Q3 2025 Quinsam Capital Corp Earnings Call

Speaker #1: Morning. Morning,

Speaker #2: Okay.

Speaker #3: Hello. everybody.

Speaker #1: Hi

Speaker #2: All Hi there. All right. Well, it's 10 o'clock, so we're going to get—hold on, I'm just going to mute people here.

Speaker #3: Hello.

Speaker #2: everybody. And right. Well, welcome, pleased to welcome you to the third quarter Quinsam Conference call. I'm going to assume that everyone's already looked at the results and probably read the press release, so I'm not going to go into what's already there.

Speaker #2: Third quarter, basically, we were slightly in the black, which is not terribly dramatic one way or the other. And there wasn't a lot of activity in the quarter.

Speaker #2: So really, the key update is what's going on here in Q4. We have two of our private investments that are both at this stage looking to list.

Speaker #2: The largest one we've carried it under the name Peninsula. It's announced to go public financing with a syndicate of large investment dealers here in Toronto under the name of Rentax.

Speaker #2: It's a US single-family rental business. It's out there in the market now trying to raise funds at $1.90. Our carrying value is quite a bit below that.

Speaker #2: At this stage, they're in marketing. I understand that it's going sort of okay. We're hopeful that the transaction will complete. There's probably—I'm guessing—some risk in the $1.90 price, but we'll see.

Speaker #2: That's an important development for Q4. And obviously, we hope that it goes ahead. The other go public that we're looking at here in Q4 is a company called Electro Metals.

Speaker #2: That is a relatively traditional Canadian mining story: copper-gold properties. The market, obviously, for mining is relatively good right now. They are awaiting final approval from the exchange to list.

Speaker #2: I understand they're down to the short strokes and that they expect to get final listing approval in the next week or two. And once they have that listing approval, they believe that they have the funds lined up to close and then commence trading.

Speaker #2: So those are probably the two big things in front of us for Q4. Between the two of them, there's about two cents of NAE that are in play here.

Speaker #2: So we hopefully will see the amount of liquid investments move from the $0.06 level up to $0.08, and obviously, hopefully beyond that, with the expected listing prices of both Electro Metals and Peninsula above where we're carrying them.

Speaker #4: Excuse me, Roger. Quick

Speaker #2: Yeah.

Speaker #4: question. Electro Metals, what are they into?

Speaker #2: Well, it's fairly traditional mining story. This is actually a company that we bought quite a long time ago. As a cannabis company, back in the day, it was called Ancient Strains, and it was run by Darrell Hodges, who used to run Jennings Capital.

Speaker #2: And he was a mining guy for most of his life. He's a geologist. He always focused on mining companies. And when the cannabis market turned, he decided to reposition it as a mining play.

Speaker #2: So he's been working with that for the last two or three years. He tried to list about 18 months ago, but obviously, mining markets were much less favorable than they are today.

Speaker #2: And that attempt did not go ahead. He couldn't get the money. But obviously, now we're looking at much more favorable mining markets.

Speaker #4: What's the commodity? Is it gold, or is it?

Speaker #2: It's

Speaker #4: Oh, copper-gold.

Speaker #2: It's most of... It's sort of. Okay. The NAV is copper, but it's got a significant gold byproduct. Both of those commodities are quite strong at this stage.

Speaker #4: Thank you.

Speaker #2: conventional asset. It's Ontario. And it's a pretty—it's a very It's got a resource in place like it's a pretty conventional story, and it should be able to complete its financing and list.

Speaker #2: It's just a question of value, I would say.

Speaker #4: Thank

Speaker #4: So, those are on the private.

Speaker #2: side the two visible situations right in front of us. The other one that is progressing well, I would say, is Asynaptic, which is about two cents of NAV.

Speaker #2: Asynaptic is developing a CBD treatment for epilepsy, and it's about to start a clinical trial. It's been approved by the FDA, and Boston's Children's Hospital is going to do the trial.

Speaker #2: have been working informally on a They also second indication to use the same treatment for Parkinson's. And they've actually been given a $3 million grant by the Michael Fox Foundation to take it from its sort of informal trial.

Speaker #2: It's now basically being given to some patients and has been for about a year. Outside of a formal trial, with very good results. So the Michael J.

Speaker #2: The Fox Foundation is funding it to go into a formal trial for approval for Parkinson's as well, so that it's progressing well. It is hoped to start the U.S. go public process this year.

Speaker #2: It's not going to happen, I don't think, by year-end, but hopefully early in the new year that will begin its march to being public.

Speaker #2: Otherwise, as far as Q4 is concerned, we have one company, New Lock's Gold, which is currently under a cease trade because its financials are late.

Speaker #2: And we decided to be conservative to take it to a valuation of zero in Q3. We definitely do not expect it ultimately to be valued at zero.

Speaker #2: It was trading around 5 or 6 cents before it was halted, and it raised money at 7 cents as recently as about six weeks ago.

Speaker #2: So, we expect it to be back and trading at those sorts of values in and around the end of the year. But to be conservative, we took that down.

Speaker #2: So that hopefully is money in the bank for Q4. We also have a few companies that are at this point, even with the sell-off of the last day or two, above where they were at the end of the quarter, Blue Metric, Neoterex, Royalty Zinc, which won its lawsuit appeal.

Speaker #2: And Cityview Green, which is now a crypto-currency play, no longer a cannabis

Speaker #2: play. So with any luck,

Speaker #4: Q4 will be a decently profitable quarter, but obviously, there's volatility out there, and we'll have to see what happens over the next six weeks or so.

Speaker #4: And with that, open it up to questions. If anyone's got a question, just take yourself off mute and.

Speaker #5: Question, Roger. Anything coming forward

Speaker #5: about a transaction? Transaction.

Speaker #2: So, we've had some very good discussions this quarter with a company that we're quite interested in. It's an American-based company, and because of that, there are some income tax complications for the main shareholders. They obviously don't want it to be a taxable event, but there are some problems in making it not a taxable event for them.

Speaker #2: So, they are kind of mulling some structural and tax issues. But it is quite promising. It's a company that's in a very interesting business.

Speaker #2: It makes nice cash flow. The valuation is reasonable. And their funding requirement is quite appropriate for us. It's they don't really actually have a funding requirement.

Speaker #2: Their cash flow-positive business, so it really, for them, what they find attractive is the ability to raise for them a relatively small amount of money with a small amount of dilution and have a company that would have a very tight float that they would be in a position to influence the share price of.

Speaker #2: So for us, it's quite interesting because we think we would get a quite decent win coming out of the gate. But this tax issue is something that’s got to be solved because if it can't be solved, then they're not going to basically take their whole company value into income tax and pay tax on it when they go public.

Speaker #2: It's just not viable.

Speaker #4: Okay, thank you. Otherwise, I would have to say there's not too much going on. I mean, we certainly could go and do a mining transaction.

Speaker #4: I think quite easily if we chose to. It's really not what I would want to do. I'd much rather get into an operating business with cash flow or very, very near-term cash flow.

Speaker #4: Don't really want to go into a mining exploration situation where it's significantly cash flow negative and you're just kind of hoping for geology to work out your way.

Speaker #4: So that's something that it's certainly fine for an investment or two. I'm happy to make those sorts of investments, but I'm not sure I want to bet the whole portfolio.

Speaker #4: On one mining

Speaker #4: Situation. Yeah, I would have to agree with. All right, that's.

Speaker #5: that.

Speaker #4: good for me. Any other questions? There's no more questions. Thanks for attending and we'll

Speaker #4: talk to people later. Thanks,

Speaker #4: Bye-bye. Roger.