Quinsam Capital (CNSX:QCA) Chief Executive Officer Roger Dent said the investment company posted its strongest quarterly performance “in a while,” with first-quarter results showing more than CAD 1 million added to net asset value.
Dent told investors on the company’s first-quarter conference call that Quinsam’s NAV is now “nearing CAD 0.12 a share.” He added that the second quarter is also showing positive momentum so far, though he cautioned that there were still about six weeks left in the period.
Mining and phosphate holdings drive NAV gains
Dent identified Nevada Organic Phosphate Inc. and EDM Resources as two of the most important contributors to Quinsam’s recent performance.
Quinsam was a seed investor in Nevada Organic Phosphate before it became public and has added to its position since then, Dent said. He said the company’s valuation has increased significantly since Quinsam first invested.
“When we started out, it had a CAD 1 million valuation, more or less,” Dent said. “It now has just closed a financing of almost CAD 5 million and is sitting with a CAD 30 million, CAD 40 million valuation.”
Dent said Quinsam has sold “quite a bit” of its Nevada Organic Phosphate position but also participated in the company’s financing last week.
EDM Resources was another major contributor. Dent described the investment as a modest purchase made about two years ago in a Canadian mining company seeking to restart a past-producing asset in Nova Scotia. He said Quinsam invested CAD 150,000 in units with full warrants at CAD 0.11, while the stock has recently traded around CAD 0.50.
“When you take the warrants into consideration, [it] means this has been about roughly an eight times return for us,” Dent said.
He said EDM Resources is awaiting permitting and plans to update its preliminary economic assessment. Dent said the company’s plan is to sell after that process, and he believes expectations for a possible premium have helped drive the stock price.
Quinsam exits oil and gas exposure
Dent also noted that Saturn Oil & Gas had performed well following the increase in oil prices after the Iran conflict, but said Quinsam has exited the position.
“At the current time, I think it is correct to say we haven’t got any oil and gas exposure,” Dent said.
Peninsula listing seen as key near-term event
Looking ahead, Dent said the most important near-term variable for Quinsam is the expected listing of Peninsula, a U.S. rental real estate business focused on single-family homes, mostly in the Northeast United States.
Dent said Peninsula has acquired thousands of homes and is seeking to structure itself in a REIT-like manner, including a dividend. He said the company is pursuing a direct listing and estimated it would likely begin trading in July, though June remained possible.
Peninsula is a significant holding for Quinsam, Dent said, and its trading level could materially affect NAV. Quinsam is carrying the investment at $1.30, which Dent said was the price of Peninsula’s last financing. He said Peninsula has an NAV of about $1.90 and is looking to launch with a 3% dividend based on that NAV.
“Can’t really predict where it’s going to trade,” Dent said. “Hopefully, it’s somewhere between the $1.30 and the $1.90, but that will be a very important thing to watch, because it’s probably nearing $0.02 of our NAV at this stage.”
Dent said the risk of Peninsula not listing is “quite low” at this stage. He also said several other portfolio companies may seek listings in coming months, including Longview Gold, Pelican AI and Bond Intelligence. However, he said those investments are relatively small and are not expected to be highly material to NAV.
Dent outlines preferred transaction strategy
In response to a question from John Lewis about Quinsam’s ideal operating-company transaction, Dent said there are multiple possible paths. In a traditional one-transaction model, Quinsam could merge with another entity, effectively exchanging its NAV for shares in that business.
Dent said that if Quinsam’s NAV were about CAD 12 million, an ideal transaction might involve a company valued around CAD 50 million, giving Quinsam investors a meaningful but not controlling stake. He said an attractive scenario would involve a cash-generative operating business acquired at four to five times EBITDA that could trade at six to eight times EBITDA after listing.
He also outlined a smaller-transaction model, in which Quinsam might provide CAD 2 million to CAD 3 million of financing to one or more companies and then dividend the resulting equity investments to Quinsam shareholders.
Dent said he is cautious about committing to a single large investment in cash-negative companies, including life sciences businesses, or in pre-production resource companies. He said resource markets are currently positive but can shift quickly.
California Nanotech discussion highlights nuclear opportunity
Lewis also asked about California Nanotech, noting that Quinsam has a position in the company and that Dent is a director. Dent said the stock had a “fabulous run” before retreating, and said in his opinion it has “over-corrected significantly.”
Dent said California Nanotech has capabilities in nanomaterials, including Spark Plasma Sintering and cryo-milling, and has worked on research projects with major aerospace and industrial companies. However, he said the company has not yet announced a significant sustaining commercial application.
Dent pointed to small nuclear reactors as one area of growing interest. He said California Nanotech produced boron control rods for Valar Atomics in the fall, and the rods were successful in testing at a U.S. nuclear facility. He said the company is seeing interest from small nuclear companies seeking control rods and potentially other products.
“We think commerciality is coming,” Dent said. “We think we’ll have contract announcements in 2026. That’s what we think. It’s not what we know at this stage.”
Dent closed the call by saying Quinsam is optimistic that NAV will remain on a positive trend under current market conditions.
About Quinsam Capital (CNSX:QCA)
Quinsam Capital Corporation operates as an investment and merchant banking firm in small-cap market in Canada. The company primarily focuses on cannabis-related investments. Its activities include acquisitions, advisory services, lending activities, and portfolio investments. The company was incorporated in 2004 and is based in Toronto, Canada.
