Prime Mining Corp. engages in the acquisition, exploration, and development of mineral resource properties in Mexico. The company explores for gold and silver deposits. It primarily holds a 100% interest in the Los Reyes project that consists of 37 contiguous concessions covering an area of 6,273 hectares located in Sinaloa, Mexico. The company was formerly known as ePower Metals Inc. and changed its name to Prime Mining Corp. in August 2019. Prime Mining Corp. was incorporated in 1981 and is headquartered in Vancouver, Canada.

Canada

Prime Mining Corp.

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 14ppts over six months and grown 10ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -5.8 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

PRMNF has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is usually stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, inadequate interest coverage, and poor cash flow generation. We note an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, PRMNF is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, PRMNF is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. 

Prime Mining Corp.

$ 1.06

1

Prime Mining Corp.

$ 1.06

1

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 1.06

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