Performance trials of this next-generation variety of Resonance carinata, AAC A110, delivered an average yield improvement of 7% compared to the existing Resonance carinata variety, AAC A100 (where yield is measured as the weight of the crop harvested per acre). AAC A110 also demonstrated an improved meal profile. The AAC A110 variety was developed and extensively field-tested over the last three growing seasons at multiple locations in Western Canada.

“The yield improvements from AAC A110 enables production of more oil for every acre planted, compared to the AAC A100 line. This further substantiates the value proposition for Resonance carinata to become the leading oilseed crop for the biofuel industry,” said Hugh Notman, CEO of Calyx. “Continuing to develop higher yielding varieties is a high priority for our company.”

Performance trials of AAC A110 resulted in yields as high as 44 bushels per acre. AAC A110 also resulted in an improved meal (the resulting byproduct of carinata after the oil has been extracted) profile. Resonance carinata produces a high-soluble protein meal that can be sold into the cattle feed market.

AAC A110 has the same seeding rates and crop inputs (fertilizer, weed and insect control) as A100, and costs the same to produce, treat, clean and deliver to farmers.

“Ultimately we get a better crop that results in even better land utilization, which has implications across the entire value chain,” Notman said. “Equally important is that the production and use of carinata as a fuel substantially reduces carbon and other harmful emissions.”

Beginning with the current planting season, AAC A110 will be the variety of Resonance carinata sold for commercial production.

About Calyx

Calyx Bio-Ventures Inc. (TSX VENTURE:CYX) is an agricultural technology company focused on renewable fuels including biojet and biodiesel. Calyx’s majority-owned operating subsidiary, Agrisoma Biosciences Inc., is producing a new proprietary non-food energy feedstock crop, Resonance® carinata, which yields oil that can be refined into fuels that work in existing engines as a 100 percent petroleum substitute. From seed to sky, fuels produced from Resonance® carinata substantially reduce carbon and other harmful emissions, and help to reduce global petroleum dependence. For further information about Calyx, please visit www.calyxbio.com. Resonance® is a registered trademark of Agrisoma Biosciences Inc.

Contact Information:
Calyx Bio-Ventures Inc.
W. Hugh Notman
President & CEO
604-689-2495
hnotman@calyxbio.com

Calyx Bio-Ventures Inc.
Keir Reynolds
Investor Relations
778-998-9242
kreynolds@calyxbio.com
www.calyxbio.com

Source: Marketwired (Canada) (May 15, 2013 – 8:01 AM EDT)

http://www.newstrikecapital.com/_resources/tech_report_20130508.pdf

Newstrike Capital maiden resource is big, shows signs of growing

Newstrike Capital has reported a maiden 43-101 resource estimate on its Ana Paula project in Guerrero, Mexico. It’s a noteworthy resource estimate for a number of reasons, yet coming in the midst of a chill in the TSX Venture market, the company’s share price hasn’t budged. In fact, the more than two million ounce gold equivalent resource caused a short-lived dip in share price from about $1.40 down to $1.27, which then recovered back into the $1.40 range.

The resource estimate, developed by Independent Mineral Consultants of Tucson, estimated the measured and indicated resource to contain 43 million tonnes of material grading 1.63 g/t gold, resulting in about 2.26 million gold-equivalent ounces (2.2 Moz Au at 1.59 g/t and 9.7 Moz Ag at grades of 7 g/t).*

The inferred resource was estimated at 1.8 million tonnes grading 0.89 g/t, containing 60,000 gold-equivalent ounces (50,000 oz of gold at 0.78 g/t Au and 1.1-million ounces Ag at 18.7 g/t).*

Using the calculators at www.rianalytics.com, the insitu value of the indicated gold alone is shown to be over $3 billion (using an 85% gold recovery and 23% silver recovery rate suggested in the report, at today’s metal prices).

Now let’s make some conservative changes to the tonnages and add reasonable cost estimates and see where we get with this new addition to potential mines in Mexico. Let’s use $1,200 per ounce gold and $20 per ounce silver in our calculations—precious metals bugs be damned.

We’ll remove the inferred ounces completely, so that we’re working with mining 24.6 Mt at 7.6 g/t Au indicated plus a measured resource of 18.4 Mt at 6.2 g/t. We’ll add $6 per tonne operating costs (similar to other heap leach projects in the region) and add $350 million in capital costs.

The result?

$1.7 billion dollars, net. At 10,000 tonnes per day, the mine life would be close to 12 years.

You can add a discount to this, because it’s early stage and not permitted and has a long way to go, but you still get excellent numbers.

Potential concerns with this project? Some may consider the the strip ratio modestly high at about 4:1, but a closer look at the resource estimate suggests that not all the material falls into this category and that, in fact, a good portion of it—more than 10 million tonnes of material—comes from a high grade zone that lies near to surface, with a much lower strip ratio. The average grade of this more than 10 million tonnes of potential ore is 3.83 g/t gold, which looks like a slam-bam-thank-you-ma’am starter pit if I’ve ever seen one. After conceptual operating costs of $6 per tonne that would be equal to $482 million recoverable value.

While none of these numbers are compliant with the regulations of NI43-101 (Canada’s regulatory system for disclosure for mineral projects) and should not be taken as accurate in any way, such calculations are useful—and necessary, I think. Newstrike is an early-stage exploration project that does stand up to early stage scrutiny.

