CAF - Canaf Group Inc.

Discussion in 'Stock picks and trading strategies' started by goldismyfriend, Jan 3, 2018.

  1. goldismyfriend

    goldismyfriend New Member

    Price: $0.07
    Common Shares: 47,426,195
    Options/Warrants: Nil
    Insider Holdings: 15,391,328 or 32.5% as per

    Financials (All in US Dollars – Should Be Converted into CDN Dollars for accurate value)

    Cash: $671,367
    Trade Receivables: $907,084
    Income Tax Receivable: $27.960
    Sales Tax Receivable: $1,575
    Inventories: $504,600
    Prepaid Expenses: $39,166
    Property & Equipment: $1,202,245
    Intangible: $1
    Total Assets: $3,353,998 (USD)

    Trade Payables: $732,024
    Sales Tax Receivable: $39,234
    Income Tax Payable: $958
    Current Bank Loan: $78,590
    Total Bank Loan: $411,488
    Total Liabilities: $1,262,294

    Q1 2017 Results
    Sales: $2,991,706
    Net Income: $198,221 USD

    Q2 2017 Results
    Sales: $3,490,753
    Net Income: $236,961 USD

    Q3 2017 Results
    Sales: 1,961,208
    Net Income: $187,796 USD

    Nine Month Results (2017)
    Sales: $8,443,667
    Net Income: $622,730 USD

    Earnings Per Share:
    $622,730 USD X 1.235(rate today) = $767,490 CAD

    $767,490 CAD / 47,426,195 (shares) = $0.016 CAD earnings per share

    MD&A Highlights

    After an extremely positive and profitable first two quarters to the financial year, Q3 reflects an expected short-term period of depressed Sales, and subsequent reduction in earnings. Despite Sales reducing significantly for the period, the Corporation remained profitable, again demonstrating its resilience in difficult trading conditions. Sales are expected to increase slightly for Q4 and Q1, 2018.

    Revenue for the 9-month period increased to $8,443,667 in comparison to $2,907,198 for the same period last fiscal year. The Corporation recorded a net income of $595,716 (C$741,080), in comparison to a net loss of $335,864 for the same period the previous year. Adjusted EBITDA rose to $881,885 (C$1,097,080) for the period.

    The Corporation continues to understand that for Southern Coal to reach its full potential, its customer bases needs to increase so to reduce its reliability on key suppliers. Southern Coal is continuing to work with a new potential major customer to supply product in South Africa and remains hopeful for trial loads to be dispatched in Q1 or Q2 2018.

    The board believes that it is in the interest of the Corporation, and its shareholders, that Southern Coal (Pty) Ltd., achieves a Broad-Based Black Economic Empowerment, (“B-BBEE), Level 4 rating during the fiscal year 2018. During the quarter the Corporation can confirm that it has had discussions with its customers over the need for Southern Coal to improve its current B-BBEE rating so to remain compliant with its customers own supplier requirements. During the coming three months, the Corporation expects to announce the details of a deal that is currently being negotiated and finalized by specialists. All in all, the board is of the belief that the final deal that will be agreed will be one that will ensure sustainability and offer growth opportunity for the South African business.

    The Corporation intends to continue to generate positive free cash flow during the fiscal year-end 2017 and will focus on increasing shareholders’ value, as well as investment to improve the efficiency of its older facilities, or investment into related business opportunities in South Africa

    The Corporation has an agreement to lease premises for its coal processing plant in South Africa for a term of ten years, expiring on December 31, 2020. The agreement offers the Corporation, in lieu of rent, feedstock coal to be delivered to its adjacent premises, which it purchases at market price. Should the Corporation decide to purchase feedstock coal from an alternative supplier which the lessor is otherwise able to provide, then a monthly rent of Rand 200,000 ($14,846) is payable. To date, the Corporation has not been required to pay any rent for the premises as it has continued to purchase feedstock coal from the landlord.

    The bank loan bears interest at 9.25% per annum, matures on January 7, 2019, and is secured by the Corporation’s furnace acquired with the proceeds from the loan. The bank loan is repayable over 42 months in blended monthly payments of Rand 393,779 ($29,230 translated at October 31, 2016 exchange rate). During the period ended July 31, 2017, the Corporation incurred interest expense totaling $42,420 (October 31, 2017 – $71,721).

