Quinsam Capital (CNSX:QCA) reported a small positive result for the third quarter, as limited transaction activity and relatively quiet share-price movements across its investments left little to highlight in the period, according to the speaker identified as the operator on the company’s conference call.
The speaker said the portfolio became somewhat more liquid during the quarter, primarily because Pelican AI became publicly listed. The outlook for the fourth quarter is more eventful, with Quinsam’s largest holding, Peninsula, expected to begin trading publicly under the name RentX.
Peninsula listing in focus
Peninsula has filed its listing statement with Canadian authorities and is expected to trade in the last week of November, the speaker said. Because it is Quinsam’s largest holding, its share price will probably be the most important determinant of the company’s fourth-quarter results.
The speaker said Quinsam felt good about Peninsula’s assets and prospects but cautioned that the company had been private for several years, creating a risk that initial selling could put pressure on its share price. Peninsula has hired two investor relations firms, the speaker said.
Two other private holdings, Bon Intelligence and Longview Gold, are also expected to list in the fourth quarter or by the time Quinsam releases its fourth-quarter results.
Quinsam invested CAD 250,000 in Bon Intelligence at CAD 0.25 per share, while the company is conducting a qualifying transaction at CAD 0.50, the speaker said. Bon Intelligence has made operational improvements since Quinsam invested and is expected to trade shortly before Christmas.
Longview Gold has raised additional money as part of its qualifying transaction, and the speaker expressed optimism about its prospects. Quinsam’s investment in Longview was relatively small and probably not material overall, the speaker added.
The three listings are expected to move about CAD 0.02 of Quinsam’s private-company portfolio to the public side and leave the company with public securities in the vicinity of CAD 0.09 backing its net asset value, according to the speaker.
Updates on larger holdings
Responding to a question from shareholder John Lewis, the speaker highlighted California Nanotechnologies, EDM Resources and BluMetric as important public holdings.
California Nanotechnologies’ share price had risen over the prior quarter or so, and the company had announced its first commercial orders, the speaker said. The impact of those orders should begin to appear in its November-quarter results, which the speaker said could be released in January. The speaker also disclosed serving as a director of California Nanotechnologies.
EDM Resources is working to restart a previously producing mine in Nova Scotia and is awaiting a final fisheries permit, the speaker said. Once permitting is complete and its feasibility study is updated, EDM plans to sell the operation so a major company can bring it into production.
Quinsam bought EDM shares at CAD 0.11, the speaker said, and estimated a potential sale price in the CAD 2 area. The shares had traded around CAD 0.80 approximately 60 days earlier but had since fallen amid weakness in junior mining stocks. The speaker said Quinsam remained comfortable with the asset, team and plan.
For BluMetric, the speaker said the next results should show the impact of an acquisition and could help move the stock. The speaker expected to wait another six to eight weeks for news, with results anticipated in January.
Investment priorities
Asked by shareholder James Johnstone about sectors of interest as liquidity becomes available, the speaker said Quinsam was not targeting one particular sector. The company would prefer a reasonably established, less speculative business that is probably already generating cash.
That approach could favor technology or industrial businesses, the speaker said. A resource business could also qualify if it were producing or close to production, although the speaker expressed doubt that the broader resource sector would likely yield the type of candidate Quinsam seeks.
About Quinsam Capital (CNSX:QCA)
Quinsam Capital Corporation operates as an investment and merchant banking firm in small-cap market in Canada. The company primarily focuses on cannabis-related investments. Its activities include acquisitions, advisory services, lending activities, and portfolio investments. The company was incorporated in 2004 and is based in Toronto, Canada.
