Voyageur Pharmaceuticals Ltd (TSX-V:VM, OTC:VYYRF) said it has initiated its marketing campaign to introduce SmoothX barium sulfate computed tomography (CT) contrast media to the CT Imaging market in Canada and also announced a proposed non-brokered private placement to raise up to C$650,000.
SmoothX is a generic oral barium sulfate contrast media product, designed to assist in diagnosing disease using CT scans. It works by coating the gastrointestinal track with barium sulfate, so that diseased or damaged areas become visible by the CT scan.
WATCH: Voyageur Pharmaceuticals rolls out SmoothX product launch
Voyageur said it continues to build out its full integration strategy for the diagnostic imaging market. The company has completed the design of its Frances Creek (FC) barium processing facility and initiated a notice of work for the intent to extract 2,000 tonnes from the FC high-grade barium sulfate project in 2023, with full-scale quarry mining planned in 2024 pending approval of the quarry permit.
The Frances Creek property contains an indicated resource of 214,800 tonnes grading 35.2% barium sulphate (BaSO4) and an inferred resource of 134,200 tonnes of 33.9% BaSO4. The grade is very rare, high purity, and is suitable for the radiology pharmaceutical industry, the company noted.
By selling the barium sulfate as contrast media, Voyageur expects to achieve high gross margins, which is verified in a preliminary economic assessment (PEA) by SGS Canada Inc.
Barium sulfate is a critical strategic mineral and natural sources of pharmaceutical-grade barium are no longer available in the market, Voyageur noted. Based on its attempts to source natural active pharmaceutical ingredients (API) grade barium sulfate from the US, China, and Europe, the company has confirmed that it owns the only natural occurring pharmaceutical grade barium project in the world, that is ready to move towards production.
All current sources of pharmaceutical-grade barium sulfate are expensive man-made synthetic products. With increased geopolitical issues and an ongoing supply chain crisis, Voyageur is positioning itself to be the only fully integrated radiology drug company in the industry, creating a North American secure supply chain to ensure low-cost contrast media pharmaceuticals are available to meet future healthcare demands.
Voyageur highlighted several critical milestones it has achieved that support advancement of the project towards production and generation of positive cash flow:
- The launch of a marketing and sales campaign for its generic contrast media smoothie line, currently being produced by a third-party manufacturing company;
- Completion of the design of a pharmaceutical processing plant to manufacture pharmaceutical grade barium sulfate from FC and manufacture iodine contrast from imported iodine active pharmaceutical ingredients;
- Completion of PEA by SGS Canada, resulting in a $344 million net present value (NPV) with 137% internal rate of return (IRR) and 75% gross margins on the Frances Creek project;
- Submission of notice of work for the extraction of 2,000 tonnes from the Frances Creek project, which is planned for 2023; and
- Implementation of a carbon-neutral strategy to decarbonize the project from the mine to the manufacturing plant utilising Rain Cage Carbon Inc.'s carbon capture technology. The company has signed a memorandum of understanding with Rain Cage Carbon.
Non-brokered private placement
Turning to financing, Voyageur said it is proposing a non-brokered private placement of up to 9,285,714 units at a price of $0.07 each, for gross proceeds of up to C$650,000.
Each unit comprises one common share and one common share purchase warrant, with each warrant exercisable at $0.12 for 24 months from closing.
Voyageur said it may pay a cash commission or finder's fee to qualified non-related parties of up to 8% of the gross proceeds (up to $52,000) and issue broker warrants equal to up to 8% of the number of units sold in the offering (up to 742,857 broker warrants).
Each broker warrant will entitle the holder to acquire one common share at a price of $0.07 apiece for a period of one year from the date of issuance.
The common shares and warrants issued will be subject to a four-month hold period from the date of the closing of the offering.
The gross proceeds will be used to advance Voyageur’s project as follows:
- Commissions & Offering Costs - $35,000
- SmoothX & Corporate Marketing - $175,000
- FDA EMA Testing - $180,000
- Legal - $50,000
- Auditing fees - $60,000
- Corporate G&A - $150,000
The offering is being made to all existing Voyageur shareholders who are permitted to subscribe pursuant to the Existing Shareholder Exemption. The offer is open until January 31, 2023. One or more closings are expected to occur, with the first closing anticipated on or about December 21, 2022.
The aggregate acquisition cost to a subscriber under the Existing Shareholder Exemption cannot exceed $15,000 unless that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment, Voyageur said.
Unless the company determines to increase the gross proceeds of the offering, if subscriptions received for the offering based on all available exemptions exceed the maximum amount of C$650,000, units will be allocated pro rata among all subscribers qualifying under all available exemptions.
Completion of the offering is subject to regulatory approval, including the TSX Venture Exchange. Insiders of the company may participate in the Offering.
Voyageur
Voyageur is focused on the development of barium and iodine Active Pharmaceutical Ingredients (API) and high-performance cost-effective imaging contrast agents for the medical imaging marketplace. Its goal is to fully integrate the barium and iodine contrast market by producing its own minerals of barium and iodine.
The company has plans to build a carbon-neutral infrastructure to become 100% self-sufficient across all manufacturing activities. It owns a 100% interest in three Canadian barium sulphate (barite) projects, including the Frances Creek property, suitable in grade for the pharmaceutical marketplace, with additional interests in a high-grade iodine, lithium and bromine brine project in Utah, USA.
Voyageur is advancing its plan to become the only fully integrated carbon-neutral company in the radiology contrast media drug market, by controlling all primary input costs under the motto of 'From the Earth to the Bottle'.
Contact the author at jon.hopkins@proactiveinvestors.com