Western Exploration Inc. engages in the exploration and development of gold and silver deposits in North America. Its principal asset is the Aura gold silver project located in Elko County, Nevada. The company is headquartered in Reno, Nevada. Western Exploration Inc. operates as a subsidiary of Golkonda Llc.

Western Exploration Inc.

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. 

WEX.V reported revenue of USD 0mn in the last 12 months, down 0% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS fell 5% from FY23 to USD -0.13. Market expects EPS to reach USD 0.00 in FY24.

Over the last six months, the stock performance has varied, with an increase following a drop. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 55ppts. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

Another important profitability metric, return on assets (RoA), amounted to -58.2% in the last 12 months, a decrease from -54.0% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to -59.0%, below the peers. 

Western Exploration Inc. reported a return on equity (RoE) of -65.7% in the last 12 months, down from -60.4% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -4.8 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.

WEX.V 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 relatively 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 tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is very high. Among the negative credit factors and we point to negligible return on capital, inadequate interest coverage.

In highly turbulent market conditions, WEX.V 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, WEX.V 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. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. 

Western Exploration Inc.

CA$ 0.74

1

Western Exploration Inc.

CA$ 0.74

1

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 0.74

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