The company formerly known as CUM (tcfka-CUM), Copper Mountain (CMMC.to), reported its 1q17 financials last night and in the NR this morning, was quick to trumpet its sales of $74.1m and net earnings of $7.1m (4c/share). Sound like strong financials, no? Stock will rally, no?
Nope, sorry, it’s complete bullshit because there’s no way O’Rourke and his collective band of mediocrity are going to point you to the reality of tcfka-CUM’s financial disaster area. To do that you need to care enough to download its Reg F and when you do, even if you ignore the house of pain that is the Statement of Cash Flows there’s no way you can ignore the dog’s dinner balance sheet
They made a net profit of over $7m, but cash dropped and working cap went deeply into negative territory and the reason is down there at the bottom. Yes indeed madame and sire, tcfka-CUM has real and nasty cash debt to pay back at the rate of around $13m a quarter (which happens to be around $13.7m/qtr for the next three quarters of 2017), so how making less than $8m/qtr in operating profit (at U$2.65/lb copper, you’re not going to see that average in Q2) is going to help the cause is beyond my ken.
It also beats me why this utter dog remains popular with the Canadian retail community, the only reason I can think of is that it’s propped up by rah-rah boys and bought by people who wouldn’t even know how to access SEDAR, let alone read and understand a company’s financials. This company has 133.1m shares out and at its current share price, a market cap of $126.4m. Its true equity value is zero, unless of course copper prices come to the rescue. If they do tcfka-CUM goes up (but then again so do a whole lot of copper miner shares). If they don’t, this company is destined to implode. Math says so.