In terms of future potential for growth, this one reminds us of SilverCrest Mines’ Santa Elena Project, which began as a 2,500 tpd heap leach operation and is now moving underground to get to the higher grade material at depth. Ana Paula would operate at a larger capacity of 10,000 tpd, but it’s high grades at depth do suggest a future underground operation. As well, the project is open in several directions, not to mention the fact that this is a huge project area, much of it still within the GGB, which has yielded so much already. If the Ana Paula deposit area is a needle in a haystack, history suggests there are others here.

Of course, this company isn’t about to take Ana Paula into production. They are elephant trackers, but they don’t pull the trigger. They track it, find it, put it in their sights, then call in the big guns.

Ana Paula is located in a great part of the world for mining, and is surrounded by other major projects—including one that this team discovered some years ago. Now owned by Torex Gold, the advanced stage Morelos Project with more than three million ounces is located about 12 km from Ana Paula.

Key senior members of the Newstrike’s current management and directors have participated in other Guerrero Gold Belt (GGB) discoveries, too, including Goldcorp Inc.’s producing Los Filos Mine, presently the largest producer in Mexico—although Goldcorp’s Penoles will soon take its place. Today Los Filos employs 2,100 people and produces in excess of 340,000 ounces of gold per year, from a total reserve of roughly 13,000,000 ounces of gold. And it’s a stone’s throw from Ana Paula, and a part of the same GGB.

And so a clear picture begins to emerge, of a team with a history of finding very large deposits, developing, and selling them (or being bought) and making investors a lot of money.

There is no shortage of producers in Mexico looking for accretive acquisitions today. Argonaut Gold is looking. Timmins Gold is looking. SilverCrest Mines is looking. Heck, First Majestic Silver could take a slight detour into gold after looking closely at this one. After all, now is a great time to acquire great projects that are clearly undervalued. In what other industry today are companies growing and simultaneously losing value? Only on the TSX Venture, methinks.

For investors, as the TSX Venture exchange hits new lows, the time is ripe to look for the bottom feeder deals, the ones that you can expect to surge greatly once the market gets over its current mania and returns to reasonable growth levels. (As long as the Venture exchange doesn’t get hit with a spring selloff in the meantime.)

Newstrike CEO Richard Whittall recently told me he was “very impressed” with the numbers.

“We’re a relatively conservative company and I don’t want to put a timeline on anything in terms of a Preliminary Economic Assessment, yet, but we’re very excited to be moving forward with a project that has so much potential and is so close to two of our great examples of success through teamwork—Los Filos and the Morelos Project.”

For me, it was a good sign that when I called the company in mid-afternoon on a Tuesday, Whittall answered the phone himself. Everyone knows: Management is key. Too often today, you call a company and reach an IR department that puts on airs. It’s a breath of fresh air to reach a CEO who doesn’t.

*Don’t NI 43-101 rules make saying complicated things that much more complicated?! It would be so much more straightforward to say: So far, the company has proved up about 2.3 million gold equivalent ounces, but those days are distant memories…

PGF is a wholly owned subsidiary of Paterson GlobalFoods Inc. (Paterson), owner of Paterson Grain.

Paterson is a private family-owned group of companies active in Europe, Asia, Australia, and the Americas.

Founded in 1908 and headquartered in Winnipeg, Manitoba, Paterson operates approximately 40 grain handling sites across the Canadian prairies, including nine inland export terminals.

The new long-term agreement appoints PGF as Agrisoma’s exclusive partner for Resonance® carinata, a non-food oilseed crop, in North America and Australia, and establishes a framework through which PGF and Agrisoma will coordinate expansion into additional regions.

Under the original agreement in 2012, Paterson was the exclusive contracting partner for the production of Resonance in Western Canada.

Paterson played a key role in the commercial production launch of Resonance in 2012, acting as the contracting partner for 6,000 acres planted and harvested last year at approximately 40 farms in Saskatchewan and Alberta.

Fifty acres were planted in 2011.

Under the new agreement Patersonwill manage the purchase of Resonance carinata production from growers and the subsequent processing and sale of product.

Agrisoma will be paid a royalty on sales generated from Resonance carinata, which will vary depending on the nature of the end products sold.

“Building a strong partnership between Agrisoma and Paterson strengthens our goals to cover a much broader geographical region,” said Dr. Steven Fabijanski, President and CEO of Agrisoma.

“As we expand the production of Resonance carinata, there isn’t a better company to work with than Paterson.

“They have been at the forefront of the grain handling business for more than a century and are leaders in seed sales, relationships with farmers, logistics, transportation, elevation and the sale of grain.”

“We are pleased to expand our relationship with Agrisoma, and pursue the potential of Resonance at a global scale,” said Andrew Paterson, CEO of Paterson GlobalFoods Inc.

“We have an unwavering commitment to bold innovation and new opportunities.

“We highly value our relationships, and Resonance offers farmers crop rotation flexibility, another source of income and a chance to participate in the flourishing bio-energy sector.”

“PGF provides a very important link in the biofuel value chain,” said Dr. Fabijanski.

“Paterson’s leadership in the grain handling industry expands our ability to scale Resonance carinata, and allows us to focus on our core competencies as a seed and technology company.”

“Resonance carinata has been specifically developed for production on semi-arid land such as the brown soil zone regions of Western Canada found in southern Saskatchewan and Alberta and other regions.

“The crop produces oil suited to industrial uses, such as biofuel production, and was the exclusive feedstock for the first 100% biofuel flight flown in October, 2012.

“The crop is vigorous and hearty, with good resistance to ecosystem stressors. Resonance carinata showed potential in 2012 by growing well under a variety of conditions that were less than ideal.” said Dr. Fabijanski.

For more information, call 613-323-3171.

