Shell Sum­mary for Sept. 15, 2017

Stockwatch Daily - - SHELLS - By Stock­watch Business Reporter

THE TSX Ven­ture Ex­change gained 3.42 points to 779.66 Friday, end­ing the week up 7.67 points. Go­ing in the op­po­site di­rec­tion, Jean Depatie and Re­jean Gos­selin’s re­cent shell grad­u­ate, the Colom­bian

gold pro­mo­tion OneCap In­vest­ment Corp. (OIC), lost 11 cents to close at 14 cents on 30,902 shares.

OneCap In­vest­ment listed as a cap­i­tal pool shell in Septem­ber, 2012, with a $742,820 ini­tial pub­lic of­fer­ing at 20 cents. It was founded by first-time shell-mak­ers (and first-time pub­lic com­pany direc­tors) Pierre Set­lakwe and Daniel Dorey. Mr. Set­lakwe is a real estate lawyer with De Grand­pre Chait LLP in Mon­treal. Mr. Dorey, from 1991 to 2003, was the pres­i­dent of a cou­ple of Quebec real estate man ag e me n t compa nies. Then from 2004 to 2013, he was the man­ag­ing di­rec­tor of a real estate in­vest­ment and ad­vi­sory firm called OneCap Fi­nan­cial Corp. Be­fore find­ing the Colom­bian gold deal for their shell, Mr. Set­lakwe and Mr. Dorey lined up two other po­ten­tial qual­i­fy­ing trans­ac­tions. Not sur­pris­ingly, both were prop­erty devel­op­ment deals. First was the ac­qui­si­tion of an industrial build­ing in Mon­treal, and the other was a deal to build a data cen­tre in Win­nipeg for Man­i­toba Tele­com Ser­vices Inc.

As is typ­i­cal for cap­i­tal pool shells, OneCap In­vest­ment’s ear­li­est in­vestors paid half of the IPO price for their seed shares (which re­main in es­crow). Mr. Set­lakwe and Mr. Dorey each bought 380,000 es­crowed shares at 10 cents be­fore the shell listed. In De­cem­ber, 2014, the TSX-V can­celled half of the es­crowed shares as pun­ish­ment for the shell’s fail­ure to close a QT within 24 months of list­ing. So, the break-even price for the es­crowed shares rose to 20 cents, equal to the IPO price. Based on to­day’s clos­ing price for OneCap In­vest­ment, all the early in­vestors, in­clud­ing the IPO share­hold­ers, are down. As well, the IPO share­hold­ers were made to wait five years for a QT, which took three years longer than it should have taken. By our mea­sure, which con­sid­ers the out­come for a shell’ s IPO share­hold­ers, Mr. Set­lakwe and Mr. Dorey’s first shell was a fail­ure.

The duo re­signed on clos­ing of the QT. OneCap In­vest­ment is now un­der Mr. Depatie, who is a ge­ol­o­gist and the chair­man of Peru­vian gold pro­ducer Dy­na­cor Gold Mines Inc. (DNG: $2.00), and Mr. Gos­selin, who is an en­gi­neer and the chair­man of Moroc­can sil­ver pro­ducer Maya Gold & Sil­ver Inc. (MYA: $0.35). In con­nec­tion with OneCap In­vest­ment’s QT, Mr. Depatie pri­vately bought 825,000 shares at 20 cents. He is also down to­day.

Daniel Lanskey’s first cap­i­tal pool shell, provoca­tively named The Nee­dle Cap­i­tal Corp. (NEDL), has listed on the TSX-V with a $300,000 IPO at 10 cents. Its IPO agent was Industrial Al­liance Se­cu­ri­ties Inc. At the open to­day, The Nee­dle was im­me­di­ately halted, “pend­ing re­ceipt of ac­cept­able doc­u­men­ta­tion,” so it has not yet traded.

Mr. Lanskey was a se­nior con­sta­ble with the Queens­land Po­lice Ser­vice in Aus­tralia from 1983 to 1992. Af­ter­ward, he worked at a cou­ple of Aus­tralian tel­cos, then from 2006 to 2014, he was the man­ag­ing di­rec­tor of an Ok­la­homa oil and gas ju­nior called AusTex Oil Ltd. In 2008, AusTex listed on the Aus­tralian Se­cu­ri­ties Ex­change with a $26.21-mil­lion (Aus­tralian) IPO at 40 Aus­tralian cents. Since then, it has traded no higher than 35 Aus­tralian cents. Mr. Lanskey re­signed from the com­pany in 2014. AusTex last closed at

one Aus­tralian cent.

These days, Mr. Lanskey is a di­rec­tor of Aus­tralian Se­cu­ri­ties Com­pany (In­ter­na­tional) Pty. Ltd., an in­vest­ment and fi­nan­cial ad­vi­sory firm in Syd­ney. His first shell, The Nee­dle, plans to seek an oil and gas deal or a min­ing deal for its QT.

Joanne Yan’s third cap­i­tal pool shell, Avanco Cap­i­tal Corp. (AAA), re­quested a halt to­day, pend­ing an an­nounce­ment (pre­sum­ably about a QT), but it had not yet re­leased any news by the time the mar­ket closed. The shell has more than enough time to an­nounce and com­plete a QT; it listed only six months ago, with a $400,000 IPO at 10 cents.

Ms. Yan, a pro­moter and shell-maker in Van­cou­ver, has been a di­rec­tor of about two dozen pub­lic com­pa­nies, in­clud­ing var­i­ous Chi­nese busi­nesses and other shell-mak­ers’ cap­i­tal pool shells. In 2006, she listed the first shell of her own, Y&O Ven­tures Corp., with a $200,000 IPO at 10 cents. In the same year, Y&O launched an oil and gas pip­ing com­pany, Han­wei En­ergy Ser­vices Corp. (HE: $0.025). Han­wei peaked at $7.45 in 2007 and re­mained above 50 cents un­til 2009. Y&O’s IPO share­hold­ers had plenty of op­por­tu­ni­ties to get out of their in­vest­ment with a sub­stan­tial profit, so we con­sider Ms. Yan’s first shell to have been a suc­cess.

Her sec­ond shell, JYW Cap­i­tal Corp., listed in 2007 with a $300,000 IPO at 10 cents. Three years later, it launched China Coal Corp., a coal pro­ducer. China Coal gave JYW’s IPO share­hold­ers more than three years to get out of their in­vest­ment with a profit, so we con­sider Ms. Yan’s sec­ond shell to have been a suc­cess also. (China Coal later ran out of money and delisted, but this does not af­fect Ms. Yan’s shell-mak­ing record.)


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