CleanTech Vanadium Mining (CVE:CTV) Is Carrying A Fair Bit Of Debt

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. Importantly, CleanTech Vanadium Mining Corp. (CVE:CTV) does carry debt. But is this debt a concern to shareholders?

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When Is Debt Dangerous?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.

What Is CleanTech Vanadium Mining's Debt?

You can click the graphic below for the historical numbers, but it shows that as of June 2025 CleanTech Vanadium Mining had CA$3.91m of debt, an increase on none, over one year. However, because it has a cash reserve of CA$2.68m, its net debt is less, at about CA$1.23m.

How Strong Is CleanTech Vanadium Mining's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that CleanTech Vanadium Mining had liabilities of CA$4.41m due within 12 months and no liabilities due beyond that. On the other hand, it had cash of CA$2.68m and CA$31.2k worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by CA$1.70m.

Since publicly traded CleanTech Vanadium Mining shares are worth a total of CA$27.8m, it seems unlikely that this level of liabilities would be a major threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. When analysing debt levels, the balance sheet is the obvious place to start. But it is CleanTech Vanadium Mining's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View our latest analysis for CleanTech Vanadium Mining

Given its lack of meaningful operating revenue, investors are probably hoping that CleanTech Vanadium Mining finds some valuable resources, before it runs out of money.

Caveat Emptor

Over the last twelve months CleanTech Vanadium Mining produced an earnings before interest and tax (EBIT) loss. To be specific the EBIT loss came in at CA$2.6m. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled CA$5.7m in negative free cash flow over the last twelve months. So in short it's a really risky stock. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 6 warning signs for CleanTech Vanadium Mining (4 are concerning!) that you should be aware of before investing here.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.