Sheldon Inwentash's Pinetree Capital has acquired 18 million shares of Allen Lone's Augusta Industries (TSXV:AAO) at 5 cents in a private placement (market price for AAO has been 2-3 cents recently), bringing PNP's total ownership of AAO to approximately 60 million shares or 28.5% of the company. To pay for the financing, Pinetree swapped 3 million of its own shares to Augusta, which presumably Augusta can sell in the open market to raise funds (worth approx. $780,000 today), after the normal four month hold period.
WTF is Augusta Industries?
Augusta Industries (TSXV:AAO) owns Fox-Tek, which provides pipeline corrosion monitoring products and services to oil and gas industry clients like Saudi Aramco, Enbridge and others.
According to its Web site:
Augusta Industries Inc. (AAO) is engaged in the development, design, manufacture and supply of systems using fiber optic sensors, related monitoring instruments, and software. Clients either buy systems and operate them, or FOX-TEK handles the installation and reporting of information on an outsourcing basis. For either choice, FOX-TEK provides support engineering services related to planning, training, on-site installation, and data interpretation and reporting.
Augusta hasn't had any news flow over the past year, but we discussed the company with CEO Allen Lone a few weeks ago. Apparently, Mr. Lone took over the company in 2011 and has been focused on cleaning it up, reducing overhead, and generating new Fox-Tek business, with a focus internationally, rather than stock promotion. He told me he intends to raise the company's profile in 2014. If I can remember correctly, Mr. Lone owns approximately 50% of the Augusta, on top of Pinetree's 28.5%. I am currently waiting to have a call with one of Fox-Tek's customers to gain feedback on the company.
News Release: Pinetree Capital Ltd. Acquires Securities of Augusta Industries Inc.
Related: Pinetree Capital Ltd. Acquires Securities Of Integra Gold Corp.
Do your own due diligence.