Common Stock: Brigadier Gold (TSXV: BRG)
Current Market Price: $0.29 CAD
Market Capitalization: $17 million CAD
**Note: All values in this article are expressed in Canadian Dollars (CAD) unless otherwise noted.
Brigadier Gold Stock – Summary of the Company
Brigadier Gold is a precious metals exploration company focused on the acquisition, exploration, and development of mineral properties. There are currently focused entirely on their Picachos property in Sinaloa Mexico. Brigadier Gold was founded in 1996 and is headquartered in Toronto Canada.
Revenue and Cost Analysis
Brigadier Gold does not have any properties that are currently producing and therefore does not have any revenue. The company consistently runs a net loss and is likely to continue to do so for the foreseeable future.
In 2019 Brigadier had a net loss of $495 thousand. Their largest expenses were compensation related.
Brigadier Gold – Royalty and Streaming Agreements
The company’s most recent audited financial report makes no mention of any royalty or streaming agreements
Brigadier Gold – Mineral Resources
The company does not have any defined resources yet, as they will begin their maiden drill program soon.
Balance Sheet Analysis
Brigadier has a simple and sound balance sheet. Liquidity is sufficient and liability levels are low.
Brigadier Gold – Debt Analysis
As of year-end 2019 the company does not have any debt outstanding.
Brigadier Gold Stock – Share Dynamics and Capital Structure
As of October 2020 Brigadier has 58.5 million common shares outstanding. In addition they have 27.5 million warrants outstanding. Fully diluted shares outstanding is around 86 million shares.
Brigadier has a dilutive capital structure. Investors should consider the effects of dilution before investing.
Brigadier Gold Stock – Dividends
The company does not pay a dividend and is unlikely to do so for the foreseeable future.
Management – Skin in the game
Insiders at Brigadier Gold have not made any relevant transactions in the company’s stock recently, providing no signal to investors.
Brigadier Gold Stock – 2 Metrics to Consider
Debt to Equity Ratio
Total Liabilities/Total Share Holder Equity
$129 thousand / $172 thousand = .75
A debt to equity ratio of .75 indicates that Brigadier uses a mix of debt and equity in its capital structure but relies slightly more on equity financing to fund itself.
Working Capital Ratio
Current Assets/Current Liabilities
$293 thousand/ $129 thousand = 2.2
A working capital ratio of 2.2 indicates sufficient liquidity. Brigadier should not have problems meeting its obligations in the near term.
Gold Market – Economic Factors and Competitive Landscape
Gold mining is a highly competitive, capital intensive business. The company will need to compete fiercely for both new projects and capital. However, given the current economic environment of global money printing and zero or negative interest rates, it would appear gold companies are poised to benefit from a strong economic tailwind.
Brigadier Gold Stock – Summary and Conclusions
Since their most recent annual report Brigadier has raised $4.2 million to fully fund its current drill program. The company is in a sound position financially and it appears they will begin their maiden drilling soon.
I would not and will not invest in Brigadier Gold stock for several reason. Most important is that it is a single asset drill story, in a riskier jurisdiction, that hasn’t even begun its maiden drill program yet. It also has a dilutive capital structure. Finally in their most recent annual report management mentions that “Historically the Company has conducted exploration and development of mineral properties and more recently briefly focused its efforts in the biotech/medical device marketplace.” I look to invest in teams that are 100% focused on their particular industry.
If I were looking to allocate to a similar company in the region with a better risk/return I would consider Chesapeake Gold.
Disclaimer
This is not investment advice. Nothing in this analysis should be construed as a recommendation to buy, sell, or otherwise take action related to the security discussed. If I own a position in the security discussed, I will clearly state it.
This is not intended to be a comprehensive analysis and you should not make an investment decision based solely on the information in this analysis. I hope this serves as a useful starting point for a more comprehensive analysis, and hopefully draws attention to aspects of the company that were overlooked or merit further investigation. This is by no means intended to be a complete analysis. Again, this is not investment advice, do your own research.
