Common Stock: Silver Viper Minerals (TSXV: VIPR)
Current Market Price: $.55 CAD
Market Capitalization: $28.8 million CAD
**Note: All values in this article are expressed in Canadian Dollars (CAD) unless otherwise noted.
Silver Viper Minerals Stock – Summary of the Company
Silver Viper Minerals is a precious metals exploration company focused on Mexico. They own options on 2 exploration stage properties in Sonora Mexico, which they are actively exploring. Silver Viper was founded in 2016 and is headquartered in Vancouver Canada.
Revenue and Cost Analysis
Silver Viper 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, the company had a net loss of $1.9 million compared to a net loss of $3.3 million in 2018. Their largest expenses were exploration related in both years, totaling $1.2 million and $1.9 million in 2019 and 2018 respectively.
Silver Viper Minerals – Royalty and Streaming Agreements
The Clemente project in Mexico is subject to a 2% net smelter royalty.
Balance Sheet Analysis
Silver Viper has a sound balance sheet with low liability levels and a strong liquidity position.
Silver Viper Minerals – Debt Analysis
As of year-end 2019 the company does not have any debt outstanding.
Silver Viper Minerals Stock – Share Dynamics and Capital Structure
As of April 2020, Silver Viper had 58.8 million common shares outstanding. The also had 8 million warrants and 5.4 million options outstanding. Fully diluted shares outstanding is around 72.2 million shares.
Silver Viper has a dilutive capital structure. Investors should carefully consider their place in the capital structure before investing.
Silver Viper Minerals 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 Silver Viper have not made any relevant transactions in the company’s stock in the recent past, providing no signal to investors.
Silver Viper Minerals Stock – 3 Metrics to Consider
Debt to Equity Ratio
Total Liabilities/Total Share Holder Equity
$406 thousand/$3.6 million = .11
A debt to equity ratio of .11 indicates that Silver Viper does not use much debt in its capital structure and relies mostly on equity financing to fund itself.
Working Capital Ratio
Current Assets/Current Liabilities
$3.6 million/$406 thousand = 9
A working capital ratio of 9 indicates a strong liquidity position. Silver Viper should not have a problem meeting its near-term obligations.
Price to Book Ratio
Current Share Price/Book Value per Share.
$.55/$.05 = 11
Based on fully diluted shares outstanding Silver Viper has a book value per share of $.05. At the current market price this implies a price to book ratio of 11, meaning the company’s stock trades at a significant premium to the book value of the company.
Silver Market – Economic Factors and Competitive Landscape
Silver 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 silver companies are poised to benefit from a strong economic tailwind.
Silver Viper Minerals Stock – Summary and Conclusions
Silver Viper owns options on two early stage, but promising properties in Mexico. The company is actively exploring these properties and administrative expenses are reasonable. The company is sound financially, with a strong liquidity position and low liability levels. However potential dilution is a concern for common stock investors.
Silver Viper may be an acceptable investment for highly risk tolerant investors looking for leveraged silver exposure. I am not going to invest in Silver Viper stock, as I would prefer to gain silver exposure through silver producers rather than explorers, for example Fortuna Silver. But I will continue to monitor the company and reconsider should either of their projects advance significantly.
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.
