TSXV:KTO

Stock Analysis Report

Executive Summary

K2 Gold Corporation, an exploration stage company, acquires, explores for, and evaluates gold exploration projects in Canada and the United States.

Rewards

Earnings have grown 28.2% per year over the past 5 years

Risk Analysis

Does not have a meaningful market cap (CA$12M)

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

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet and overvalued.

Share Price & News

How has K2 Gold's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KTO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-13.5%

KTO

0.3%

CA Metals and Mining

1.2%

CA Market


1 Year Return

-10.0%

KTO

28.3%

CA Metals and Mining

9.6%

CA Market

Return vs Industry: KTO underperformed the Canadian Metals and Mining industry which returned 26.9% over the past year.

Return vs Market: KTO underperformed the Canadian Market which returned 10.4% over the past year.


Shareholder returns

KTOIndustryMarket
7 Day-13.5%0.3%1.2%
30 Day2.3%3.2%2.6%
90 Day-2.2%7.8%6.0%
1 Year-10.0%-10.0%29.2%28.3%13.1%9.6%
3 Year-37.5%-37.5%-0.4%-2.2%17.1%6.4%
5 Year12.5%12.5%28.4%24.2%36.1%16.0%

Price Volatility Vs. Market

How volatile is K2 Gold's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is K2 Gold 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 KTO's fair value to establish if it is undervalued.

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


Price To Earnings Ratio

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

PE vs Market: KTO 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 KTO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: KTO 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 K2 Gold 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 K2 Gold 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 K2 Gold performed over the past 5 years?

28.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KTO is currently unprofitable.

Growing Profit Margin: KTO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: KTO is unprofitable, but has reduced losses over the past 5 years at a rate of 28.2% per year.

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

Earnings vs Industry: KTO is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (-1.4%).


Return on Equity

High ROE: KTO has a negative Return on Equity (-9.72%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is K2 Gold's financial position?


Financial Position Analysis

Short Term Liabilities: KTO's short term assets (CA$3.5M) exceed its short term liabilities (CA$270.0K).

Long Term Liabilities: KTO has no long term liabilities.


Debt to Equity History and Analysis

Debt Level: KTO is debt free.

Reducing Debt: KTO had no debt 5 years ago.


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if KTO's debt is covered by short term assets.


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: KTO has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: KTO has sufficient cash runway for more than 3 years if free cash flow continues to reduce at historical rates of -1.4% each year


Next Steps

Dividend

What is K2 Gold's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.4%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate KTO'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 KTO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if KTO'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 KTO's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of K2 Gold's salary, the management and board of directors tenure and is there insider trading?

3.9yrs

Average board tenure


CEO

Steve Swatton (57yo)

3.8yrs

Tenure

CA$150,000

Compensation

Mr. Stephen P. Swatton, also known as Steve, BSc. (Hons.lli) Geology (Portsmouth UK) MSc Geology has been the Chief Executive Officer and President of K2 Gold Corporation since June 30, 2016 and has been i ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD114.81K) is below average for companies of similar size in the Canadian market ($USD165.67K).

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


Board Age and Tenure

3.9yrs

Average Tenure

57yo

Average Age

Experienced Board: KTO's board of directors are considered experienced (3.9 years average tenure).


Insider Trading

Insider Buying: KTO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$5,31413 Dec 19
Stephen Swatton
EntityIndividual
Role
Chief Executive Officer
President
Shares25,000
Max PriceCA$0.21
BuyCA$10,86008 Oct 19
Stephen Swatton
EntityIndividual
Role
Chief Executive Officer
President
Shares45,000
Max PriceCA$0.25
BuyCA$10,00003 Sep 19
Frederic Wilfred Leigh
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares40,000
Max PriceCA$0.25
BuyCA$175,00029 Aug 19
John Robins
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares700,000
Max PriceCA$0.25
BuyCA$10,00029 Aug 19
Joanne Price
EntityIndividual
Shares40,000
Max PriceCA$0.25
BuyCA$50,00028 Aug 19
Stephen Swatton
EntityIndividual
Role
Chief Executive Officer
President
Shares200,000
Max PriceCA$0.25
BuyCA$12,50028 Aug 19
Robert Scott
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares50,000
Max PriceCA$0.25
BuyCA$8,64721 Jan 19
Stephen Swatton
EntityIndividual
Role
Chief Executive Officer
President
Shares34,500
Max PriceCA$0.26

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 34.1%.


Management Team

  • Steve Swatton (57yo)

    President

    • Tenure: 3.8yrs
    • Compensation: CA$150.00k
  • Rob Scott

    Chief Financial Officer

    • Tenure: 2.7yrs
  • Al Doherty

    Exploration Geologist

    • Jeff Dare

      Corporate Secretary


      Board Members

      • John Robins (59yo)

        Independent Chairman of the Board

        • Tenure: 8.4yrs
      • Steve Swatton (57yo)

        President

        • Tenure: 3.8yrs
        • Compensation: CA$150.00k
      • Freddie Leigh (35yo)

        Independent Director

        • Tenure: 4.2yrs
      • Craig Roberts

        Independent Director

        • Tenure: 3.6yrs

      Company Information

      K2 Gold Corporation's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: K2 Gold Corporation
      • Ticker: KTO
      • Exchange: TSXV
      • Founded: 2011
      • Industry: Gold
      • Sector: Materials
      • Market Cap: CA$9.870m
      • Shares outstanding: 43.87m
      • Website: https://k2gold.com

      Location

      • K2 Gold Corporation
      • 800 West Pender Street
      • Suite 1020
      • Vancouver
      • British Columbia
      • V6C 2V6
      • Canada

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      KTOTSXV (TSX Venture Exchange)YesCommon SharesCACADJul 2012
      KTGD.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 2012
      23KDB (Deutsche Boerse AG)YesCommon SharesDEEURJul 2012

      Biography

      K2 Gold Corporation, an exploration stage company, acquires, explores for, and evaluates gold exploration projects in Canada and the United States. Its flagship project is the Wels project covering an area of approximately 7,200 hectares located in west-central Yukon Territory. The company was formerly known as West Melville Metals Inc. and changed its name to K2 Gold Corporation in November 2016. K2 Gold Corporation was incorporated in 2011 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 Analysis2020/01/17 02:11
      End of Day Share Price2020/01/16 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.