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Monday's small-cap stocks to watch

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Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.

Intrepid Potash Inc. (IPI-N) said its auditor had expressed doubts about the miner's ability to stay in business, sending its share price tumbling by more than 50 per cent.

The company, which reported its third straight quarterly loss, also said low potash prices could cause a breach in its loan covenants.

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"As a result, our auditors added going concern language to their audit opinion," Chief Executive Bob Jornayvaz said in a statement on Monday.

Intrepid Potash, which had 928 employees as of Dec. 31, 2014, also said it cut 5 per cent of its workforce in early 2016.

The company said it was evaluating the viability of one of its mines near Carlsbad, New Mexico.

"We have also been working with our lending group on an amendment that will provide us with the time and continued flexibility needed as we evaluate and execute on our options," Jornayvaz said.

The company reported net loss of $518.3-million, or $6.85 per share, in the fourth quarter ended Dec. 31, compared with earnings of $5.8-million, or 8 cents per share, a year earlier.

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Furniture and appliance retailer BMTC Group Inc. (GBT-T) says warehouse employees of its Montreal distribution centre have been locked out "for an indefinite period."

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"The principal issue that led to the deadlock in the negotiations to renew the collective agreement, which expired on December 31, 2015, relates to the pension plan for future warehouse employees of the distribution centre," the company stated.

"Essentially, the corporation has agreed to keep unchanged, for the benefit of current employees, the defined benefit pension plan but has proposed that new employees hired following the renewal of the collective agreement would benefit from a defined contribution pension plan rather than from a defined benefit pension plan."

BMTC said its operations aren't affected by the lockout and delivery will continue without interruption.

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Newmarket Gold (NMI-T) ) says it has exercised more than 4 million share purchase warrants at a price of $1.63 per common share.

It said proceeds from the exercise of the warrants were $6.6 million and a similar number of common shares are to be issued from the company's treasury.

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"The additional cash will significantly strengthen the company's balance sheet as it is on track to be essentially debt-free by the end of the first quarter of 2016," the company stated.

It said the warrants were issued in connection with the company's public offering of units completed in February 2014, and were to expire on February 27, 2016. It said 95 per cent of the outstanding warrants were exercised.

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Africa Oil Corp. (AOI-T) reported a net loss of $87.4 million (U.S.) compared to a loss of $155.7 million for 2014.

The Canadian oil and gas company, with assets in Kenya and Ethiopia, said operating expenses were lower in 2015 than a year earlier.

"The company continues to finance its activities primarily through equity, and has completed several private placements during the year," which totalled $275 million.

The company said it's debt free.

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Perseus Mining Ltd. (PRU-T) has made a bid, valued at $85 million, to take over London-listed Amara Mining, looking to pool their West African gold resources as bullion prices defy gloom in the commodities sector.

Perseus said it was offering 0.68 of a new Perseus share and 0.34 of a Perseus warrant for every Amara share, which it said valued Amara at 14.6 pence a share, or 61 million pounds ($85 million US), a 42 per cent premium to its close last Friday.

The deal, unanimously backed by Amara's board, would give Perseus Amara's Yaoure gold project in Cote d'Ivoire, adding to the Edikan gold mine that Perseus owns in Ghana. The combined group would also have two undeveloped projects in Cote d'Ivoire and Sierra Leone.

"If approved by Amara's shareholders, the proposal will potentially transform Perseus into a leading mid-tier West African gold producer delivering significant benefits to shareholders of both Perseus and Amara," Perseus Chief Executive Jeff Quartermaine said.

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MCAN Mortgage Corp. (MKP-T) says its net income rose 33 per cent in the fourth quarter to $9.5-million.

The company said the increase was "due to higher securitization income from an 83 per cent increase in our average market mortgage-backed securities program mortgage portfolio and a $2.5 million income distribution received on a commercial real estate investment."

Earnings per share increased by 24 per cent to 42 cents in the quarter. Return on average shareholders' equity increased to 14.66 per cent in the fourth quarter, up from 12.8 per cent a year earlier.

It said impaired mortgages decreased to $2.7-million from $3.7-million during the fourth quarter and the total impaired mortgage ratio fell to 0.11 per cent from 0.15 per cent during the quarter.

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Gran Tierra Energy Inc. (GTE-N, GTE-T) reported a net loss of $268-million or 94 cents per share in 2015, compared to a net loss of $171.3-million, or 60 cents per share in 2014.

