Wallbridge Mining Company Ltd

Wallbridge Mining Company Ltd (TSX: WM) is an industrial metal company based out of Canada and is engaged in the business of discovering, developing, and producing platinum group metal, nickel, copper, and gold mineral deposits.

Financial Highlights – Controlled Operating Expenses in Q1 FY2020 (31^st March 2020)

(Source: Quarterly Report, Company Website) 

In the first quarter of the financial year 2020, the group is in the development stage and do not generate any revenue for the period. Driven by higher other income and controlled expenses for the period, the group reported a PBT (profit before tax) of CAD 145,410 in the first quarter for the financial year 2020 as against an LBT (loss before tax) of CAD 204,638 in the first quarter of the financial year 2019. Due to higher deferred taxes for the period, the group’s Net loss increased to CAD 2,284,590 in the first quarter of the financial year 2020 versus a net loss of CAD 338,638 in the first quarter of the financial year 2019. The cash balance as on 31^st March 2020 stood at CAD 45,870,478 as against a cash balance of CAD 57,093,881 as on 31^st December 2019. The total assets as on 31^st March 2020 stood at CAD 115,072,483 as against total assets of CAD 115,704,138 as on 31^st December 2019.

Share Price Performance

 Daily Chart as of 22 May 2020 (Source: Refinitiv, Thomson Reuters)

WM shares are trading CAD 1.17 at the time of writing on 22 May 2020. Stock's 52 weeks High is CAD 1.22 and Low is CAD 0.265.

Conclusion

The Group is in the development stage and hence rely on grants and cash balances to carry on all the business activities, and the bottom-line performance has declined, with a decline in the profitability for the period. The Group introduced new technologies and techniques to upgrade its portfolio of services and products to meet the requirements of faster pace commodity market. The Company is well-positioned to take benefits from growth trends across the energy and industrial markets. WM is able to manage its operating expenses effectively and delivered a positive pre-tax income for the period. Due to Covid-19, the group suspended its exploration activities and has commenced its exploration activities on 18^th May 2020 after receiving clearance from the Government authorities. WM has enabled remote access, and employees are preparing for maintaining a company’s project related to engineering studies, geologic interpretation, exploration targeting and modelling. This has been an exciting period for WM as it continues to develop and explore its Quebec based Fenelon Gold project and is at an advanced stage with production activities to be carried soon.

Based on the above rationale, we have given a “Hold” recommendation at the current price of CAD 1.17 (as on 22 May 2020).

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