Shell Summary for Sept. 15, 2017
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.)