GRZ  Gold Reserve Inc

Exchange

AMEX

Sector

Basic Industries

Industry

Precious Metals

Market Cap.

171.9M

Vuru Grade

14.71/100

Current Price

$2.85
+0.02 (+0.71%)

Company Metrics

  • P/E 0
  • P/S 0
  • P/B 22.95
  • EPS -0.348
  • Cash ROIC -45.05%
  • Cash Ratio 4.48
  • Dividend 0 / 0%
  • Avg. Vol. 173,933.00
  • Shares 384.15M
  • Market Cap. 171.9M

Company Description

Gold Reserve Inc., an exploration stage company, engages in the acquisition, exploration, and development of mining projects. The company was founded in 1956 and is based in Spokane, Washington.... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Gold Reserve Shares Surge on $770 Million Venezuelan Settlement
Bloomberg - Aug 8, 2016
Gold Reserve Inc. will get about $770 million as part of a settlement with Venezuela for the 2008 seizure of its Brisas gold and copper project in an arrangement that depends on the country securing financing.
Gold Reserve reaches arbitration settlement with Venezuela, stock soars - Financial Post
Gold Reserve Announces Grant of Stock Options
Business Wire (press release) - Feb 17, 2017
SPOKANE, Wash.--(BUSINESS WIRE)--Gold Reserve Inc. (TSX.V: GRZ) (OTCQB: GDRZF) (“Gold Reserve” or the “Company”) announced the grant of 3,125,000 stock options to its officers and directors.
Should You Risk Buying Gold Reserve Inc. In Light Of Venezuela's $1 Billion ...
Seeking Alpha - Oct 10, 2016
In October 2009, Gold Reserve Inc. filed a demand for arbitration against Venezuela for compensation under the Additional Facility Rules of the International Centre for Settlement of Investment Disputes ('ICSID'), part of the World Bank, which was ...
Gold Reserve, Inc.: A High-Risk/High-Reward Opportunity
Seeking Alpha - Nov 21, 2016
Venezuela breached its August 8 settlement agreement with Gold Reserve, Inc., failing to pay the first instalment of the $1,009,000,000 due October 31.
The Paris Court of Appeal Decides in Favor of Gold Reserve Inc.
Business Wire (press release) - Feb 7, 2017
SPOKANE, Wash.--(BUSINESS WIRE)--Gold Reserve Inc. (TSX.V:GRZ) (OTCQB:GDRZF) (“Gold Reserve” or the “Company”) announces that on February 7, 2017, the Paris Court of Appeal (the “Court”) rejected all of Venezuela's arguments and issued a ...
Paris Appeals Court Upholds $740M Award Against Venezuela - Law360 (subscription)
Gold Reserve deal with Venezuela a potential turning point for Canadian miners ...
Financial Post - Mar 1, 2016
VisMedia via Bloomberg News, fileGold Reserve Inc. shocked many onlookers by reaching a potentially favourable settlement with the Venezuelan government, which it has been battling in court for more than six years.
Gold Reserve, Venezuela Mull $740M Mining Row Settlement - Law360 (subscription)
Crystallex Updates Stakeholders - Marketwired (press release)
Venezuela Says Gold Reserve Accord Paves Way to Investment
Bloomberg - Feb 25, 2016
Venezuela's government said it resolved a dispute with Gold Reserve Inc., paving the way for $2 billion of investment by the Spokane, Washington-based company in a mining joint venture.
Venezuela, Gold Reserve to settle arbitration dispute with joint venture - Reuters
Venezuela is shipping gold to pay debt - CNNMoney
Shares in Focus: Gold Reserve Inc. (OTCPK:GDRZ.F)
BVN - 11 hours ago
Looking at some stock volatility information, Gold Reserve Inc. (OTCPK:GDRZ.F)'s 12 month volatility is 87.186600. The 6 month volatility is noted at 66.959600, and the 3 month is spotted at 74.756200.
Gold Reserve, Venezuela rework seizure settlement
MINING.com - Nov 14, 2016
According to a statement Gold Reserve and representatives of Venezuela convened a first meeting of the Board of Directors of the mixed company, of which Gold Reserve owns 45% and Venezuela owns 55%, at the end October. The purpose of the meeting ...
Gold Reserve Inc. Announces Proposed Private Placement
Business Wire (press release) - Mar 9, 2016
Gold Reserve Inc. (TSX.V:GRZ) (OTCQB:GDRZF) (the “Company”) announces that it plans, subject to the approval of the TSX Venture Exchange (the “TSXV”), a non-brokered private placement with certain arm's length investors for gross proceeds of up to US ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for GRZ to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate GRZ's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$2.85 Current Price

$-0.35 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$-0.12 Book Price

Overvalued by 104.16%


Very Poor Cash Return on Invested Capital over the past 5 years

GRZ has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

GRZ has lost $45.05 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow -17.95M -57.78M -40.88M -26.32M -21.42M
divided by
Invested Capital 17.26M 508.01M 602.51M 595.84M 21.70M
Cash ROIC -103.97% -11.37% -6.78% -4.42% -98.71%

Very Poor Return on Equity over the past 5 years

GRZ has shown an inability to deliver results for shareholders. This could be due to poor management, GRZ operating in a highly competitive industry, or having a weak business in general.

