We can't believe that UIS stock price has not ballooned after Mr.Norrie's speech to the AGM and the opening of the plant.
After two years and overcoming all the negative opinion that they could never accomplish it, they have successfully created a great facility to develop one of the largest and finest grade silica deposits in the world.
Yet, hardly a bump in the stock price.Obviously the word has not gotten out to the Brokers and investors what a tremendous opportunity this is.No romance in silica?No dot com in their name?
We know that Mr. Norrie will be going on dog and pony shows in eastern Canada in the Fall but where are the analysts and business writers now?Isn't it the job of business writers and Brokerage Houses[full service] to "discover" these type of major plays BEFORE the whole world knows about them.Or are the threads of the internet the new breeding ground in the discovery of undervalued companies.We are coming more and more to believe the latter.By the time the business journals and Brockerage houses latch on to the play,the investors from the threads have made their investments and will reap the benefits.
Following are some of the aspects of Mr.Norrie's speech , which we feel justify our enthusiasm.
Following was taken from UIS website.
ANNUAL GENERAL MEETING - PRESIDENT'S
MESSAGE
"WHAT A PLEASURE IT IS TO STAND BEFORE YOU
TODAY AND PERSONALLY ANNOUNCE TO YOU THAT
ALBERTA'S NEWEST SILICA SAND PLANT IS UP AND
OPERATING.
THE COMPANY ANNOUNCED THIS
MORNING THAT THE COMMISSIONING PHAZE OF
THE PLANT IS COMPLETE
I AM GOING TO LET YOU ALL IN ON A SECRET THAT
MY BOARD AND I HAVE KNOWN FOR A LONG TIME.
IT ALSO HAS BEEN KNOWN BY OUR INVESTMENT
BANKERS AND TRADITIONAL BANKERS FOR SOME
TIME NOW AND ANSWERS IN PART WHY A START-
UP COMPANY CAN RAISE EQUITY MONEY ON A
BOUGHT DEAL BASIS AND BORROW SEVERAL
MILLIONS OF DOLLARS FROM THE ALBERTA
TREASURY BRANCH. BY VIRTUE OF THE PLANT UP
AND OPERATING - THE SILICA SAND DEPOSIT IS
NOW A BANKABLE ASSET. WE HAVE THE ABILITY
NOW TO LEVERAGE THIS DEPOSIT WHEN WE SO
DESIRE FOR HUNDREDS OF MILLIONS OF DOLLARS
FOR THE INVESTMENT IN SECONDARY AND
TRESARY INDUSTRIES IN RETURN FOR LONG-TERM
SUPPLY CONTRACTS OF SILICA SAND. "
It should be pointed out that they already have in place, Contracts for all the frac sand this plant can produce this year.Even, what was considered ,at one time, as disposable sand after filtering has turned out to be a money maker as it is being sold to sandblasting companies at a significant source of revenue to the company.
" WHETHER WE USE 48
MILLION TONNES OR 200 MILLION TONNES, AT A
CONSERVATIVE $10 PER TONNE, HUNDREDS OF
MILLIONS OF DOLLARS ARE NOW AVAILABLE."
This, to our knowledge is, the first time that the Company has publicly acknowledged that their estimated reserves are probably going to be elevated to proven reserves of 200 million tons.And explains why they have applied for Government approval to increase the amount of tonnage to be processed annually.
It also notifies their shareholders , that there will be no need to dilute the stock through PP as all necessary funding to build out the facilities to maximize the use of the silica and other ingredients of the plant products in all their planned products-such as silica shakes, shipment of silica to glass manufacture and whatever other products their R&D affiliates can imagine,is available through bank loans.
" OUR SILICA SAND SHAKES ARE UNDER TEST
CURRENTLY AND APPROPRIATE ANNOUNCEMENTS
WILL BE MADE WHEN APPROVALS ARE RECEIVED."
We were surprised that Mr.Norrie did not elaborate on the glass shingles product[of which they already have a signed 30 million dollar contract] except to assume that since the enviromental studies by Canada and USA has not yet been completed and approved and he is saving that topic until they have the approvals in writing.This, our sources say, could be as soon as a month away.Then a plant will be estabished, probably in Calgary ,to begin production.As indicated above, the financing of such a venture is now assured .
"IT IS ONLY A MATTER OF TIME BEFORE THIS WILL BE
REFLECTED IN OUR STOCK PRICE. MY
MANAGEMENT TEAM AND I WILL BE GOING ACROSS
THE COUNTRY THIS FALL TELLING THE UNITED
STORY AND I HAVE ACCEPTED FEATURED
SPEAKER ENGAGEMENTS IN OCTOBER AND
DECEMBER IN VARIOUS INDUSTRIAL MINERAL
ORGANIZATIONS BASED IN TORONTO AND
MONTREAL. THE WORD WILL GET OUT.
WE HAVE WORKED VERY HARD FOR TWO YEARS TO ACHIEVE THIS STATUS AND NOW
THE MAIN CHALLENGE WE HAVE NOW IS
MARKETING AND WE ARE READY. "
Let us hope so.If they are as successful in marketing as they have been in building the Company's potential, then we will have a real winner in our investment portfolio.This is a success story that should be well received in the business world.As it becomes reflected in their earnings, the stock will rise accordingly.
Congratulations to Management and to those investors who have supported this company-may both groups ,reap the rewards. |