Please take the time to join our new forum, the link is to the right just below the gold quote

or click here

http://calichebahada.com/phpBB3

thank you

caliche bahada

Flying high on renewable biofuel

The Gold Report: Merrill, you joined Industrial Alliance at a time when many junior companies are having difficulty getting financing.

In fact, newsletter writer John Kaiser reported that of the 527 companies exhibited at the PDAC International Convention this month in Toronto, 114 had less than $200,000 in working capital and about half had market caps of less than $20 million ($20M).

None of the companies that you cover are that low on cash, but one will need to go to market within a year or so. Is that a concern?

Merrill McHenry: That is a concern for many companies, but most of those that I have under coverage have enough in the till such that their development and/or exploration are fully funded for up to two years, in some cases much longer.

Minaurum Gold Inc. (MGG:TSX.V), for which I have a Speculative Buy recommendation, is doing a near-term raise for its maiden Vuelcos del Destino (Vuelcos) Guerrero Gold Belt (GGB) prospect. However, the company has exceptional assets; at least three are serious potential “company makers” I really like, with confidentiality agreements signed that could lead to a joint-venture with a major mining company at any time. The company’s senior management is some of the most accomplished in Mexico. Collectively they’ve discovered more than 200 million ounces silver (200 Moz), more than 8 Moz gold and have raised more than $400M in the capital markets for companies in Mexico.

Minaurum’s senior geologist, David Jones, discovered Los Filos, the main deposit of Teck Resources Ltd. (TCK:NYSE; TCK.A:TSX) at the time. Now it’s 13% of Goldcorp Inc.’s (G:TSX; GG:NYSE) production. He’s one of the world’s leading skarn and porphyry experts.

TGR: There’s a lot of geological and deposit-finding expertise in that company.

MM: Yes, there are actually three deposits that could be company makers. As I say, I would be surprised if two of them are not contending for material economic mineralization. There are actually six good projects in total.

TGR: Yet the shares are trading near 52-week lows. What’s the drag on Minaurum?

MM: The impending finance of its drill program in the GGB of Mexico at Vuelcos. It’s a given that publicly traded shares on most exchanges are going to be pressured going into a financing.

The Vuelcos project has some of the best-oxidized skarn and calc-alkaline retrograding, which is the cooling crystallization of the rock. Several different areas at Vuelcos look as attractive as most anything you can find down there. Even though it’s not blockbuster in total size, it’s a choice project with many attractive outcroppings of potential economic mineralization, and arguably one of the best looking exploration projects in the region. Anyone visiting the Vuelcos project, as well as analyzing the airborne and geophysics, I expect will understand why this project above all others was staked as the company’s lead GGB project by arguably the leading expert in the region, David Jones.

Minaurum has another project to the south, Santa Marta, that is a former producer from the 1960s that had 1% to 7% copper. A lot of the production was 4% to 7% and it has 11% copper outcroppings, exceptional surface outcropping, and airborne geophysics. Its mineralization at surface won’t require any overburden removal. There are majors looking at Minaurum’s Adelita project. I think that one will pan out as well this year.

It’s not typical to cover a company without a known resource. It is only because of the quality of the management and the quality and diversity of the assets with six projects, three of which I believe many an exploration company would be happy to work as a lone asset. There’s a surprising amount of substance to this company that the current small market cap completely misses, in our opinion. We believe in a more “normal” market environment the company would be trading at multiples of its current valuation, even in its current state. It’s not a single project, a one-trick pony with a binary outcome for the company.

TGR: What catalyst could lift Minaurum’s stock price?

MM: There should be drilling at Vuelcos early in the second quarter. At PDAC, I picked up a rock from the Vuelcos site and went into the hardware vendor area where there was an XRF machine. It peaked out the XRF machine at 15 grams per ton gold (15 g/t). I believe there’s gold there. It’s just a matter of how long the gold intercepts are and if it proves up an economic resource.

Minaurum is my absolute most leveraged story, but it’s for investors with a higher risk tolerance and diversification. It’s one of my favorites.

TGR: You specialize in the GGB and have an extensive geological knowledge of Mexico. Mexico’s ranked 10th in global gold production with 86.6 metric tons (86.6 mt) or roughly 2.78 Moz produced annually. However, Mexico’s year-over-year gold production is growing at almost 14%, the fastest growth rate in the world. What role does the GGB play in that?

MM: A role of great significance. Currently, the GGB is at 15.39 Moz in the Reserve category. The highest category, NI 43-101 compliant, is 34.2% of total gold Reserves in Mexico. We forecast, based upon the 10-year average, an annual growth rate in resources in the GGB of 600,000 ounces (600 Koz) a year, as well as 2.5 Moz being added by Newstrike Capital Inc. (NES:TSX.V)any day in its maiden resource estimate.

If Torex Gold Resources Inc. (TXG:TSX) was able to achieve an 85% conversion rate in its upgrade from resources to reserves, the total reserves in Mexico by the end of this year possibly, but certainly by next year, would be roughly 45.7%.

That’s not even taking into account that there are 30–40% more drill rigs operating in the GGB than there were one year ago.

Companies like Minaurum, Citation Resources Inc. (CTT:TSX.V) and Cayden Resources Inc. (CYD:TSX.V) are on maiden drill programs in 2013. Throw inOsisko Mining Corp. (OSK:TSX), currently operating three exploration drill rigs, on top of that and it’s much more than double the amount of activity that has gone on in the past in the GGB. We expect a transformative year for the GGB with a significant upward rerating.

We expect substantially more growth for total gold reserves in the GGB than the projection that I just gave you. The GGB currently has 20.59 Moz NI-43-101-compliant resources.

