Blackrock Silver Corp

Blackrock Silver Corp (TSXV: BRC) is a junior silver-focused exploration company. It is focused on its Nevada portfolio of properties consisting of low-sulphidation epithermal gold and silver projects. Its flagship project is Tonopah West silver-gold project located in the Walker Lane of Nevada.

Key highlights 

• Update on Tonopah West Project: Last year, the Company announced exploratory intentions for its Tonopah West Project, which is located in the Walker Lane trend of western Nevada. The company has set its eyes on five major sectors that have a lot of potential. All five target regions were drilled, with the Victor and DPB targets yielding substantial findings. Drilling has been completed in 81 drillholes for a total of 43,800 meters. While exploration continues to step out and discover additional vein prospects in the DPB region, an in-fill core program is ongoing.

• Sitting on prolific gold and silver belts: The Company holds key interests in two productive low-sulphidation epithermal areas in Nevada, the Silver Cloud Project and the Tonopah West Project. These two important projects offer the Company with a major position on two productive gold and silver belts in Nevada, with a presence on both the Walker Lane and the Northern Nevada Rift.
  

• Boosting liquidity through Bought Deal Private Placement: The business recently completed its previously announced bought deal private placement offering, in which it issued a total of 13.33 million of units at a price of CAD 0.75 per Unit for gross proceeds of CAD 10.0 million. One common share of the Company and one-half of a Common Share purchase warrant were included in each Unit. Until June 8, 2023, each Warrant enables the bearer to purchase one Common Share at a price of CAD 1.15 per Common Share. The proceed would be used to investigate deeper expansions of the high-grade vein system at the Tonopah site.
  

 Financial overview of Q1 2021 (Expressed in Canadian Dollars)

Source: Company 

• As on date, the Company had no revenue from its mineral property interests.
• In Q1 2021, the company posted higher exploration expenditures, which increased to CAD 3.6 million compared to CAD 0.48 million in the previous corresponding period. The increase was mainly due to significant exploration program at Tonopah West Project.
• Due to continued ramping up of exploration work on the Silver Cloud property and at Tonopah West Project, the operating expenses increased to CAD 0.87 million against CAD 0.43 million in pcp.
• Net loss reported by the group escalated to CAD 4.5 million in Q1 2021 against CAD 0.92 million in pcp.
  

Risks associated with investment

The group is in exploration stage and any negative outcome from the drilling programs would affect the business prospect. Further, the management plans to continue to pursue equity and debt financing to support operations. These plans may be adversely impacted by factors including uncertain market conditions and commodity prices. 

Stock recommendation 

The company’s business model its capital intensive in nature and expects capital expenditures to increase further. Due to the absence of income and increasing losses, the group might face liquidity issues, which would further dampen the company’s overall performance. The company is still in the drilling and exploration phase and has not shared any information regarding the revenue realization. Moreover, any negative outcome from the drilling program would affect the business prospect. Hence, considering the aforementioned facts, we prefer to remain on the sideline and recommend an ‘Avoid’ rating on the stock at the closing price CAD 0.93 on July 14, 2021.

One-Year Technical Price Chart (as on July 14, 2021). Source: REFINITIV, Analysis by Kalkine Group 

Mission Ready Solutions Inc

Mission Ready Solutions Inc. provides personal protective solutions to the global defense, security, and first-responder markets in Canada and the United States.

Why Investor Should Sell the Stock?

• The stock is hovering in a steep bearish zone, and traded below the immediate, short-term as well as long-term support levels of 5-day, 10-day, 20-day, 30-day, 50-day, 100-day and 200-day SMAs.
• The leading momentum indicator, the MACD is falling consistently with negative spread between short-length 12-day EMA and long-length 26-day EMA respectively.
• Further, on the last trading session its shares breached its long-term support level of 200-day SMA and entered into a long-term bearish zone.
• On the valuation front, the stock is trading at a Price to Cash Flow Multiple of 11.56x on TTM basis, which is higher compared to the industry average of 7.11x.

Technical Price Chart (as on July 14, 2021). Source: Refinitiv (Thomson Reuters), Analysis by Kalkine Group

Stock Recommendation: Considering a strong technical weakness and stretched valuation compared to the industry, we recommend a “Sell” rating on the stock at the closing price of CAD 0.37 on July 14, 2021.

*The reference data in this report has been partly sourced from REFINITIV.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.