The junior mining stocks on our list could see much better days ahead
SmallCapPower | March 7, 2017: Today we have identified five junior mining stocks that analysts expect will have significant increases in free cash flow, year over year. Free cash flow (FCF) is a financial performance measurement calculated by subtracting a company’s capital expenditures from its operating cash flows. Since mining is a capital-intensive operation, many companies report negative FCF when they pursue new opportunities. The companies on our list have already spent the cash necessary to maintain or expand their asset bases, and are hopefully ready to enhance shareholder value.
Nemaska Lithium Inc. (TSX: NMX) – $1.33
Specialty Mining & Metals
Nemaska Lithium Inc. is engaged in the exploration and development of hard rock lithium mining properties and related processing of spodumene into lithium compounds. The Company’s activities are in the Province of Quebec, Canada. Its properties include Whabouchi, Sirmac and Lithium Chemicals Complex. The Company owns over two mining properties consisting of approximately 60 claims (Whabouchi and Sirmac) in the Eeyou Istchee/James Bay territory, province of Quebec. The Company also acquired a portion of the land and the Shawinigan Site that will house the Company’s Phase 1 Plant and the Commercial Hydromet Plant that will convert spodumene concentrate into lithium hydroxide and lithium carbonate.
- Market Cap: $417.9 million
- Revenue (LTM): $51.8 million
- Free Cash Flow (FY0): -9.6 million
- Expected Increase in FCF (Y/Y): 642%
Timmins Gold Corp (TSX: TMM) – $0.50
Gold
Timmins Gold Corp. is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de C.V. and Molimentales del Noroeste, S.A. de C.V. (MdN). MdN owns the San Francisco Mine in Sonora, Mexico. MdN also owns the Caballo Blanco Property, an exploration and evaluation asset in Veracruz, Mexico. The Company also holds the Ana Paula gold project, which is an advanced stage development project in the Guerrero Gold Belt.
- Market Cap: $177.6 million
- Revenue (LTM): $27.7 million
- Free Cash Flow (FY0): $-24.5 million
- Expected Increase in FCF (Y/Y): 213%
TMAC Resources Inc. (TSX: TMR) – $15.11
Gold
TMAC Resources, Inc. is a Canada-based mineral exploration and development company involved in the exploration, evaluation and development of the Hope Bay mineral property in the Kitikmeot Region of Nunavut, Canada (Hope Bay Project). The 1,100 square kilometer Hope Bay Project gold deposit has approximately 4.5 million ounces of gold at an average grade of approximately 9.2 grams per ton gold (g/t Au), Inferred Mineral Resources totaling approximately 1.4 million ounces of gold at an average grade of 7.4 g/t Au and Proven and Probable mineral reserves totaling approximately 3.5 million ounces of gold at an average grade of 7.7 g/t Au.
- Market Cap: $1,263.1 million
- Revenue (LTM): $44.7 million
- Free Cash Flow (FY0): $-190.3 million
- Expected Increase in FCF (Y/Y): 123%
Trevali Mining Corp. (TSX: TV) – $1.46
Diversified Mining
Trevali Mining Corporation is a Canada-based natural resource company engaged in the acquisition, exploration, development and production from mineral properties. The Company holds approximately four properties in Canada and has an interest in a property in Peru with an option on a second Peruvian property. The Company, through its subsidiary Trevali Peru S.A.C., operates the Santander underground metallurgical plant and mine located in Peru. It is producing zinc and lead-silver concentrates. In Canada, the Company owns through its subsidiaries, the Caribou mine and mill, the Halfmile mine and the Stratmat polymetallic deposit all located in northern New Brunswick. In Peru, the Company’s Santander mine operations are approximately 2,000 tons-per-day.
- Market Cap: $587.2 million
- Revenue (LTM): $10 million
- Free Cash Flow (FY0): $-43.1 million
- Expected Increase in FCF (Y/Y): 123%
Nevsun Resources Ltd. (TSX: NSU) – $3.36
Specialty Mining & Metals
Nevsun Resources Ltd is a Canada-based base metals mining company engaged in the acquisition, exploration, development and operation of mineral property interests. Its segment is the mining business in Africa. Its principal property is the Bisha Property, which hosts a gold, copper and zinc deposit, and includes satellite volcanogenic massive sulfides (VMS) deposits at Harena, Northwest, Hambok, Aderat and Asheli. The Company’s principal mining operation is the Bisha Mine, an open pit copper-zinc mine. The Bisha Mine is located approximately 150 kilometers west of Asmara, over 40 kilometers southwest of the regional town of Akurdat and approximately 50 kilometers north of Barentu, the regional or zone Administration Centre of the GashBarka District, in Eritrea. The Company also develops the Timok copper and gold project, which is located in Serbia.
- Market Cap: $1,011.5 million
- Revenue (LTM): $-18.1 million
- Free Cash Flow (FY0): $-266.6 million
- Expected Increase in FCF (Y/Y): 93%