TGR: An interesting aspect about Mexico is the cost of production. You peg cash costs at about $325/oz (based on Thomson Reuters data) versus the industry average of more than $600/oz. That’s a pretty massive difference.

MM: In Mexico, because of the plate tectonics and the mineralogical events that occurred, many projects are oxidized instead of being sulfide. If they’re oxidized, as in the case of the GGB, a lot of the resources can just be dug up, trucked over to the leach pad and dumped. They don’t have to mill and use a lot of chemicals and processing in the milling. Quite often, you really can’t get much cheaper than the oxide resources that are prevalent in the GGB. It gives us some of the cheapest gold production costs in the world.

Moreover, with the 29% year-over-year mining industry cost escalation in the last seven years, companies need low-cost ounces. That’s what the GGB and district scale offer. Synergies in scale and mining resources bring low oxide mining costs even lower.

TGR: The GGB is a 40 kilometer (40 km) long trend?

MM: Osisko has staked 20–30km southeast of existing development and exploration companies, so it’s becoming more than double that size. It is a 70–100km long area. The intrusives that created the mineralization in the GGB are prevalent over a large area and therefore the GGB could—we expect will—extend significantly.

TGR: Is there land still available to stake along this trend?

MM: Osisko did a big land grab. It even grabbed a joint venture with Tarsis Resources Ltd. (TCC:TSX.V). I may be proven wrong, but thus far I believe that project’s rocks are not from the mineralizing tectonic era of roughly 62 million years ago. Dave Jones at Minaurum passed on Tarsis in the 1990s, so Osisko grabbed just about all the remaining land that has intrusives and airborne magnetic anomalies, many of which have varying geophysical structural controls and characteristics of others in the region.

TGR: Osisko has proven to be aggressive with the takeovers of Brett Resources and Queenston Mining. Do you expect Osisko to pursue a similar pattern in Mexico?

MM: It would make sense. It also makes sense for companies to leverage Goldcorp’s existing, or Torex’s planned mill, especially its neighbor Newstrike. Not everybody is going to build a mill and not everybody should build a mill. The synergies and cost savings will easily justify a fair amount of consolidation in the region.

TGR: Newstrike is burning about $1.1M a month. How much cash do you think it will have at the end of this year?

MM: It has roughly $28M in cash and is burning around $13M this year. It could run this year’s and next year’s drill program on the cash balance.

TGR: Newstrike is also expected to put out a maiden resource very shortly. What are you expecting?

MM: We anticipate the maiden resource estimate shortly. We’re expecting roughly 2.5 Moz on the in-pit resource, which is the amount calculated for the initial valuations that are in the NI 43-101. We expect the Ana Paula deposit could be mining 5+ g/t for more than five years. The global resource, what’s around the main pit, could be 4 Moz or more.

As a consequence, with a mill that could process 8,000–10,000 tons/day, it could have very robust economics with a higher internal rate of return up to, or over 40%.

TGR: Newstrike has said it really doesn’t want to develop this. It wants to sell it. Who are the potential suitors?

MM: The majors—Barrick Gold Corp. (ABX:TSX; ABX:NYSE), Newmont Mining Corp. (NEM:NYSE), and Goldcorp. Goldcorp is the first go-to company because it has a fair amount of mill operations down there. Osisko could become the second big player in the region. It believes it can find and develop resources cheaper than buying an existing company. I’d agree there’s a good chance for that, but there’s also tremendous leverage to be had in combining sunk mill site operations that we expect to strongly drive consolidation.

TGR: Newstrike has the largest land package next to Osisko’s big stake.

MM: It’s a very big land package. It has two exploration areas that it is working on. One is over the border by Torex, but has a 13km discontinuous oxidized skarn outcropping. We don’t know exactly the length of the intercepts and the amount of the grade, but there is quite likely some measure of gold along that 13km strike.

I expect that it will prove up other resources, as Torex is doing, and that could add significantly to the valuation of Newstrike and its appeal as an acquisition target for a major. It could have a fair amount of gold and a fair amount of grade over what it already has.

TGR: Torex, which has over a $1 billion ($1B) market cap, has more than 4 Moz in Proven and Probable reserves at the Morelos gold project. It has other promising projects as well. It worked out a $250M loan facility with several different banks. This is one of the brighter stories in a sea of doom and gloom.

MM: Torex is on third base, to use a baseball analogy. It has the economics—85% to 90% of the total value of capital expenditures and operating expenditures to go into production. South of the Balsas River in what’s called Media Luna, the company is having these phenomenal intercepts. It’s working with 11 drill rigs to prove up another resource and will likely more than double its current resource. There’s quite a good chance.

A couple of weeks ago, one of Torex’s holes intercepted more than 36 g/t over 26.7m—a phenomenal grade. It adds to a resource very quickly when you’re hitting that kind of intercept at that kind of grade.

TGR: How different is the picture of Torex going to look by the end of 2013?

MM: I expect at least an additional 4 Moz resource at Media Luna. There’s a very good potential that it could be multiples more. Some firms on The Street are putting phenomenal multiples of the current resource as the potential for Media Luna. I prefer to be more conservative at 5–10 Moz at Media Luna until additional gold intercept and extensions are confirmed.

That would definitely put Torex in play for a major. It would be unlikely that the company would remain independent if it came up with that kind of resource and that kind of grade absent a significant market rerating.

Bear in mind, Torex is sitting on roughly $390M in cash, so an acquirer can essentially deduct the cash because it would recapture that as part of the acquisition cost. The actual enterprise value is roughly $700M.

TGR: Goldcorp dumped tailings on Cayden Resources’ property. Is there anything new to report there?

