ERD is $135M market cap, up 9% YTD. It has $28M cash but $34M in obligations. It has no revenue, losses and negative cash flow. In February, it received an $80M financing committment for its high grade gold project in Mongolia. This is a positive development and first gold pour is expected sometime next year. We always add time to a mine development timeline, however. ERD has three mining licenses, but of course there is geopolitical risk here. Mongolia does not have a great reputation for treating companies fairly. But, the project itself is quite robust and has high grades. Open pit mining is much cheaper than underground. Insiders own ~5%. Eric Sprott owns ~18%. There is a lot of risk here, but lots of potential as well. We have to mention that ERD was a $1.90 stock nearly 20 years ago (39c now) and has issued lots of shares for its development. But if the gold rally broadens out we would expect it to do well. We would consider it a HOLD for the average investor, due to its higher degree of overall risk.
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