Q: What are your thoughts on Faraday Copper (FDY)?
5i Research Answer:
FDY is a small-cap name ($165M market cap) that is pre-revenue and has a decent cash balance of $9.5M. In its latest earnings release, the company noted its latest acquisition of a ranch for $10M, announced it is continuing to advance through its Copper Creek project and will begin Phase III drilling in Q4. The performance of the stock since launching in late 2022 has been impressive, but it does not generate positive free cash flows and it issues shares to fund its operations. We think the name has potential, but we would consider it to be a higher-risk name at this time and would prefer to see further progression at its mines and sales materialize before jumping in here.