A new report issued by the highly reputable rating agency firm Moody’s, talks of bankruptcies within the fields of mining and oil & gas beginning to escalate. Overall, investors should be cautious of mining investments at this moment, however, the mining stocks on our list today have healthy levels of debt and profitability – in other words, are outperformers within the industry.
“It is estimated that global speculative-grade (rating of BB+ and below) corporate defaults will increase by more than 30% in 2016 and reach the highest level since 2009.”
– Moody’s
Looking at the publicly listed Canadian mining companies with a market cap of $100 million – $2 billion, the aggregate Debt to EBITDA ratio is 6.5. This ratio analyses the indebtedness of companies by looking at its ability to finance outstanding debt with operating profits. A ratio of 6.5 indicates that the company would need 6 and a half years’ worth of EBITDA to pay off the debt. Overall, investors should be cautious of mining investments at this moment, however, the mining stocks on our list today have healthy levels of debt and profitability – in other words, are outperformers within the industry.
Great Panther Silver Ltd. (TSX: GPR) – $0.93
Mining Support Services & Equipment
Great Panther Silver Limited is a primary silver mining and exploration company. Its activities are focused on the mining of precious metals from its two wholly-owned mining operations in Mexico: the Guanajuato Mine Complex, which includes the San Ignacio Mine, and the Topia Mine in Durango.
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Market Cap: $127,541,345
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Revenue (LTM): $70,466,000
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Total Debt (LFQ): $0
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EBITDA (LTM): $7,701,000
Sandstorm Gold Ltd. (TSX: SSL) – $4.09
Gold
Sandstorm Gold Ltd. is a resource-based company that acquires gold and other precious metal purchase agreements (Gold Stream) from companies that have stage development projects or operating mines. It has interests in operations including the Aurizona Mine and the Serra Pelada Mine located in Brazil, the Santa Elena Mine located in Mexico, the Emigrant Springs Mine and the Mt. Hamilton Project located in the United States of America, the Deflector Project located in Australia, the Gualcamayo Mine located in Argentina, MWS located in South Africa, the Hugo North Extension and Heruga projects located in Mongolia, the Karma Project located in Burkina Faso and each of the Ming Mine, the Black Fox Mine, Bachelor Lake Mine, Prairie Creek Project and the Bracemac-McLeod Mine located in Canada.
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Market Cap: $485,376,397
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Revenue (LTM): $69,260,357
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Total Debt (LFQ): $0
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EBITDA (LTM): $40,649,215
Osisko Gold Royalties Ltd. (TSX: OR) – $13.67
Gold
Osisko Gold Royalties Ltd (Osisko) is a Canada-based company engaged in the business of acquiring and managing precious metal and other royalties and similar interests in Canada and worldwide. The Company owns a 5% net smelter royalty (NSR) on the Canadian Malartic mine in the Abitibi Gold Belt, south of the Town of Malartic in the Province of Quebec. Canadian Malartic mine is operated by the Canadian Malartic General Partnership created by Agnico Eagle and Yamana. Osisko owns 2% NSR royalty on the Upper Beaver project and on the Kirkland Lake properties. The Company owns a 2% NSR royalty on the Hammond Reef Project, which is located near Atikokan in Ontario. The Company also owns 2% NSR on the Pandora property, which is located near Agnico Eagle’s Lapa Mine near Cadillac, Quebec and 2% NSR on tin properties in the Yukon.
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Market Cap: $1,444,992,122
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Revenue (LTM): $40,212,000
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Total Debt (LFQ): $0
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EBITDA (LTM): $14,752,000
Silvercorp Metals Inc. (TSX: SVM) – $1.09
Non-Gold Precious Metals & Minerals
Silvercorp Metals Inc., along with its subsidiary companies, is engaged in the acquisition, exploration, development, and mining of precious and base metal mineral properties. The Company’s producing mines and other exploration and development projects are in China. Silvercorp is the primary silver producer in China through the operation of several silver-lead-zinc mines at the Ying Mining District in Henan Province, China.
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Market Cap: $180,906,565
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Revenue (LTM): $142,430,397
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Total Debt (LFQ): $0
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EBITDA (LTM): $44,920,614
Labrador Iron Ore Royalty Corp. (TSX: LIF) – $10.91
Iron & Steel
Labrador Iron Ore Royalty Corporation (LIORC) is a Canada-based mining company. The Company owns interests in Iron Ore Company of Canada (IOC) that operates an iron mine near Labrador City, Newfoundland and Labrador on lands leased from LIORC. The Company through its wholly-owned subsidiary, Hollinger-Hanna Limited, owns a 15.10% equity interest in IOC and receives a 7% gross overriding royalty on all iron ore products produced from the leased lands, sold and shipped by IOC and commissions on sales of iron ore by IOC. IOC is a Canada-based iron ore producer, operating a mine, concentrator and pellet plant at Labrador City, Newfoundland.
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Market Cap (mm): $641,920,000
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Revenue (LTM): $105,474,540
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Total Debt (LFQ): $0
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EBITDA (LTM): $82,187,480
