Radius Gold Inc.

What they do

Radius Gold Inc. is an exploration-stage mining company that seeks to discover and define gold and silver resources. The company holds interests in exploration properties primarily in Latin America, including the Bald Peak and Holly projects in Nevada, and the newly acquired Volcan project in Guatemala. As of the 2014 fiscal year, the company had no operating mines or revenue-generating activities.

Revenue drivers

• No current revenue segments — The company is in the exploration stage and does not generate revenue from mining operations. Its activities are funded through equity issuances and option agreements.

Recent performance

For the fiscal year ended December 31, 2014, Radius Gold reported a net loss of $2.1 million, compared to a net loss of $3.5 million in 2013. The company had no revenue in either year. As of December 31, 2014, Radius had cash and cash equivalents of $2.0 million and total assets of $4.5 million. Exploration expenditures for 2014 were $1.8 million, focused on the Bald Peak and Holly projects.

Strategy

Radius Gold's strategy is to identify and acquire early-stage precious metal exploration projects with potential for large discoveries. The company aims to advance these projects through exploration and then seek joint venture partners or buyers to fund further development. In 2014, Radius optioned the Bald Peak project to a subsidiary of Kinross Gold and acquired the Volcan project in Guatemala. Management plans to continue exploring its existing properties and evaluate new opportunities.

Risks

• Exploration risk — The company's properties may not contain economically recoverable mineral deposits, and exploration efforts may not result in the discovery of commercially viable reserves.
• Funding risk — Radius Gold has no revenue and requires significant additional capital to fund exploration and maintain its properties, which may not be available on favorable terms.
• Political and regulatory risk — The company operates in foreign jurisdictions, including Guatemala, where changes in mining laws, permitting processes, or political instability could adversely affect its operations.
• Commodity price risk — The economic viability of any potential mineral deposit is highly dependent on gold and silver prices, which are volatile and beyond the company's control.

Outlook

Management intends to continue exploration on its key properties, including the Volcan project in Guatemala, and to seek joint venture partners to share costs and risks. The company expects to incur further losses as it focuses on exploration and does not anticipate generating revenue in the near term. Its ability to continue as a going concern depends on raising additional financing.