Q: Culico Metals was formed as part of the acquisition of Karora earlier this year and is now trading on the TSX Venture exchange. Can you share your thoughts on the prospect of this spin-off company?
5i Research Answer:
CLCO is still very small, and there has not been news or much to go on yet. It made a $4M investment into Americas Gold & Silver recently. It has $10M cash and lost $600,000 in the Q3 on no revenue. Cash flow was slightly negative. We would consider management decent and they own 12%. But this is a very early stage company, and size alone makes it exceptionally risky. There is potential, but more capital and time will be needed to see if anything comes from its assets. We would consider it a five-year or more type of story. We don't see anything 'wrong' with it but it is hard to endorse to a general audience due to the size and sector risk alone.