MM: Goldcorp recently purchased the land from Cayden for $7.88M. It’s enough to fund operations for roughly two years.

TGR: Is Cayden going to continue to drill off a resource with that money?

MM: Cayden doesn’t have a discovery hole yet. It has drilled roughly seven holes on the Magnetita project. All of the gold mineralization in the GGB has an airborne magnetic signature. Magnetita has the largest airborne magnetic signature of any project in the GGB. There’s an excellent chance that it will have a sizeable resource.

At Goldcorp’s Los Filos, there are four, going on five, mines on that project. They are all clustered together. Speaking of clusters, you can see Cayden’s project from under 2km away. When you get a cluster around a magnetic anomaly, it would defy reasonable expectations for Magnetita to not have anything. Trench results have confirmed gold—the question is size—hitting longer intercepts and creating an economic resource.

TGR: Market sentiment for gold is somewhat flat, but you believe gold will rebound. Make your case.

MM: Actually, I don’t need gold to rebound. For 29 years, I’ve operated under Keynes’ mantra of “I’d rather be vaguely right than precisely wrong.” I don’t need the 100% returns post Global Financial Crisis, nor do I expect the gold price to appreciate significantly from here. The requirement that the price of gold goes up doesn’t necessarily need to manifest itself. It just needs to not collapse in order to have very attractive earnings for the majors.

There is a debt-cycle restructuring going on in the U.S. For approximately 40 years, debt fueled growth. The debt to gross domestic product (GDP) ratio was approximately half of what it was at the end of the last debt cycle that ended in 2008. In the Depression, it was 255% of GDP. In 2007, it was 380% of GDP. The U.S. private sector balance sheet is trying to heal from roughly 150% of the debt/GDP ratio it had in the Depression. No one wants to use the big “D” word, but the debt cycle and long and slow restructuring are similar in effect.

We don’t need to say with certainty the amount of years or the length of time that it will take for the private sector balance sheet repair to transpire in the U.S. I don’t see it being resolved any time soon. Private sector debt growth has been flat since the global financial crisis. Arguably that is the reason for the quantitative easing and federal deficits to stimulate growth that would otherwise not be occurring.

It takes a while to slog into a downturn and it takes a while to slog out of a downturn, but we could have a rotation faster than many think.

TGR: The price of gold jumped above $1,600/ounce after the tax on Cyprus bank assets was announced. Although the Cypriot Parliament has voted it down, is that a sign of things to come if the same “bail-in” is applied to Spain and other euro countries?

MM: The Cypriot problem is extremely complicated, as well as precedent setting with bail-ins and a good bit of Germany’s first “just say no” to EU backstopping. Exogenous material market events can definitely be market movers—and this may light a fire under gold, the degree of which is still fluid. In this case there are significant international twists in addition to the EU and European Central Bank; there is also a lot of Russian money stowed away in the Cyprus banking system. The ability to put a bail-in haircut on Russian deposits is a wildcard as Cyprus has a much needed €2.5 billion Russian loan, a €1.4 billion international bond payment in June, and Angela Merkel and the EU get 36% of their natural gas from Russia, which could use it as a bargaining chip. This has many plots and subplots to it.

In its broadest sense, this is a manifestation of the increasingly unbridgeable expectations by populaces worldwide regarding benefits and obligations, aka spending vs. revenue. Cyprus was considered a “tax haven” so clearly its fiscal policies have not backed its banking system, which is awash with foreign, largely Russian, monies. In Cyprus, a bail-in fix by depositors would have indicated that the country intended to continue the favorable 10% top tax-bracket tax regime.

With gold as the only non-sovereign reserve for central banks, it is at a minimum a reserve asset without an increasing liability in a world where that is a norm. While we cannot tell if gold becomes an increasing asset de jour and commensurately takes off in price, we do at least have the visibility that it should remain in demand, holding its ability as a store of value—while many sovereign credits and currencies appear to be in a race to the bottom.

TGR: Can you leave us with one reason for optimism in a gloomy market?

MM: Valuations for the gold majors are as cheap as during the global financial crisis. We’re pushing the end of a quarter. Historically, portfolio managers and active mining managers tend to both preserve gains and avoid losses at the end of a quarter and, importantly, rotate and seek out new alpha or new returns above the benchmark for which they’re compensated and bonused at the beginning of quarters. Next month will be the beginning of a new quarter, and perhaps some reallocations will come back into the gold sector.

TGR: Thanks for your insights, Merrill.

Merrill W. McHenry, MBA, CFA, has been in the investment business for more than 28 years. Early in his career, as a portfolio manager he managed more than $1.5 billion in three U.S. mutual funds, and set up an international mining merchant bank visiting mine project sites on multiple continents. As a mining analyst, he has worked both the buy and the sell sides, providing research for Tier 1 and Tier 2 investment dealers, as well as prominent global investors. A couple years ago, he led special projects modeling at BMO Capital Markets for the Global Mining Research Group that was top ranked in Canada by Brendan Wood during his tenure. Currently, McHenry is the metals and mining analyst for Industrial Alliance Securities and is a member of the CFA Institute and the Toronto Society of Financial Analysts.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Source: Brian Sylvester 

DISCLOSURE:

1) Brian Sylvester conducted this interview for The Gold Report and provides services to The Gold Reportas an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Gold Report: Goldcorp Inc. and Newstrike Capital Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.

3) Merrill McHenry: I or my family own shares of the following companies mentioned in this interview: Minaurum Gold Inc. I personally or my family am paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.

