Wallbridge Mining Co Ltd (TSX: WM) is a Canada-based company engaged in discovery, development and production of gold, copper, nickel and platinum group metal (PGM) mineral deposits. The Company is focused on development of its Fenelon Gold Property (Fenelon Gold), located in northwestern Quebec.

Key highlights 

• Impressive Drilling result: As of late, the organization announced new outcomes from its definition drill program at the Fenelon Gold Property. The outcome incorporates solid gold convergences and affirms the evaluation and calculation of the focal parts of the Tabasco-Cayenne and Area 51 Zones. Strikingly, the Company expects a chance of mineral hold from the above property in H2 2021 onwards. In addition, the land package Detour–Fenelon territory offers long-haul natural development potential, with the capacity to investigate multi-million ounces of gold.

• Guidance on Fenelon Gold:The Company's essential investigation exercises are centered around Fenelon Gold which has been extended from 10.5 km2 to 85 endless supplies of the securing exchange with Balmoral. Its full-year 2021 exploration guidance on Fenelon Gold is expected to be approximately 170,000 metres of diamond drilling and 2,500 metres of underground exploration development. Exploration drilling will focus on the Area 51, Tabasco, Cayenne zones.

• Positive Long-term Prospect: Gold, as an asset class, has given exponential return in the past, and the long-term prospect of Gold remains bright, supported by economic cycles, declining interest rates etc. We expect the momentum to continue, which is positive for the group.

Financial overview of Q2 2021 (expressed in Canadian Dollars) 

Source: Company 

• Recently, the company announced its Q2 2021 result, wherein the group reported an income before income taxes of CAD 2.0 million, against a loss of CAD 1.1 million in the previous corresponding period (pcp). The change was due to other income relating to flow-through share premium, however, it reported higher general and administrative expenses and unrealized loss on marketable securities.
• Net loss for the period minimized to CAD 0.8 million, against CAD 1.3 million in pcp.
• The group reported cash and cash equivalents of CAD 71.5 million.
  

Risks associated with investment

The Company is still primarily in the exploration and development stage, and accordingly, all costs related to the acquisition, exploration and development of its mining interests are deferred. It expects to incur considerable costs in its ongoing exploration programs and the initial stages of development. Moreover, any setback to the drilling activities or negative outcome of the drilling program would affect the business prospect. 

Stock recommendation

In 2021, the Company intend to complete 170,000 meters of drilling program from Fenelon Gold Property. Furthermore, the Company has ramped up its drill program in support of the NI 43-101 MMRE by the end of the third quarter of 2021. Moreover, the long-term prospect of Gold remains bright, supported by economic cycles, declining interest rates etc. We expect the momentum to continue, which is positive for the group.

On the valuation front, the stock is available at a median price to book value of 1.5x on a TTM basis compared to the industry (Basic Materials) median of 2.1x. Hence considering the aforesaid facts, we recommend a “Speculative Buy” recommendation on the stock at the closing price of CAD 0.57 on October 26, 2021.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Technical Analysis Summary:

One-Year Technical Price Chart (as on October 26, 2021). Source: REFINITIV, Analysis by Kalkine Group

*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.