.

    Continue Reading Here.

    Jul 06 8:47 AM | Link | Comment!
  • Chairman Interview: Albert Scardino Of Immunovaccine Inc.

    Mr. Albert Scardino, Chairman of the Board of Immunovaccine Inc. (IMV.TO) / (OTCQX:IMMVF) (market cap ~ C$ 80 million) was kind enough to take time from his busy schedule to allow me, Peter Epstein, CFA, MBA to interview him. I met Mr. Scardino in New York last week and was intrigued by the story. I have no prior or existing relationship with any company listed herein. Readers and investors should take care to conduct their own due diligence and consult with their own investment advisors before buying or selling any stock. This stock is speculative and may not be appropriate for all investors. I conducted this interview by phone and email over the course of the 3 days ending June 24th. Immunovaccine Inc. has a terrific website and newly updated corporate presentation.

    Please describe in layman's terms, Immunovaccine Inc.

    We are developing strong, fast, long-lasting vaccines for cancer and infectious disease. Our lead product, a vaccine known as DPX Survivac, creates immune cells that attack more than 20 different kinds of cancer. These include most of the major hard cancers - lung, breast, ovarian, colon, brain, prostate - as well as many blood cancers.

    We have completed a number of safety studies that showed no systemic ill effects in humans. This year we will launch four Phase II studies, including lymphoma, ovarian and brain cancer, to show proof of concept. Our goal is to help turn cancer from being a killer to being a chronic disease that you can live with for many years, without pain and without symptoms. You would just have to show up periodically to have a shot to keep your cancer from coming back. I strongly recommend readers review our corporate presentation for considerably more information.

    Recognizing that this an open-ended question, not amenable to a concrete answer, how is Immunovaccine different from companies that you consider peers?

    Most of the companies in our sector are trying to find a way to stimulate the immune system to produce a certain type of blood cell that will kill cancer cells. We are the only company that uses oil as a delivery medium. Others use water, or, in the case of newly developing technologies, bacteria or strands of DNA. Still others use genetic engineering to manufacture these T cells in a lab, then introduce millions of these engineered cells back into the patient. Immunovaccine Inc. (IMV.TO) / holds international patents on the use of oil, for any vaccine for any disease in North America, Europe, Japan, Australia and Korea. Actually, the patent is somewhat narrower than that. It applies to any oil, with any liposome, with any antigen, and any adjuvant, for any disease. So it is specific enough to define our intellectual property, but broad enough to cover hundreds of products that we could possibly launch from the oil-based platform.

    Water-based vaccines wash through the body in 24 hours, giving the immune system only that long to memorise the shape of the antigen. That limits the number of white blood cells that will be produced to fight the invading organism. Oil stays at the site of injection for 6 days, and the body reads the oil itself as an invader, sending a very high concentration of immune cells to the site to attack the oil. As it dissolves and releases the antigen, the immune cells pounce. That creates an immune response many times stronger than the same antigen in water. Often one dose is sufficient to generate the response we need.

    In addition to the delivery medium, a vaccine must have an antigen. An antigen is the small bit of material that we want the immune system to identify as the foreign invader. Some vaccines use a bit of dead virus, or even live virus. Others use synthetic material that looks like the real thing but because it is synthetic it cannot multiply. We use a synthetic version of the survivin protein that appears on cells in more than 20 types of cancer. Survivin appears only on active cancer cells, not on healthy cells. We combine this survivin antigen with our oil-based delivery system to create the DPX Survivac vaccine.

    Survivin is one of the most common molecules in cancer, appearing in a very large portion of more than 20 cancers. Our research suggests that this particular vaccine would only work in cancers that have surviving proteins on their cells, but that is a very wide spectrum of cancers. Most other methods of immunotherapy in development are targeted at only a handful, or even a single, cancer. So with a broad antigen and a very powerful delivery method, we hope to become a common enabler for treatment of many patients, both early- and late-stage cancer sufferers.

    And our technology is scalable. Unlike personalised medicine, we are capable of producing tens of thousands of doses a day even in the prototype phase. The product is an easy-to-use vaccine, with a shelf-life of several years at room temperature, delivered in an ordinary syringe by anyone who has ever given an injection.

    You have six members on your Science Advisory Board, how involved is the Board and how does it interact with the company?

    Some of them are experts in specific diseases: Neil Berinstein for example is a lymphoma specialist and has helped us develop our program in that disease. Scott Halperin is recognised around the world as an expert in RSV, a respiratory disease in the elderly and infants that is the target of our first infectious disease program. Those human trials start in July. The scientific board works closely with our management team to design trials and to identify likely partners. And they help us to review our strategy and challenge our science often.

