Fundamentals:
Melcor’s Q2‑2025 MD&A (available on its website and SEDAR) shows that the company’s balance sheet remains relatively light‑leveraged. Total interest‑bearing debt at June 30 2025 was C$ 46.2 million, essentially flat versus C$ 46.0 million at the end of Q4 2024. Net‑debt (debt less cash and cash equivalents) therefore sits at C$ 31.5 million, giving a net‑debt‑to‑EBITDA ratio of 1.1×, unchanged from the prior quarter and comfortably below the 2.0× covenant threshold. The debt‑to‑equity ratio is roughly 0.25×, reflecting a modest capital structure and ample capacity for additional financing if required.
Recent changes & trading implications:
There have been no material shifts in either absolute debt levels or leverage ratios in the most recent reporting period—both remain consistent with the company’s historical range. This stability, combined with the declaration of a $0.13 per‑share quarterly dividend, signals management’s confidence in cash flow generation and suggests that the firm is not pressured to raise capital or deleverage aggressively. From a trading perspective, the unchanged leverage profile removes a key downside risk factor, supporting a neutral‑to‑bullish bias on MRD. Investors can consider buying on modest pull‑backs, especially if the stock trades below the 20‑day SMA, while keeping an eye on any future capital‑raising activity that could alter the leverage story.