Canadian capital markets can be eager to lend money to resource project developers, although this lending gets risky when a junior is in the business of exploring for resources up to a point where the majority of its balance sheet is purely financed with lender’s funds. The following stocks are non-revenue generating junior miners with a dangerously high level of Long Term Debt to Total Assets, a liquidity measure to assess a company’s financial health and ability to repay lenders. Keep in mind that such a ratio should generally be within the 15%-30% range.
Gold Reserve Inc. (TSXV: GRZ) – $4.52
Gold
Gold Reserve Inc. (Gold Reserve) is an exploration stage company that is engaged in the business of acquiring, exploring and developing mining projects. The Company’s projects include Brisas Project and La Tortuga property. Brisas Project is located in the historic Km 88 mining district of the State of Bolivar in southeastern Venezuela. The Brisas deposit contains ore reserves of 10.2 million ounces of gold and 1.4 billion pounds of copper.
- Market Cap: $342,032,086
- Long Term Debt to Total Assets: 105.5%
- Revenues: $0.00
Nevada Copper Corp. (TSX: NCU) – $1.90
Specialty Mining & Metals
Nevada Copper Corp. (Nevada Copper) is a development-stage mining company. Its principal asset is its 100% owned Pumpkin Hollow property located in north-western Nevada, approximately 90 miles southeast of Reno. The property consists of a contiguous 26 square mile land package held under a lease agreement by the Company consisting both patented and unpatented claims. The Company’s Pumpkin Hollow project consists of a fully permitted, 6,500 tons/day Stage 1 underground copper mine development, and a nearby Stage 2, 70,000 tons/day open pit mine copper project in the advanced permitting phase. Pumpkin Hollow is a high grade Iron Oxide Copper Gold (IOCG) deposit within a porphyry copper district.
- Market Cap: $152,135,043
- Long Term Debt to Total Assets: 40.6%
- Revenues: $0.00
Largo Resources Ltd. (TSXV: LGO) – $0.80
Diversified Mining
Largo Resources Ltd is a Canada-based mining development company focused on the production of vanadium at its Maracás Menchen Mine in Brazil. Projects include Maracas, Currais Novos, Northern Dancer and Campo Alegre de Lourdes. The Campo Alegre de Lourdes is an approximately 9,275-hectare property located 875 km north-northeast of Brasilia and 650 km northwest of Salvador and hosts a large iron, titanium and vanadium deposits. The Maracás Menchen Mine in Bahia, Brazil has vanadium resource and is lowest cost producer in the vanadium market. The Currais Novos deposit is tungsten deposit in Latin America. It is located 179 km from Natal in the State of Rio Grande do Norte, Brazil. The project produced tungsten concentrate from the processing of tailings material left from the Barra Verde and Boca de Laje mines.
- Market Cap: $86,942,848
- Long Term Debt to Total Assets: 40.2%
- Revenues: $0.00