    In August 2006, Canaf, then known as Uganda Gold Mining, announced the termination of any further investment into its Kilembe Copper-Cobalt Project in Uganda. Since 2007, the Corporation has been involved in a legal dispute with Kilembe Mines Limited, (“KML”). In January 2013, the High Court of Uganda referred the case back to arbitration for settlement. On May 29, 2013, a preliminary meeting was held between the Corporation, KML and the arbitrator. The Corporation can confirm that further meetings were scheduled for August 2013, after filings of amended statements of defence and claims had been submitted. Since the initial meeting however the Government has awarded a deal to a Chinese Consortium to manage and operate KML. The Corporation’s appointed Ugandan Advocates have notified the board that the Arbitrator has stepped down for personal reasons. The Corporation’s Uganda Advocates and the Government’s Solicitor General have agreed to a new Arbitrator, Retired Justice James Ogoola. The parties held a preliminary meeting with the Arbitrator who requested them to provide him with their fee estimate for the conduct of the Arbitration. The estimate has since been provided to the Arbitrator who is yet to confirm whether or not he is agreeable to it. In the meantime the Corporation appointed SRK Consultants to prepare a brief document to quantify the ‘lost opportunity’ value of the termination of the Kilembe Project. During the current financial year the Corporation will utilize this document to assist in the submission of a revised claim against KML. The Corporation has received no new information since 2014, and the Corporation remains unable to give an indication of either the quantum or any likely date by which a settlement will or will not be reached. The original claim, before costs, is for a money sum of US$10,370,368 as at January 24, 2007.
  2. goldismyfriend

    goldismyfriend New Member

    CAF.V is starting to gain momentum as a bunch of news is coming down the pipeline in the next 60-90 days. Remember, this is easily the most undervalued earnings based company on the venture exchange. Trading at a 3.3X multiple(similar companies are 15-20X), and with an Asset/Debt Ratio of roughly 3:1, leveraged towards the USD. Just over 47 million shares outstanding with 33% insider held. CAF refines coking coal used for the steel industry, not typical coal that you find everywhere for burning. It's a special type of coal that only makes up 1% of the world coal reserves. BHP Bhiliton is Canaf's long term client and the largest producer of coking coal in the world, so it's very dependent even on a small company like CAF.

    What to expect in 90 days:

    - Year End Results February 2018
    - Q1 2018 Results March 2018
    - Update on a major deal that was announced in the MD&A

    CAF has already generating $1.1 million CDN in profit for 2017 over 9 months. In their MD&A it clearly states that Q3 was a weaker quarter and that Q4 2017 and Q1 2018 will have increased sales which will obviously generate larger profits. Recently South Africa had an election and the new leader is very pro business and could usher in major reforms to make South Africans companies more profitable.

    All information can be found on Sedar for those that want to confirm all this.
  3. goldismyfriend

    goldismyfriend New Member

    typo, $750K CDN profit over 9 months not $1.1 mil CDN.
  4. goldismyfriend

    goldismyfriend New Member

    CAF.V Subsidiary Information - Quantum Screening & Crushing

    Canaf Group owns 100 percent of Quantum Screening and Crushing (Proprietary) Limited, ("Quantum"), a private South African company that focuses on anthracite beneficiation.

    Quantum produces calcined anthracite, a product used primarily as a substitute to coke in the manufacturing process of steel and manganese. The company's two largest clients are world leaders in steel and ferromanganese production, namely ArcelorMittal and BHP Billiton respectively. Quantum has an operation near Newcastle, KwaZulu Natal, where its two kilns operate, de-volatising the raw material anthracite, known as calcining. The majority of Quantum's feedstock anthracite is supplied by the neighbouring Springlake Colliery, which has reserves in excess of 20 years.

    Calcining is a process whereby anthracite coal is fed through a rotary kiln, at temperatures between 850 and 1100 degrees centigrade; the volatiles are burnt off and the effective carbon content increased. The final product, referred to as 'calcined anthracite' is used as a coke substitute. Calcined anthracite is used as a reductant in the manufacture of steel and manganese, as well as other sintering processes. Quantum, through its wholly owned subsidiary Southern Coal (Proprietary) Limited, ("Southern Coal") has been profitably carrying on this business since 2004.