    Distinguished Board member Mr. Wayne Pisano is the former President and CEO of Sanofi Pasteur, one of the largest vaccine companies in the world. How important is his experience and role in the company?

    Mr. Pisano has spent his career in the pharma industry. When a microcap development company meets a pharmaceutical behemoth, it is easy for their languages to be misinterpreted. Wayne is masterful at helping us to understand what the thinking is on the other side of the table when negotiating collaborations and partnerships. And because of his corporate experience, he has been essential in our governance and compensation oversight.

    Please describe your foundational patent(s) and their significance.

    In addition to the broad platform patent described above, we hold a family of 34 patents and patents pending that protect each product, each time we combine an antigen with the oil to create a new vaccine. When we combine that vaccine with a new product in a combination therapy, another patent is created. And because no one else was producing vaccines in oil, we had to design a manufacturing system to do the job. That system is patented, too.

    Immunovaccine's 2015 catalysts are outlined on page 19 of your Corporate Presentation. What alternatives is Immunovaccine reviewing for a co-development agreement with a partner for DPX-Anthrax?

    The National Institutes of Health has been searching for a new vaccine to replace the current one in use for more than 40 years. The existing product requires at least three doses over five months to provide partial protection. The NIH sent us three different antigens from separate manufacturers and asked us to formulate a vaccine from each of the antigens. In tests they conducted, they found that all three worked equally well in producing a one-dose vaccine effective in 28 days, providing nearly 100% effectiveness and lasting much longer. These were studies in animals. We anticipate reaching a partnership agreement in the third quarter with one of the antigen owners to move a new vaccine toward human trials.

    What opportunities are you contemplating for clinical collaborations with commercial partner(s) in oncology?

    That's a great question. It is becoming very clear that the best treatments for cancer will combine a variety of therapies. There are more than 200 trials of combinations currently underway. We expect to enter multiple trials with multiple partners over the next 18 months. Successful results could lead to lead to collaborations and licensing deals in many cancers.

    What type of initial data might you receive from your Phase I DPX-RSV Trial and Phase II DPX-Survivac Lymphoma Study?

    We should see data from both our infectious disease trial and our lymphoma study by the end of the year. This will show first of all whether we are doing any harm, and then whether we are doing any good. We have to wait for results.

    To the extent that you feel your company's valuation is too low, what might be the reason(s) for its under-valuation?

    It's not easy attracting American investors across the border. Americans hate to trade in pennies; Canadians don't like trading in dollars. There is an old saying that if you aren't in New York, you are just kidding. Now that we have a QX listing and can market in the US, we hope to change that, at least for IMV (or IMMVF in the US). As we move toward a NASDAQ listing, that should change even faster.

    Are there any misconceptions about your company that you would like to address?

    On the markets side, I hope your readers understand that penny stocks are not necessarily more speculative on the Toronto Exchange than many immunotherapy companies on NASDAQ trading at $6 or $7 or higher. On the science side, there is an old notion that vaccines aren't for cancer. That perspective has already changed in the research community. It is beginning to change in the pharmaceutical industry, and it will be altered completely among investors in the coming year.

    Thank you for the chance to speak with you.

    And thank you Mr. Scardino for your time and thoughtful responses to my questions. As a reminder, Immunovaccine's corporate presentation is a great source for further information.

    I, Peter Epstein, CFA, MBA have no prior or existing relationship with any company listed herein. Readers and investors should take care to conduct their own due diligence and consult with their own investment advisors before buying or selling any stock. This stock is speculative and may not be appropriate for all investors.

    Jun 29 3:14 PM | Link | Comment!
  • Pershing Gold Up-Listing To NASDAQ, All Roads Leading To Higher Share Price?

    I, Peter Epstein, CFA, MBA have no prior or existing relationship with Pershing Gold (OTCQB:PGLCD) or any company mentioned herein. Readers should be aware that an investment in Pershing Gold is a speculative one. Readers should consult with their own investment advisors before buying or selling any speculative stock. I, Peter Epstein, own no shares of Pershing Gold at this time. I have owned shares in the past and might buy shares in the future.

    Nevada's Past Producing Pershing Gold, Pouring Gold Next Year, Up-Listed to NASDAQ, New Resource Reports Imminent, Economic Study by Year End

    Pershing Gold has had its fair share of skeptics. I hope that skeptics are falling silent. Why? Look no further than the demise of Allied Nevada and Midway Gold (NYSEMKT:MDW). By no means did I forecast that either would fail. However, with 20/20 hindsight, each relied to heavily on debt or debt-like capital. As a reminder, Pershing Gold has no debt. Midway and Allied Nevada have larger resource endowments than Pershing, growing their ounces in lock step with their debt. Little good it did them in the end. I've said in the past that Pershing continues to take measured, prudent steps towards production. Naysayers took this to mean that the company was moving to slowly. I disagree.

