Common Stock: Grande Portage Resources (TSXV:GPG)
Current Market Price: $ 0.39 CAD
Market Capitalization: $ 31.9 million CAD
**Note: All values in this article are expressed in Canadian Dollars (CAD) unless otherwise noted.
Grande Portage Resources Stock – Summary of the Company
Grande Portage Resources is a mineral exploration company focused on the acquisition, exploration, and development of gold properties. Their main focus is the Herbert Gold property located in Alaska. The company was founded in 1984 and is headquartered in Vancouver, Canada.
Revenue and Cost Analysis
The company does not own any properties that are currently producing and therefore does not have any revenue. They consistently run a net loss and are likely to continue to do so for the foreseeable future.
For the 6 month period ending April 30, 2020, the company had a net loss of $376 thousand. Their largest expenses were compensation related, including share based compensation.
Grande Portage Resources – Royalty and Streaming Agreements
The Herbert Gold property is subject to an advance royalty of $30,000 USD per year as well as a 5% net smelter royalty.
Grande Portage Resources – Mineral Resources
The Herbert Gold property has indicated resources of 606,500 ounces of gold and inferred resources of 251,700 ounces of gold.
Balance Sheet Analysis
Grande Portage Resources has a simple balance sheet with sufficient liquidity.
Grande Portage Resources – Debt Analysis
As of April 30, 2020 the company does not have any debt outstanding.
Grande Portage Resources Stock – Share Dynamics and Capital Structure
As of January 2021 the company has 78.2 million common shares outstanding. In addition they have 5.6 million options and 19.8 million warrants outstanding. Fully diluted shares outstanding is around 103.6 million shares.
Grande Portage has a dilutive capital structure and investors should consider the effects of dilution before investing.
Grande Portage Resources Stock – Dividends
The company does not pay a dividend and is unlikely to do so for the foreseeable future.
Management – Skin in the game
Since 2019, insiders at Grande Portage Resources have been net buyers of the company’s stock. This is generally viewed as a bullish signal by investors. However the amounts purchased were too small to be of any significance in my opinion.
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.
Grande Portage Resources Stock – Summary and Conclusions
I don’t see any reason to invest in Grande Portage stock. Their financial disclosures are out of date on their website, their capital structure is dilutive, and their planned drill program is limited. I would much prefer to allocate to other exploration stage companies that I view as more promising, such as Orefinders.
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.
