International Tower Hill Mines Ltd

International Tower Hill Mines Ltd (TSX: ITH) is a mining company, which is engaged in the business of mineral exploration. The Group is engaged in the activities related to evaluating, exploring and acquiring mineral properties, through joint ventures.

Financial Highlights – Q1 Financial Year 2020 (31^st March 2020, USD)

(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. The Group managed to reduce its operating expenses to USD 513,426 in the first quarter of the financial year 2020 versus USD 649,571 in the first quarter of the financial year 2019. Driven by lower operating expenses, increased interest income and foreign exchange gain for the period, the Group reported a Net Income of USD 65,085 in the first quarter of the financial year 2020 versus a net loss of USD 820,912 in the first quarter of the financial year 2019. The cash balance as on 31^st March 2020 stood at USD 6,465,665 as against a cash balance of USD 6,937,621 as on 31^st December 2019. The total assets as on 31^st March 2020 stood at USD 61,981,858 as against total assets of USD 62,566,733 as on 31^st December 2019.

Share Price Performance

 Daily Chart as of 29^th May 2020, before the market close (Source: Refinitiv, Thomson Reuters)

International Tower Hill Mines Ltd shares were trading at CAD 1.58 at the time of writing before the market close on 29^th May 2020. Stock's 52 weeks High is CAD 1.70 and Low is CAD 0.425.

Conclusion

The Company has shown an increase in the financial performance in the first quarter of the financial year 2020. The Group is in the development stage and hence rely on grants and cash balances to carry on all the business activities. The market conditions in which the company operates is full of challenges and might impact the operational performance and reduce financial performance as well. Any change in regulations and government policies could affect the overall business of the company. The operations are financed by the sale of equity securities by private placements. The Group needs to manage its operating expenses unless it results in further deterioration in financial performance in the coming years. The Group needs significant additional financing to carry out advancing activities at its Livengood Gold Project. Till date, the Company has been operating successfully through equity financing, but there is a greater uncertainty that it might not be able to secure any additional financing to fund operations. ITH’s financing options also include strategic alliance for further development, although there is no assurance that these alliances can be successful. The group’s operations are impacted by the outbreak of covid-19 and could increase credit and liquidity risk in the coming days. Presently, the company is trading near its 52-week high, raising doubts at its upside potential at current prices.

Based on the factors as highlighted above, we recommend investors to keep a “Watch” on the stock at the current market price of CAD 1.58 (as on 29^th May 2020, before the market close), with support from few catalysts needs to be evaluated at a later stage.