5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Streetwise – The Gold Report is Copyright © 2013 by Streetwise Reports LLC. All rights are reserved. Streetwise Reports LLC hereby grants an unrestricted license to use or disseminate this copyrighted material (i) only in whole (and always including this disclaimer), but (ii) never in part.

Streetwise Reports LLC does not guarantee the accuracy or thoroughness of the information reported.

Streetwise Reports LLC receives a fee from companies that are listed on the home page in the In This Issue section. Their sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

Dear member,

Our new client and Featured Company, Calyx Bio-Ventures (CYX:TSXV), will undoubtedly represent the largest trade we make in 2013. Calyx owns a majority interest in a game changing renewable energy company that was recently a part of aviation history.

When it comes to renewable energy investing, a sector with which we have been involved for many years, a company must have what we refer to as the 5 M’s: Mission, Mandates, Management, Money and a low Market Cap.

Calyx Bio-Ventures’ mission is a remarkable one and that’s why we are introducing it to you. The company’s operating subsidiary, in partnership with the government of Canada, Chevron Lummus Global and Applied Research Associates, recently made world history in what Popular Science Magazine referred to as one of “The Big Science Stories of 2012″.

How was world history made?

The NRC (National Research Council of Canada) flew the world’s first jet in civil aviation history that was powered by 100 percent biofuel, with no engine modifications made!

How is our new Featured Company involved?

The biofuel used in the historic flight was produced from exclusive oilseed feedstock (known as carinata) from Calyx Bio-Ventures’ operating subsidiary, Agrisoma Biosciences Inc. (Agrisoma), and refined into jet fuel by Applied Research Associates and Chevron Lummus Global.

Press Release:
Calyx’s Operating Subsidiary Makes Aviation History,
Powers the World’s First 100% Biofuel Flight

Years in the Making

It took roughly $20 million dollars and 12 years of research and development for Agrisoma to get to the point where it had a feedstock crop that can be used as an input for drop-in jet fuel. This feedstock is known as ‘Resonance™ carinata’ and is exclusive to Calyx’s operating subsidiary, Agrisoma. It has an oil profile optimized for use in the biofuel industry, and shines as the feedstock for biojet fuel.

In respect to Agrisoma, Calyx’s operating subsidiary, Courtney Symons of the Ottawa Business Journal reported:

Karen Pero, Invest Ottawa’s senior business development manager for the clean-tech sector, says that the 100 per cent biofuel flight is something no other seed provider can add to its resumé.

source: http://www.obj.ca/Technology/2013-01-29/article-3165687/From-seed-to-sky/1

This flight marked the first time that a civilian jet aircraft was powered by 100% un-blended, renewable jet fuel that meets petroleum jet fuel specifications. As mentioned, not one jet engine modification was needed. It was the exact same engine that typically would use a petroleum based jet fuel.

The historic flight took place in Ottawa on October 29, 2012, and was followed by data analyses conducted by the government of Canada’s National Research Council. No stone was left unturned.

The Government of Canada’s website reported on October 29, 2012:

“The biofuel flowed into the engine of the Falcon 20 – one of NRC’s specifically equipped and best suited jet for this challenge – as it flew over the sky of Canada’s capital. A second aircraft, the T-33, tailed the Falcon in flight and collected valuable information on the emissions generated by the biofuel.”

source: http://www.nrc-cnrc.gc.ca/eng/news/releases/2012/biofuels.html

T33 tailing the Falcon 20 to collect data during the historical flight – source: www.nrc-cnrc.gc.ca

The NRC of Canada’s Falcon 20 Jet used in the historic 100% biofuel flight

Just over two months after the flight took place, in January 2013, the NRC announced the results of the historic flight, which revealed that the biojet fuel that had been refined from Agrisoma’s feedstock (subsidiary of Calyx), burned cleaner than and more efficient than conventional aviation fuel.

Results of Flight:
50% reduction in aerosol emissions
25% reduction in particles
49% reduction in black carbon
Improvement of 1.5% in fuel consumption

* And not one engine modification was required to use the fuel – same engine as regular jet fuel

Click here to read the entire press release documenting specifics of the achievement.

This was a breakthrough for the aviation industry and the story was covered by media outlets such as Popular Science, AINonline, General Aviation News, Aviation Week, AVWeb, the ARA, Air Transport World and dozens more. Just Google ’100% biofuel flight’ and you will see how widely covered this story was. Even those involved in oil and gas publication covered this story.

Click to view National Research Council report on historic flight

Oilprice.com, arguably the most popular oil and gas industry publication in the world, reported:

“This flight represents the culmination of a significant and strategic effort within Canada to demonstrate leadership in green aviation, from the commercialization of a sustainable and scalable feedstock crop to an “at altitude” flight demonstration with real-time emissions monitoring during the flight. Agrisoma is proud to be a part of this landmark work,” said Steven Fabijanski, President and CEO of Agrisoma, who was present on the tarmac. “To date, all powered flight has relied on fossil fuel. This flight changes everything: we have witnessed petroleum free aviation.”

This story is one of national pride for Canada.

In late January, Courtney Symons of the Ottawa Business Journal reported that:

“Agrisoma Biosciences Inc., a local clean-tech company, has been perfecting that oilseed for 12 years, selling it to farmers out west and working with companies that process the seed into biofuel. Those small seeds are the firm’s ticket into the burgeoning industry of green transportation for military and commercial aviation.”

source: http://www.obj.ca/Technology/2013-01-29/article-3165687/From-seed-to-sky/1

In addition, last year, Porter Airlines conducted Canada’s first biofuel powered revenue flight. Take a guess which company was involved in producing the 50/50 blend of biofuel for that flight? That’s right; the biofuel used was derived from various oilseed crops that included the carinata oilseed grown and produced by Agrisoma.

