KRO Update — BQ Metals

AUGUST 10, 2017

In the July issue of Katusa’s Resource Opportunities, I discussed the potential of BQ Metals.

It was the first published piece on the company, as the deal BQ Metals proposed wasn’t even closed at the time of publication in July.

I stated why I wasn’t going to participate in the financing, but hoped the company would close on the deal and I hope the market would correct 50-70% and we would buy stock under CAD$0.30 per share. 

That was the theory.

Recently, management decided not to move forward on the terms of the financing that the investment community was offering in mid to late July and the public vehicle, BQ Metals (BQ.H.VN) will not be used for the operating mine. 

The management felt that the value of the asset was much higher than what was currently being offered by the investment community and will continue to keep the asset private and fund the asset privately.

Nothing ventured, nothing lost. 

We didn’t buy any of the PP, and the public shell which is BQ.H on the TSX Venture exchange has been halted since late June, so nobody was able to buy the shares in the public listed BQ Metals.

We are sending this alert out because the deal is off, and we don’t want anyone buying any BQ Metals in the open market when it eventually starts to trade because it’s a shell with no assets.

Conclusion: Do not buy any BQ Metals if you planned on it. If you told your broker to buy some under CAD$0.30 when the company removes its halt, remove your buy orders.

We were the first to publish a report on the asset and this is a great example of the negative sentiment in the current resource sector. Proven management teams (Clive Johnson from B2 Gold and Derek White from Quadra) are not getting anywhere near the valuations in the public market for a deal they were willing to write cheques at personally. The Private Equity markets are willing to write those cheques. Historically, it was the opposite in the resource sector. Private Equity was much more conservative than the public markets in the resource sector. This is a good sign that we are near the bottom in the resource sector.

We are NOT buying BQ Metals as the deal is not happening. If anything changes, we will update subscribers.

-Marin