TSXV:EAM

Stock Analysis Report

East Africa Metals

Executive Summary

East Africa Metals Inc., a mineral exploration company, focuses on the identification, acquisition, exploration, development, and sale of base and precious mineral resource properties in the Federal Democratic Republic of Ethiopia and the United Republic of Tanzania.

Rewards

Earnings have grown 11.6% per year over the past 5 years

Risk Analysis

Has less than 1 year of cash runway

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year

Does not have a meaningful market cap (CA$24M)



Snowflake Analysis

Imperfect balance sheet and overvalued.

Share Price & News

How has East Africa Metals's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EAM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-10.0%

EAM

2.4%

CA Metals and Mining

0.6%

CA Market


1 Year Return

-32.5%

EAM

4.4%

CA Metals and Mining

5.8%

CA Market

Return vs Industry: EAM underperformed the Canadian Metals and Mining industry which returned 4.3% over the past year.

Return vs Market: EAM underperformed the Canadian Market which returned 5.8% over the past year.


Shareholder returns

EAMIndustryMarket
7 Day-10.0%2.4%0.6%
30 Dayn/a1.2%0.5%
90 Day0%6.6%3.6%
1 Year-32.5%-32.5%5.0%4.4%9.1%5.8%
3 Year-51.8%-51.8%-10.4%-11.9%15.4%5.0%
5 Year80.0%80.0%22.9%19.2%33.6%14.0%

Price Volatility Vs. Market

How volatile is East Africa Metals's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is East Africa Metals undervalued compared to its fair value and its price relative to the market?

1.42x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate EAM's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate EAM's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: EAM is unprofitable, so we can't compare its PE Ratio to the Metals and Mining industry average.

PE vs Market: EAM is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EAM's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: EAM is good value based on its PB Ratio (1.4x) compared to the CA Metals and Mining industry average (1.5x).


Next Steps

Future Growth

How is East Africa Metals forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

15.6%

Forecasted Materials industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as East Africa Metals has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has East Africa Metals performed over the past 5 years?

11.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EAM is currently unprofitable.

Growing Profit Margin: EAM is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: EAM is unprofitable, but has reduced losses over the past 5 years at a rate of 11.6% per year.

Accelerating Growth: Unable to compare EAM's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: EAM is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (11.9%).


Return on Equity

High ROE: EAM has a negative Return on Equity (-16.32%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is East Africa Metals's financial position?


Financial Position Analysis

Short Term Liabilities: EAM's short term assets (CA$2.1M) do not cover its short term liabilities (CA$2.5M).

Long Term Liabilities: EAM's short term assets (CA$2.1M) exceed its long term liabilities (CA$796.5K).


Debt to Equity History and Analysis

Debt Level: EAM's debt to equity ratio (1.7%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if EAM's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: EAM has a high level of physical assets or inventory.

Debt Coverage by Assets: EAM's debt is covered by short term assets (assets are 5.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: EAM has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: EAM has less than a year of cash runway if free cash flow continues to reduce at historical rates of -10.6% each year


Next Steps

Dividend

What is East Africa Metals's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.3%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate EAM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate EAM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if EAM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if EAM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EAM's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.9yrs

Average board tenure


CEO

Andy Smith (62yo)

8.1yrs

Tenure

CA$258,500

Compensation

Mr. Andrew Lee Smith, also known as Andy, B.Sc., P.Geo. has been an Interim Chief Executive Officer of True North Gems Inc. since February 20, 2017. Mr. Smith has been Director of Nickel North Exploration  ...


CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD195.06K) is about average for companies of similar size in the Canadian market ($USD155.16K).

Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Andrew Smith
President8.1yrsCA$258.50k1.38% CA$337.5k
Denis Dillip
Chief Geologist0yrsCA$94.80kno data
David Parsons
Independent Director5.7yrsCA$16.00k0.21% CA$52.3k
Antony Harwood
Independent Director6.9yrsCA$8.75kno data
Sean Waller
Director & Mining Advisory Committee Member3.9yrsCA$89.70k0.064% CA$15.6k
Jingbin Wang
Chairman of the Board6.9yrsCA$17.00k0.60% CA$146.4k
Chris Zerga
Mining Advisory Committee Member0yrsno datano data
Zhijun He
Independent Director & Mining Advisory Committee Member0yrsCA$7.50k0.048% CA$11.8k
Jay Melnyk
Mining Advisory Committee Member0yrsno datano data

6.9yrs

Average Tenure

62yo

Average Age

Experienced Board: EAM's board of directors are considered experienced (6.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.9%.


Top Shareholders

Company Information

East Africa Metals Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: East Africa Metals Inc.
  • Ticker: EAM
  • Exchange: TSXV
  • Founded: 2012
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: CA$24.373m
  • Shares outstanding: 180.54m
  • Website: https://www.eastafricametals.com

Number of Employees


Location

  • East Africa Metals Inc.
  • 595 Howe Street
  • Suite 1100
  • Vancouver
  • British Columbia
  • V6C 2T5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EAMTSXV (TSX Venture Exchange)YesCommon SharesCACADJul 2013
EFRM.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 2013
EA1DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2013

Biography

East Africa Metals Inc., a mineral exploration company, focuses on the identification, acquisition, exploration, development, and sale of base and precious mineral resource properties in the Federal Democratic Republic of Ethiopia and the United Republic of Tanzania. The company primarily explores for gold, copper, silver, and zinc deposits. Its principal assets and interests include a 70% interest in the Harvest project comprising 3 contiguous exploration concessions that covers an area of approximately 86 square kilometers located in the Tigray region, as well as a 100% interest in the Adyabo project covering 195.5 square kilometers situated in the Arabian Nubian Shield in northern Ethiopia; and an interest in the Handeni property comprising 2 mining licenses covering 9.9 square kilometers, and contiguous mineral tenures totaling approximately 83.5 square kilometers located in northeastern Tanzania. The company was incorporated in 2012 and is headquartered in Vancouver, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 01:10
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.