Has TSX WM ship already sealed?

0
0

TSX WM stock keeps going up, yet profits are not expected in the next two years or so. However, they may happen to have more gold than they thought in their Fenelon site. Price to book ratio is above the industry….Im hesitating….Thoughts on this?

Thanks!

Marked as spam
Asked on May 8, 2020 9:06 am
3 views
0
Private answer

Hi there,

As you pointed out WM is not yet profitable and is trading above industry averages. It is also a one-mine operation which brings with it additional risk. Any misstep and it would send the price crashing.

Consensus is that it also paid a steep premium for Balmoral Resources to acquire the mine adjacent to Fenelon.

The company is now estimating 70-80K ounces in 2020, down from 100k resources previously. This is primarily due to COVID-19 setbacks. It has a long-term goal of reaching 100k ounces annually over the next five years. It seems like the recent run-up is already taking this into account.

IMO, it takes a high degree of risk tolerance to invest in these types of junior producers.

Mat

Marked as spam
Posted by Mathieu Litalien
Answered on May 10, 2020 2:44 pm