    Critics conveniently ignore the fact that gold was near ~$1,800/oz in early 2013, fell to ~$1,225/oz within 6-7 months, rebounded briefly to ~$1,400/oz and dropped to the $1,200/oz range. Instead of moving too slow, Pershing stepped back its exploration and development pace, leaving under-valued ounces in the ground. An internal economic scoping study this year with details of proposed production, costs, life-of-mine metrics, NAV, etc., the recently completed uplifting to NASDAQ and production next year should revitalize investor interest. The pudding from which the proof will be found is in the oven.

    To be clear, I don't mean to pick on Allied Nevada or Midway. Others that have struggled mightily. For example, Nevada Sunrise Gold (NEV.V) is down 81% from its 52-week high. [I own a modest number of Nevada Sunrise shares due to an analyst I respect recommending it]. Canamex Resources (CAC.V) has an option to acquire up to a 75% interest in the Nevada Bruner Gold project located in Nye County, Nevada. That stock has lost 78% of its value. I could list more fallen angles, but why kick Nevada dogs when their down?

    Pershing Gold's key assets, the past producing Relief Canyon Mine and its 100% owned processing facility, includes three open-pit mines, roads and power. The company's state-of-the-art, fully permitted and operational heap leach facility would probably cost $30-$40 million to replace and several years to permit. The plant has the capacity to process gold bearing solutions from the leaching of 8 million tons of ore per year and is permitted to stack 21 million tons. The facility is ideally situated to process ore from Relief Canyon and potential discoveries of satellite deposits on Pershing's 25,000+ acre property.

    Pershing's processing facility and existing infrastructure suggests both low remaining cap-ex and a shorter timeline to production. Not to state the obvious, but as Pershing's management says, the three easiest ways to achieve a higher valuation are near-term production, a growing resource and high leverage to the price of gold. Not only does Pershing have no debt, it has no streaming or royalties encumbering its flagship Relief Canyon Mine and no hedging of the gold price.

    Importance of Pershing's Growing Ounces to be Replaced With Key Operating Metrics as the Valuation Driver vs. Peer Producers

    Speaking of growing resources, not only is the number of ounces increasing, but the weighted average grade is improving as well. For those not paying close attention to recent drill results, suffice it to say that the grades in each set of reported assays has been getting better and better. That's no stroke of luck, but the work of one of the best development teams in Nevada. Notice that I haven't mentioned the name Steve Alfers? Relief Canyon is taking on a greater importance, carrying its own weight. Don't get me wrong, Alfers and two key financial backers got us this far, but Relief Canyon is poised to steal the limelight.

    Long-term and prospective investors alike should review Pershing Gold's new corporate presentation. It has been updated and enhanced significantly since I last wrote about the company. Pershing expects an upgraded resource report in a few weeks and another one within about six months. By then, the combined NI 43-101 compliant Measured, Indicted & Inferred resource should be in excess of 1 million ounces, most of which should be in the Measured & Indicated categories. A knock against Pershing has been a sub 1 million ounce resource. Once past 1 million ounces, detractors should move on to other gold companies.

    More important in my mind is that 1 million + ounces supports many years of production at an initial run-rate of 50k oz/year, growing over time to 80k oz/year. Cash flow from initial years could be used to self-fund additional drilling at Relief Canyon and searching for discoveries elsewhere on Pershing's property. The number of delineated ounces is rapidly becoming less crucial as a valuation benchmark. Once in production, Pershing will be compared on operating metrics, all-in costs, margins and production volumes, coming out of low-risk Nevada, to peer small and mid-tier producers globally.

    Finally, I point to the silver and gold colored Elephant in the room. Rarely is much ink spilled on the topic of Coeur Mining (NYSE:CDE) possibly acquiring Pershing Gold, but I continue to believe it makes sense. Now that the Paramount Gold & Silver acquisition is largely out of the way, Coeur should be (in my opinion) looking at its closest neighbor. Coeur can afford to outbid others because of the synergies the combined company would be able to achieve. Perhaps Coeur is waiting for production to start? If so, the acquisition price will only move higher.

    Coeur has done a commendable job at righting its ship. The stock price is up 71% from its low and debt is down modestly. If Coeur waits too long, it could face find itself in competition as the existing list of potential suitors is getting larger. Is Pershing Gold's (PGLCD) stock a triple from here? No. A double? Perhaps, depending on progress made and takeover interest over the next 6-12 months. Is the company going to fall off a cliff without a net, parachute or bungee cord? Not a chance. Unlike Midway and Allied Nevada, Pershing Gold retains considerable upside (with no debt) with minimal fundamental downside. I like the risk reward of that proposition.

    Jun 26 10:00 AM | Link | Comment!
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