Silver X Mining Corp.'s (AGX:TSX.V; AGXPF:OTC) Q3 2024 financial results came in slightly below Red Cloud Securities Analyst Timothy Lee's estimate. Lee says the stock is still a Buy but lowered his share price target slightly.
Silver X Mining Corp.'s (AGX:TSX.V; AGXPF:OTC) Q3 2024 financial results came in slightly below Red Cloud Securities Analyst Timothy Lee's estimate of US$0 per share with a net loss of US$2.15 million or US$0.01 per share, compared to a loss of US$2.1 million or US$0.01 per share in the same period a year ago and a loss of US$0.16 million or US$0 per share in the prior quarter.
Lee maintained the firm's Buy rating on the stock but decreased the target price from CA$0.80 per share to CA$0.70 to reflect a "slower estimated production ramp-up."
In a December 2 updated research note, Lee attributed the slight earnings miss to quarterly sales of 230,000 ounces silver equivalent (Ag Eq) that were about 28,000 ounces Ag Eq less than the 258,000 ounces Ag Eq production, which itself was lower than originally estimated as the head grade dropped to 220 grams per tonne (g/t) Ag Eq.
The analyst also noted that costs remained somewhat high, with cash costs averaging US$21.5 per ounce Ag Eq, with AISC of US$26.2 per ounce. The company also noted operating cash costs averaged US$100 per ton, down 32.3% from a year ago. This includes US$1 million in development work within the Tangana Mining Unit, which contributed about US$3.90 per ounce to AISC.
"In our opinion, these are neutral results," Lee wrote. "The company had previously announced production numbers, so there are not a lot of surprises. We had estimated somewhat higher revenues, but they were a bit lower due to the timing of metal sales, and this could spill over positively to the next quarter. The number show improvements YoY, although this is a bit of an apples-to-oranges comparison, as operations at Nueva Recuperada were shut down for part of Q2/23."
The results were a bit down from the prior quarter, but "this had already been reflected in the production numbers, due to a lower average head grade," Lee continued.
The YoY comparisons are apples-to-oranges because Nueva Recuperada shut down for part of Q2 2023, Lee noted.
Revenues totaled US$5 million, up 138% YoY but down 19.9% QoQ, the analyst said. Adjusted EBITDA was negative US$0.09 million, an improvement from negative US$0.97 million in the third quarter of 2023, but down from a positive EBITDA of US$0.79 million in Q2/24.
Siler X finished the quarter with US$0.19 million in cash, US$7.7 million in assets, and US$22 million in liabilities, the analyst noted.
"Our target is based on a sum-of-parts valuation, including a DCF mine model for Nueva Recuperada, a nominal purchase value for Coriorcco, as well as cash and debt," Lee wrote "While Nueva Recuperada has achieved a fairly steady rate of production since the reset in Q3/23, production growth has been slower than originally estimated, and we are modestly lowering our estimates for future growth at the mine."
| Want to be the first to know about interestingSilver investment ideas?Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
Silver X Mining Corp. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Silver X Mining Corp.Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.
Disclosures for Red Cloud Securities, Silver X Mining Corp., December 2, 2024:
Disclosure Requirement
Red Cloud Securities Inc. is registered as an Investment Dealer and is a member of the Canadian Investment Regulatory Organization (CIRO). Red Cloud Securities registration as an Investment Dealer is specific to the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, and Saskatchewan. We are registered and authorized to conduct business solely within these jurisdictions. We do not operate in or hold registration in any other regions, territories, or countries outside of these provinces. Red Cloud Securities bears no liability for any consequences arising from the use or misuse of our services, products, or information outside the registered jurisdictions.
Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
Red Cloud Securities Inc. has prepared this document for general information purposes only. This document should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided has been derived from sources believed to be accurate but cannot be guaranteed. This document does not take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud Securities Inc. will not treat recipients of this document as clients by virtue of having viewed this document. Red Cloud Securities Inc. takes no responsibility for any errors or omissions contained herein, and accepts no legal responsibility for any errors or omissions contained herein, and accepts no legal responsibility from any losses resulting from investment decisions based on the content of this report.
Company Specific Disclosure Details
1. The analyst has visited the head/principal office of the issuer or has viewed its material operations.
2. The issuer paid for or reimbursed the analyst for a portion, or all of the travel expense associated with a visit.
3. n the last 12 months preceding the date of issuance of the research report or recommendation, Red Cloud Securities Inc. has performed investment banking services for the issuer.
Analysts are compensated through a combined base salary and bonus payout system. The bonus payout is determined by revenues generated from various departments including Investment Banking, based on a system that includes the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and client feedback. Analysts are not directly compensated for specific Investment Banking transactions.
Dissemination
Red Cloud Securities Inc. distributes its research products simultaneously, via email, to its authorized client base. All research is then available on www.redcloudsecurities.com via login and password.
Analyst Certification
Any Red Cloud Securities Inc. research analyst named on this report hereby certifies that the recommendations and/or opinions expressed herein accurately reflect such research analyst's personal views about the companies and securities that are the subject of this report. In addition, no part of any research analyst's compensation is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.