    Location and Plant

    Quantum is situated in Newcastle, KwaZulu Natal, South Africa. The majority of the feedstock anthracite is supplied by Springlake Colliery which has reserves in excess of 20 years, whose coal siding is strategically located adjacent to Quantum's facility.

    Quantum runs two independent lines of production which each consist of pre-heating stage feeding a main rotary kiln. The raw material, anthracite is feed into an electrically heated rotary pre-heater, which raises the temperature of the product to about 800 degrees C. The pre-heated (and red hot) anthracite is then fed into the main, refractory lined, rotary kiln. It is at this stage of the process that extra raw material is added to the main kiln. The temperature of the main kiln is then controlled to remain above 1000 degrees C so that calcination of the anthracite occurs and maximum amount of volatile matter is burnt off.

    The final stage of the process involves the oxidization of any excess volatiles in the after-burners/oxidizers, before emission to the atmosphere.

    Screening and Crushing Plants

    Since the Company acquired Quantum in 2007, significant investment has been made in crushing and screening equipment. Quantum now has the ability to offer existing and potential customers a range of size productsm which subsequently opens up other markets.

    Quantum has 2 independent screening plants, which are capable to dry screen down to sizes as small as 6mm.

    Profitability, Performance and Expansion Program

    Quantum Screening and Crushing has been operating profitably since the Company acquired it in 2007.

    Quantum Screening and Crushing has built up a fine reputation for product quality and reliability of supply, which has earned the respect and preference from two of the major steel and manganese producers in the world. Canaf believes that as long as Quantum maintains its focus on its core values, coupled with the ever-increasing demand of calcined anthracite as a replacement to coke in the reductant market, that the business will continue to expand and potentially become one of the major reductants and low volatile reductant suppliers on the continent.
  5. goldismyfriend

    goldismyfriend New Member

    2018-01-04 13:33 MT - News Release

    Mr. Christopher Way reports


    Canaf Group Inc. is deeply saddened about the sudden passing of Zenaida (Zeny) Manalo.

    Ms. Manalo was appointed chief financial officer of Canaf in June, 2010, and was a dedicated member of the corporation. She was much respected and liked by all who dealt with her and will be greatly missed by many. The corporation extends to Ms. Manalo's family and friends its deepest sympathies and is grateful for all the years of service she gave to Canaf.

    The company is in the process of identifying a replacement for the vacancy she leaves, and further announcements will follow in due course; in the interim, her duties are being taken care of by other members of the executive team.

    © 2018 Canjex Publishing Ltd. All rights reserved.
  6. goldismyfriend

    goldismyfriend New Member

    This director was on the CAF board for years, getting paid $40-50K USD and owning ZERO stock. The company needs to replace her with someone serious who is willing to take a share position and help grow the company.

  7. goldismyfriend

    goldismyfriend New Member

    Canaf appoints Sinclair director, CFO

    2018-01-09 17:49 MT - News Release

    Mr. Christopher Way reports


    Canaf Group Inc. has appointed Derick Sinclair as a director and chief financial officer effective immediately.

    Mr. Sinclair has more than 25 years experience in accounting and financial management. Mr. Sinclair received his bachelor's degree in commerce from the University of Windsor, Canada, in 1982 and has been a member of the Institute of Chartered Accountants of British Columbia since 1985. He began his accounting career in 1982 as an auditor with KPMG Peat Marwick Thorne and then joined BC Rail, at the time Canada's third-largest railway, as a treasury analyst in 1985. He progressed through BC Rail's finance department and served as its manager of general accounting. He served as a director of fleet management for BC Rail Ltd. from December, 1992, to March, 1996. He was appointed CFO of BC Rail's telecommunications spinout company in 1996, and stayed through two sales in 1998 to RSL Communications Ltd., a global telecommunications company, and in 2001 to SaskTel, a leading telecommunications company in Saskatchewan. He left SaskTel in 2003 to form DR Financial Services, which provides CFO and other services.

    Mr. Sinclair is currently the CFO for several privately held, Canadian Securities Exchange- and TSX Venture Exchange-listed companies. His experience as a financial executive with exemplary leadership and understanding of corporate needs and developments gives Canaf great confidence he will achieve a seamless transition replacing Zeny Manalo as the CFO.

    © 2018 Canjex Publishing Ltd. All rights reserved.
  8. goldismyfriend

    goldismyfriend New Member


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