Mandates & Calyx Bio-Ventures

If any renewable energy is to gain traction on a large scale, it needs the congressional and often financial (subsidies) support of governments. Biofuels, including the Resonance™ carinata, are no exception.

52 countries, nearly all of the largest economies in the world, have biofuel mandates in place, with the bulk of them coming from the EU, US, China and Brazil. The most efficient biofuels will receive the bulk of the funding.

Canada’s NRC funded the first 100% biofuel flight and used the private sector, our Featured Company’s subsidiary, in partnership to achieve history. It is important to note that Agrisoma Biosciences is 50.1% owned by our new Featured Company, Calyx Bio-Ventures, and the remaining 49.9% is owned by BDC Capital, a financial institution owned by the Government of Canada.

The US government is investing billions for the expansion of biofuels as well, particularly when it comes to the aviation industry – hence the significance of the first 100% biofuel powered flight and the global recognition it received. The aviation industry has committed itself to zero carbon growth – which will require biojet fuel usage, creating huge demand.

The Ottawa Business Journal reported recently that “Currently, Agrisoma’s oilseed – which is branded as Resonance – is under evaluation by U.S. defence agencies, according to the firm’s president and CEO, Steven Fabijanski.”

source: http://www.obj.ca/Technology/2013-01-29/article-3165687/From-seed-to-sky/1

The US Federal Aviation Administration (FAA) has a stated goal of reaching one billion gallons of biojet fuel use in the commercial and military aviation sectors by 2018.

Obama has been a strong supporter of biofuels. He has thrown his weight behind new and existing initiatives to boost production, including supporting Congressional mandates that would triple biofuel production to 36 billion gallons by 2022.

Agrisoma is headquartered in Ottawa, Ontario, not a typical location for a company focused on biofuel. The Ottawa Business Journal asked Agrisoma’s president and CEO, Steven Fabijanski, what the reasoning behind the company’s choice of location was:

“By having the administration here in Ottawa, we are able to reach decision-makers and policy-makers in government.”

“When the ministers are following what you’re doing, I think that means Ottawa is a good place to be as this industry starts to grow,” Mr. Fabijanski says.

source: http://www.obj.ca/Technology/2013-01-29/article-3165687/From-seed-to-sky/1

The biofuel industry is here to stay and only going to get bigger…very quickly. It is expected to grow by roughly 400% in the next two decades.

Why Calyx Bio-Ventures

As mentioned, Calyx’s operating subsidiary, Agrisoma Biosciences Inc., which is jointly owned by BDC Capital Inc. (the venture capital arm of the Government of Canada) is one of Canada’s largest agricultural biotechnology companies. The company’s ‘Resonance™ carinata’ feedstock crop provides the highest quality industrial oil feedstock, meaning that refiners can turn it into end products that can perform similarly to petroleum.

Agrisoma owns the breeders rights to this new “designer” seed crop (Carinata), which produces oil that is better suited to industrial applications (biofuels), than food-based oils such as soy or canola. Aside from its industrial uses, particularly in jet fuel, this is a new crop, exclusive to Agrisoma and vis-a-vis Calyx, which offers new opportunities for growers. It has only been available for commercial use since 2012 – the first year that Agrisoma made it available beyond small scale demonstration.

The Growers Advantage

In the biomass industry, unless you can provide farmers with incentive to grow your crop, you’ll never gain any traction. It essentially comes down to the farmer making money come harvest time.

Thanks to all the research and development spanning more than a decade, Agrisoma’s carinata offers scalable opportunities utilizing marginal and/or semi-arid lands to profitably produce high-quality renewable oil at a competitive price point to other feedstocks. Also, there are growers who want to add a profitable oilseed crop to their rotations, but have been limited in doing so because the soil type and climate in the warmer, drier regions isn’t well suited to such crops, like canola. They now have an option with Agrisoma’s Resonance™ carinata. This is the X factor which brings everything together.

Under the Resonance™ brand, Agrisoma has developed elite lines of ‘Brassica carinata’ (scientific term) that offer growers an economic opportunity on unproductive lands or as a rotation crop: high yields, high oil content, and ideally suited to semi-arid growing conditions commonly found in the southern Prairies of Canada and the Northern Plains of the US. There’s even an added benefit – tests indicate that using carinata as a rotation crop won’t cause undue soil depletion and result in yield losses on whatever crop they plant the following season.

What this means is that farmers can slot carinata in a rotation when they would otherwise have a fallow year, therefore making money on land that would otherwise sit idle. This also means that carinata can scale up on otherwise fallow lands, so it doesn’t have to displace food crops.

With the US Federal Aviation Administration (FAA) stating its goal of reaching one billion gallons of biojet fuel use in the commercial and military aviation sectors by 2018, fuel suppliers are looking for a sustainable, scalable, secure, and preferably non-food feedstock to meet this demand – and Agrisoma’s Resonance™ carinata can be that crop.

It is the best of both worlds: a crop with excellent agronomics that performs well in stressful conditions and has a ready market going through a major growth period thanks to global government initiatives. This is an industrial oilseed crop, a cousin of mustard and canola, that is particularly suited to production in low quality farmland areas – places where many crops cannot grow productively.

Carinata competitive durability

Agrisoma has seen tremendous growth since rolling out its oilseed crop in 2011, where it had 50 acres planted. 2012 was the first year for commercial sales and crop/revenue growth – 6,600 acres were planted in the year. The crop performance was excellent despite 2012′s severe drought conditions in much of North America. This speaks volumes to the crops durability in comparison to others.

