5 Canadian Juniors with Big Liquidity Issues

The Canadian juniors on our list may have trouble meeting short-term obligations

SmallCapPower | July 25, 2017: If a company cannot meet its short-term obligations, it could mean disaster. It does not necessary mean the business will go under, but the company’s options to pay off the obligations would not be beneficial to shareholders. Two common measures of liquidity are the current ratio and working capital. The current ratio is calculated as current assets over current liabilities and working capital is calculated as current assets minus current liabilities. Ideally, companies would like a current ratio over 1 and positive working capital. Today we have identified five Canadian juniors with current ratios under 0.5x and negative working capital.

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Greenbriar Capital Corp. (TSXV: GRB) – $1.08
Real Estate Rental, Development & Operations

Greenbriar Capital Corp. is a developer of renewable energy and sustainable real estate projects. The Company operates through two segments: Canada and the United States of America (USA). The Company is focused on acquisition, permitting, re-zoning, management, development and possible sale of commercial, residential, industrial, and renewable energy related real estate and energy projects in North America. It is engaged in acquisition and development of wind and solar energy projects in Utah and Puerto Rico, the United States. It holds interest in The Blue Mountain Wind Project, which is an approximately 80 megawatt alternating current (AC) renewable generating wind facility located in Southeastern Utah near the city of Montecito in San Juan County.

  • Market Cap: $15,563,905
  • Working Capital: -$5,225,010
  • Current Ratio: 0.01x

PetroShale Inc. (TSXV: PSH) – $1.24
Oil & Gas Exploration and Production

PetroShale Inc. (PetroShale) is a Canada-based oil company engaged in the acquisition, development and consolidation of interests in the North Dakota Bakken/Three Forks. The Company operates in the production of petroleum and natural gas and the exploration for and development of oil and natural gas properties segment. The Company and its subsidiaries operate in two geographical segments, namely, Canada and the United States. The Company owns interests in certain oil and natural gas leases beneath the Missouri River in North Dakota.

  • Market Cap: $185,440,550
  • Working Capital: -$148,151,000
  • Current Ratio: 0.10x

Senator Minerals Inc. (TSXV: SNR) – $1.20
Diversified Mining

Senator Minerals Inc. (Senator) is a junior exploration company engaged in the business of acquiring, exploring and evaluating mineral resource properties, and either joint venturing or exploring and evaluation these properties further or disposing of them when the evaluation is completed. The Company holds interests in the IC Bentonite property in Nevada.

  • Market Cap: $40,001,995
  • Working Capital: -$206,670
  • Current Ratio: 0.02x

Holloway Lodging Corp. (TSX: HLC) – $5.69
Hotels, Motels & Cruise Lines

Holloway Lodging Corporation is a Canada-based hospitality company that owns and operates hotels across Canada. The Company is a real estate company focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. The Company is engaged in property management, accounting, sales, purchasing, maintenance and asset management. The Company owns and operates approximately 30 hotels and holds interest in a hotel in Canada, with approximately 3,970 guest rooms. The Company’s approximately 26 hotels are limited service properties.

  • Market Cap: $107,031,437
  • Working Capital: -$111,963,000
  • Current Ratio: 0.13x

Aurania Resources Ltd. (TSXV: ARU) – $2.40
Diversified Mining

Aurania Resources Ltd. is a Canada-based junior exploration mining company engaged in the identification, evaluation, acquisition and exploration of mineral property interests with a focus on precious metals. The Company operates in the segment of mineral exploration in Switzerland. The Company is focused on identifying and evaluating potential exploration projects, and expanding the asset base and advancing exploration on the Company’s Swiss mineral property interests. The Company owns interest in over three exploration permits in the Canton of Valais, through its subsidiary AuroVallis Sarl (AVS). Its exploration permits include Mont Chemin Project (gold-silver), Marecottes Project (uranium) and Siviez Project (uranium-copper-gold-silver).

  • Market Cap: $54,402,059
  • Working Capital: -$634,900
  • Current Ratio: 0.05x

Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.

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