GRZ has generated a $2,809.08 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income -23.61M -11.44M -2.49M -6.83M -647.75M
divided by
Stockholders' Equity -25.80M 584.35M 641.51M 593.96M 4.61M
Return on Equity - -1.96% -0.39% -1.15% -14,041.92%

Poor Business Performance over the past 10 years

GRZ's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

GRZ has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow -26.26M -50.36M -52.56M -32.90M -29.93M -17.95M -57.78M -40.88M -26.32M -21.42M

Weak Balance Sheet

GRZ's financial position is not ideal. The key is to check whether GRZ is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 28.68M 99.67M 94.02M 72.30M 68.42M 58.76M 78.97M 42.12M 44.16M 18.57M
Current Assets 29.20M 100.32M 94.02M 72.30M 69.93M 59.21M 81.66M 45.36M 45.30M 39.20M
Total Assets 104.62M 281.90M 287.61M 119.92M 98.43M 78.34M 602.69M 658.31M 648.07M 44.42M
Current Liabilities 1.91M 7.96M 8.37M 4.02M 1.87M 2.31M 15.71M 13.68M 8.08M 4.15M
Total Liabilities 3.64M 80.58M 102.51M 100.00M 98.84M 104.14M 18.33M 16.80M 54.12M 39.80M
Stockholder' Equity 100.97M 201.32M 185.11M 19.92M -412,755.00 -25.80M 584.35M 641.51M 593.96M 4.61M
Current Ratio 15.25 12.61 11.23 17.97 37.44 25.63 5.20 3.32 5.61 9.46
TL-to-TA 0.03 0.29 0.36 0.83 1.00 1.33 0.03 0.03 0.08 0.90

Low or No Reinvestment of Profits over the past 10 years

GRZ has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to GRZ operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings -68.96M -81.37M -100.18M -265.63M -289.18M -292.18M -262.50M -264.99M -291.74M -919.57M
Retained Earnings Growth - -18.00% -23.12% -165.15% -8.86% -1.04% 10.16% -0.95% -10.09% -215.20%

Erratic Net Profit Margins over the past 10 years

GRZ has had highly erratic net profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income -6.98M -12.41M -19.73M -165.45M -23.55M -23.61M -11.44M -2.49M -6.83M -647.75M
divided by
Revenue 8.25M 6.50M 2.44M 3.17M 958,368.00 2.36M - - - -
Net Profit Margin -84.55% -190.97% -806.87% -5,226.27% -2,456.98% -1,001.16% - - - -

Varying Pricing Power over the past 10 years

GRZ has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$60.00 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 8.25M 6.50M 2.44M 3.17M 958,368.00 2.36M - - - -
divided by
Revenue 8.25M 6.50M 2.44M 3.17M 958,368.00 2.36M - - - -
Gross Margin 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% - - - -

Low Capital Intensity over the past 10 years

GRZ has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that GRZ may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 15.08M 44.69M 38.70M 17.77M 9.50M 50,478.00 51.10M 40.29M 18.66M 9.64M
divided by
Net Income -6.98M -12.41M -19.73M -165.45M -23.55M -23.61M -11.44M -2.49M -6.83M -647.75M
Capital Expenditure Ratio -216.12% -360.06% -196.18% -10.74% -40.33% -0.21% -446.60% -1,618.15% -273.38% -1.49%

No Dividend History over the past 10 years

GRZ has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 38.12M 49.70M 55.99M 57.31M 57.75M 59.47M 407.96M 383.81M 384.15M 384.15M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 4.72 5.09 0.81 1.07 1.82 2.80 2.93 2.91 2.91 0.08
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

GRZ has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 38.12M 49.70M 55.99M 57.31M 57.75M 59.47M 407.96M 383.81M 384.15M 384.15M
Stock Bought Back - -23.30% -11.22% -2.30% -0.77% -2.89% -85.42% 6.29% -0.09% -0.00%
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