Common Stock: Radisson Mining Resources (TSXV: RDS)
Current Market Price: $.235 CAD
Market Capitalization: $44.6 million CAD
**Note: All values in this article are expressed in Canadian Dollars (CAD) unless otherwise noted.
Radisson Mining Stock – Summary of the Company
Radisson Mining Resources is a mineral resource company focused on the acquisition, exploration, and development of gold properties in Canada. The own a 100% interest in 2 properties in Quebec; The O Brien property and The Douay property. The company was founded in 2983 and is headquartered in Quebec, Canada.
Revenue and Cost Analysis
Radisson does not have any producing properties 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.
The company has a net loss of $497 thousand in 2019. Their largest expenses were compensation related, including share based compensation.
Radisson Mining – Mineral Resources
The O Brien property has “indicated and inferred” resources totaling 289,400 and 145,000 ounces of gold respectively.
Balance Sheet Analysis
Radisson has a solid balance sheet with sufficient liquidity and low liability levels.
Radisson Mining – Debt Analysis
As of year-end 2019 the company does not have any debt outstanding.
Radisson Mining Stock – Share Dynamics and Capital Structure
As of December 2019, the company has 189.6 million common shares outstanding. They also have significant amount of warrants and options outstanding. Fully diluted shares outstanding is around 213.6 million.
Radisson has a dilutive capital structure. Investors should carefully consider the effects of dilution before investing.
Radisson Mining 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 Radisson Mining have been net buyers of the common stock recently. This is generally viewed as a bullish signal for the stock.
Radisson Mining Stock – 3 Metrics to Consider
Debt to Equity Ratio
Total Liabilities/Total Share Holder Equity
$3.7 million/ $21.7 million = .17
A debt to equity ratio of .17 means Radisson has some debt, but is financed mostly with equity capital.
Price to Book Ratio
Current Share Price/Book Value per Share.
$.24/$.10 = 2.4
Based on fully diluted shares outstanding, Radisson has a book value per share of $.10. At the current market price this implies a price to book ratio of 2.4, meaning the company’s stock currently trades at a premium to the book value of its assets.
Working Capital Ratio
Current Assets/Current Liabilities
$9.3 million/$670 thousand = 14
A working capital ratio of 14 indicates a strong liquidity position. The company should not have problems meeting its near-term obligations.
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.
Radisson Mining Stock – Summary and Conclusions
The company owns 2 properties in a well-established mining region. The company is in good financial health with low liability levels and strong liquidity.
However, the company is not spending much on exploration and has a highly dilutive capital structure. Although the company has potential, because of the capital structure and expense profile of the company, I would not invest in Radisson Mining Stock.
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.