It said the loss was largely due to $229.6-million of non-cash ceiling test write-downs, net of income tax recovery, resulting from the continued low commodity price environment.

The company focused on oil and gas exploration and production in Colombia, said funds flow from continuing operations decreased to $108.3-million in 2015 from $319.6-million in 2014.

Its average realized price decreased to $41.41 per barrel of oil equivalent (boe) compared with $82.74 per boe in the prior year.

"We are committed to being a low cost operator that is not merely trying to survive in the current environment but rather thrive and position the company for growth in 2016 and beyond," stated CEO Gary Guidry in a release.

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ATS Automation Tooling Systems Inc. (ATS-T)  says it has received an enterprise order booking valued at $100-million (U.S.) from an undisclosed North American-based customer, which has been one of its customers for a number of years.

The order booking involves delivery and installation of systems at several locations "that will enable the customer to roll out a new global product," the company stated.

"This Order Booking is a reflection of ATS's growth strategy of providing comprehensive, value-based enterprise manufacturing systems for customers built on differentiating technological solutions and global capabilities," stated CEO Anthony Caputo. "It represents the culmination of months of collaboration between the customer and ATS teams and marks the continuation of a relationship that has produced many successful outcomes."

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Osisko Gold Royalties Ltd (OR-T) reported preliminary fourth-quarter revenues of $12.8-million, which was above analysts' expectations of $10.8-million, according to Thomson Reuters.

Full-year revenues were $45.4-million, also ahead of analysts' expectations of $44.7-million

In its outlook, the company said attributable royalty production for 2016 is estimated at 28,000 to 29,000 gold ounces for the Canadian Malartic mine, between 5,500 and 6,200 gold ounces for the Éléonore mine and between 1,000 and 2,000 ounces from other royalties.

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Paladin Energy Ltd (PDN-T) announced a "one-off" $81.4-million reduction in its total debt to $362-million.

The company said the reduction was due to a repayment and termination of the $56.4-million Langer Heinrich Mine syndicated facility agreement and an additional repurchase of a principal amount of $25-million of its outstanding $237-million, 6 per cent convertible bonds due 2017.

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Chartwell Retirement Residences (CSH.UN-T) says it's buying the Duke of Devonshire Retirement Residence in Ottawa for$63.6-million.

The company says the Duke of Devonshire is a high-end residence in downtown Ottawa. It said the purchase price will be settled by taking on a $34-million mortgage at a 4.41 per cent interest rate maturing in September 2024, with the balance to be paid in cash.

"We are pleased to add this luxury residence to our portfolio. The Duke of Devonshire complements our already strong presence in the Ottawa market allowing for further management and operating efficiencies,"stated chief financial officer Vlad Volodarski in a release.

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Taseko Mines Ltd (TKO-N, TGB-N) says it will appoint two new independent directors to increase its board to nine members, but won't consider "candidates associated with a dissident that recently requisitioned a Taseko shareholders' meeting."

It's the latest volley in the battle the company is having with activist investor Raging River Capital LP.

In a release on Monday, Raging River, which owns about 5 per cent of Taseko shares, says the comapny is showing "disturbing signs of desperation."

Raging River managing partner Mark Radzik stated: "Let's be clear, if Raging River had not stood up for all shareholders against Hunter Dickinson, the Taseko Board would never have added any new directors - the problem though is that the entrenched, self-interested and, we believe, conflicted Hunter Dickinson-related directors remain and will continue to have significant influence. The only way to effect real change and ensure a Taseko Board you can trust is to replace incumbent directors Ronald Thiessen, Russell Hallbauer and Robert Dickinson with the independent nominees we have put forward on behalf of all Taseko shareholders."

Raging River also said in the statement that it "intends to notify the British Columbia Securities Commission and the Securities and Exchange Commission to initiate an investigation into CEO Russ Hallbauer and Vice President Brian Battison for insider trading."

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With a file from Reuters

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About the Author
Contributor

Brenda Bouw is a freelance writer and editor based in Vancouver. She has more than 20 years of experience as a business reporter, including at The Globe and Mail, The Canadian Press, the Financial Post and was executive producer at BNN (formerly ROBTv). Brenda was also part of the Globe and Mail reporting team that won the 2010 National Newspaper Award for business journalism. More

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