Queensland Bauxite Limited (ASX: QBL)

Company Transformation through acquisition- Queensland Bauxite Limited is a listed company that focuses on exploration and development of its bauxite tenements in Queensland and New South Wales. QBL acquired a 55 per cent shareholding in Medical Cannabis Limited (MCL), an Australian leader in the hemp and Cannabis industries. Its main aim is to develop a world-class bauxite province in Eastern Australia and to establish major mining and exporting operations.

Lately, the Company and its subsidiary Medical Cannabis Limited entered into a legally binding agreement to acquire a 100 per cent interest in Medcan Australia Pty Ltd. Medcan is the holder of an Office of Drug Control Medical Cannabis Production License and it will enable the MCL group to legally grow and cultivate high THC and CBD medicinal cannabis products in Australia to supply the new Australian and the burgeoning global markets. This acquisition will be a significant one as it will mark a material milestone for MCL and will complete the journey of fully integrating MCL’s medical division which will further make MCL a leader in the Australian and Global Cannabis industry.


MCL’s Vertical Integration Model (Source: Company Reports)

This acquisition is subject to few conditions like it will be requiring the approval of all necessary shareholders, regulatory bodies and third-parties. The consideration payable to the Vendors for the acquisition of their Medcan shares and units in the Trust will be made through the issue of 250 million QBL shares, in proportion to their share and unit holdings. It is expected that the acquisition will be settled within 5 working days once the conditions will be satisfied. The Company is planning to raise capital under a prospectus to raise up to $5 million, at a price of 8 cents per share so that it can meet the Medcan and MCL acquisition costs. This acquisition would enable the supply of Australian produced medicinal cannabis products in world markets.

QBL is looking for some strategic investment opportunitiesthat can deliver above-average shareholder returns. QBL’s share price declined by 16.95 per cent in last three months. The share price climbed up by 8.2 per cent on 21 June 2018 while the group was under suspension for a few months. It is also expected that demand for Bauxite will continue to remain decent. We give a “Hold” recommendation at the current market price of $0.053 as this transaction can give QBL a better positioning in the Australian Market.

 
Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.