2013 is a big year for Calyx Bio-Ventures as its operating subsidiary, Agrisoma, has a goal of growing the number of acres planted several times over. To give you an idea of the interest in Agrisoma’s Resonance™ carinata, the company hosted summer tours in 2012 at the 40 production sites so that farmers and other interested parties could witness firsthand how carinata was performing in the field. Interest was strong and approximately 500 people took advantage of the opportunity to participate in the site visits. At harvest time, carinata remarkably produced a harvest even at the growing sites where weather was very challenging.

Crop tour

Just this past Wednesday, February 13, 2013: Calyx Bio-Ventures was named to the 2013 TSX Venture 50 (R).

The 2013 TSX Venture 50(R) includes the top 10 companies in 5 major industry sectors that have been identified as leaders in providing shareholder value on Canada’s junior stock exchange.

“We couldn’t be more pleased to be included in the 2013 TSX Venture 50(R) as a member of the Technology and Life Sciences sector,” said Calyx President and CEO Hugh Notman. “This honour continues to build momentum for Calyx, as we continue our efforts to promote Resonance(TM) carinata, a non-food oilseed crop for use in biofuels, through our majority-owned subsidiary Agrisoma Biosciences Inc. It’s not only a recognition for our company-it’s also a nod to our shareholders for their vision.”

There were nine other companies selected to the Technology & Life Sciences industry category aside from Calyx. It was interesting to discover that the average market cap of those 9 other companies was roughly $100 million. Calyx currently has a market cap of roughly $12 million and trades for $0.40.

Full exchange press release here.

A History of Creating Shareholder Wealth and Buyouts

This group of leaders combines science expertise with the venture capital world. Calyx’s President and CEO is Hugh Notman, a partner at Stirling Mercantile and previously a Vice President of PricewaterhouseCoopers in the Corporate Finance and Investment Banking Group. Hugh brings tremendous experience advising and fund raising for technology companies.

Steven Fabinjanski, PhD, is the President and CEO of Agrisoma. What’s interesting to note about Steven is that he previously built and sold a seed company specializing in oilseed technology to Pioneer, which focuses on farmland stability.

Richard Whittall is a director for Calyx and is also the CEO of Newstrike Capital (part of the Lundin Group), which currently has a market cap of roughly $190 million. He was also a previous director for Burcon Nutrasicence – a Nasdaq listed company and leader in nutrition, health and wellness in the field of functional, renewable plant proteins. Its market cap is roughly $115 million. Richard is also a seasoned investment banker and past director of Miranda Mining, the first junior company to promote and develop the Guerrero Gold belt, from 1995 until its sale to Wheaton River Minerals (Goldcorp) in 2003.

Kevin Rathbun is a CFA and responsible for Calyx’s corporate development. He is the former CFO of Realm Energy, which was bought out by San Leon Energy in 2011 in a deal worth $139 million.

Louis Lacasse is a director for Calyx and President of GeneChem Management Inc. He is the manager of a specialized biotechnology venture fund which has over $350 million in assets distributed over four funds. GeneChem has established itself as a leader in the management of focused biotech funds.

Click to enlarge

Money and Market Cap

Calyx Bio-Ventures recently completed a $4 million private placement, with the primary use of proceeds going to increase Calyx’s stake in Agrisoma from approximately 25% to just over 50% – in part through buying out Growthworks’ stake in the company. It took $20 million of research and development over more than a decade before landing on Resonance™ carinata as the oilseed feedstock Agrisoma was ready to commercialize.

The company demonstrated the feedstock works in the real world by helping make aviation history. While it will continue its carinata breeding program, to keep looking for improvement, the product is ready to go now, so marketing and expansion of Resonance™ carinata is just as big a focus as the continual research and development is.

Calyx isn’t some junior exploration company who will need to raise $2 million every time it wants to drill a few holes. The company has tight control of its capital expenditures, no surprise given the investment banking background of its CEO. In addition, management has kept the company’s capital structure tight. There are 29.3 million shares outstanding, 39.1 million fully diluted. Its market cap sits around $12 million.

Calyx Comparable:

source: Calyx Bio-Ventures’ investor presentation

Made History and Moving Forward

Calyx Bio-Ventures’ operating subsidiary, Agrisoma, powered the world’s first 100% biofuel flight, which “is something no other seed provider can add to its resumé”.

With the EIA predicting a 400% increase in biofuel usage over the coming few decades and mandates in effect to meet these targets, Calyx is well positioned to capitalize. We are shareholders in Calyx Bio-Ventures and will be adding to our position, provided we can do so below $0.50 per share. Calyx Bio-Ventures is a client of ours, and we are biased. With that said, we’d be shareholders in this company whether it was a client or not.

The only way to gain access to this unique story in the public market is through Calyx Bio-Ventures (CYX:TSXV), the majority stakeholder of Agrisoma and our new Featured Company. Always practice thorough due-diligence as we don’t share in your profits or losses. We will have updates on Calyx Bio-Ventures over the coming weeks, so stay tuned.

Reminder: Stock markets are closed on Monday, February 18th for holiday.

All the best with your investments,

PINNACLEDIGEST.COM

CLICK HERE TO VIEW CALYX BIO-VENTURES’
DETAILED INVESTOR PRESENTATION

Tim Leslie has been the supervisor of flying operations training at the National Research Council Aerospace for 15 years and piloted the historic 100% biofuel powered flight in partnership with Agrisoma. Click on the image below to listen to him talk about it.

“I am very proud to be a part of this…it is important for Canada… I am proud to be a member of the Agrisoma, the Applied Research Associates and the Garden team”