Small Cap Updates & New Recommendations – March 8, 2014

Small Cap Updates & New Recommendations – March 8, 2014 post image

This week we have updates on Goldsource Mines Inc. (GXS), Ironclad Performance Wear (ICPW) and Enterprise Group (E).

Goldsource Mines Inc. (GXS – $0.30) and Eagle Mountain Gold Corp. have successfully completed their previously announced business combination earlier this week. As a result, all of the shareholders of Eagle Mountain have received 0.52763 shares of common stock of Goldsource for each common stock of Eagle Mountain they owned.

On February 28th, the last day Eagle Mountain’s shares traded, the stock closed at $0.13. At this moment Goldsource’s shares are trading at $0.30. So that means that everybody who was paying attention, or who read our newsletter, could have made a 21 percent profit just by buying Eagle Mountain shares and exchanging them for Goldsource shares. Sometimes playing the stock market can be easy.

In other news, Goldsource completed a private placement of 17,142,858 units at a price of $0.14 per unit for gross proceeds of $2.4 million. The proceeds will be used to accelerate the development of the Eagle Mountain Gold Project in Guyana, South America. Management aims to commence gold production in Guyana on a ‘phased’ production basis prior to year end.

Because Eagle Mountain’s common shares were delisted from the TSX Venture Exchange, we’ll continue to follow the progress of the Eagle Mountain Gold project under Goldsource Mines. Profile Page

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Ironclad Performance Wear Corporation (ICPW – $0.16), the high-performance task-specific work gloves manufacturer, reported financial results for the fourth quarter and fiscal year ended December 31, 2013.

Net sales for the fourth quarter of 2013 were $10.1 million, a decrease of 6.3% compared with fourth quarter sales of $10.7 million in 2012, primarily resulting from strong KONG sales in the fourth quarter last year. Net income for the fourth quarter of 2013 was $1.3 million, or $0.02 per share, as compared to $2.6 million, or $0.03 per share, in the same period last year.

Full-year net sales for 2013 reached $24.5 million, a decrease of 6.3% compared with full year 2012 sales of $26.2 million. This was primarily due to lower oil and gas sales throughout the year. Net income for 2013 was $561,000, or $0.01 per share, as compared to a net income of $3.1 million, or $0.04 per share, in the prior year.

Jeff Cordes, Ironclad’s new CEO, commented: “The Company has been challenged by slower industrial order flow due to increased competitive offerings with lower priced gloves that have fewer features. While the Company offset much of the industrial shortfall in 2013 with expanded retail and private label volume, the overall mix of business did not carry the commensurate revenue and margin contribution of the prior year.”

Mr. Cordes added: “During the fourth quarter, the Ironclad team worked diligently with its long-time partner, Orr Safety, to address competitive pressures in the oil & gas markets. We are pleased to report that the Company has landed an important new industrial customer that will begin receiving KONG products in 2014. Additionally, late in the fourth quarter, Ironclad introduced an expanded line of KONG gloves to reinforce the product’s competitive standing within the oil and gas industry. These new products have been well received and are expected to drive growth in 2014.”

Ironclad did not give any sales or earnings projections for 2014 yet. Profile Page

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Enterprise Group, Inc. (E – $1.09) issued two press releases in one day. First, it announced that it had entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and GMP Securities L.P, to issue, on a bought deal basis, 12,000,000 common shares at a price of $1.00 per common share, for aggregate gross proceeds of $12,000,000.

And only a few hours later, the Company announced that it increased the size of its previously announced bought deal to 24,000,000 common shares for aggregate gross proceeds of $24,000,000.

Enterprise will use the net proceeds from the offering to expand the Company’s capital program, as well as for general corporate purposes.

This is an impressive financing by Enterprise Group. The stock more than quintupled since we first featured it on Smallcaps Investment Research less than two years ago, and the ride isn’t over yet. Profile Page

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