TSX Penny Stocks in 2025: Finding Resilience in BioRem and Empress Royalty Amid Trade Volatility

In a global economy buffeted by trade disputes, fluctuating tariffs, and supply chain uncertainties, investors are increasingly drawn to penny stocks that demonstrate financial resilience. Among the Toronto Stock Exchange's (TSX) smaller-cap listings, BioRem Inc. (TSXV: BRM) and Empress Royalty Corp. (TSXV: EMPR) stand out as two companies with robust liquidity, improving earnings quality, and growth trajectories that could weather macroeconomic storms. While risks such as margin pressure and interest coverage challenges persist, their fundamentals suggest they are well-positioned to capitalize on sector-specific opportunities. Here's why these TSX penny stocks warrant attention—and caution.

BioRem Inc.: A Pollution-Solving Giant with Hidden Momentum

BioRem, a leader in environmental remediation and odor control solutions, has built a record order backlog of $68 million as of March 2025, a 40% year-over-year increase. This backlog includes a $5.8 million project in the Middle East, signaling expanding international reach. Yet its Q1 2025 revenue dipped to $4.7 million—a 20% drop from Q1 2024—due to seasonal construction delays and logistical bottlenecks, particularly in securing 1,000 sea containers for global shipments.

Despite this hiccup, BioRem's cash position has strengthened to $9.6 million, up from $5.2 million in late 2024, and it has invested $91,000 in manufacturing equipment to boost production of its proprietary biofiltration media. This strategic move aims to address rising demand for its rental odor control units, which are critical for industrial clients.

Why It's a Buy, Despite Risks

BioRem's backlog suggests future revenue growth once logistics stabilize. However, investors must monitor margin pressure: its gross profit margin fell to 23% in Q1 2025 from 30% in 2024, reflecting lower volumes and rising material costs. The company's interest coverage ratio (calculated as EBIT divided by interest expense) remains healthy, but if borrowing costs rise, this could strain profitability.

Empress Royalty Corp.: Leveraging the Streaming Model for Growth

Empress Royalty, a royalty and streaming company focused on precious metals, has emerged as a standout performer in the TSXV. Its Q1 2025 revenue surged to $2.74 million, nearly tripling from Q1 2024, driven by its stakes in mines like the Tahuehueto silver stream in Mexico and the Galaxy gold mine in South Africa. The company's net asset value (NAV) of $73 million dwarfs its market cap of $47 million, suggesting significant upside if the stock price aligns with intrinsic value.

Empress's operating cash flow turned positive at $1.75 million in Q1 2025, up from a net loss in the same quarter of 2024. It also benefits from strategic partnerships, including a $28.5 million credit facility with Nebari Gold Fund, which provides non-dilutive capital for new investments.

Growth Catalysts, but Watch the Liquidity

Empress's current ratio of 1.08 indicates manageable short-term liabilities, but its quick ratio of 0.63 highlights reliance on inventory to meet obligations. Meanwhile, its shares have surged +94% year-to-date, outpacing the S&P/TSX Composite's 7.7% return.

Risks to Consider

Empress's success hinges on the operational performance of its partner mines. Delays or cost overruns at Tahuehueto or Galaxy could dent revenue. Additionally, its sensitivity to gold and silver prices remains a wildcard—though its NAV is calculated with conservative metal price assumptions, further declines could pressure margins.

Investment Thesis: Selective Opportunities in a Volatile Market

Both BioRem and Empress Royalty offer compelling entry points for investors willing to look beyond headline volatility:

1. BioRem: Its backlog and cash reserves suggest a turnaround is imminent, but avoid overpaying—wait for dips below $0.35/share.
2. Empress Royalty: The NAV discount and strong streaming pipeline make it a buy at current levels, though investors should set stop-losses near $0.50/share to mitigate price swings.

Key Caution Flags

• BioRem: Execution risk from logistics constraints and rising input costs.
• Empress: Dependency on third-party mining operators and precious metal price fluctuations.

Conclusion: A Bear Market's Silver Lining

In an era of trade wars and supply chain disruptions, penny stocks like BioRem and Empress Royalty demonstrate that small-cap resilience can thrive where fundamentals are strong. While macroeconomic headwinds persist, these companies' robust liquidity, NAV discounts, and growth catalysts make them compelling picks for investors with a long-term horizon. As always, diversify, set risk limits, and monitor closely—resilience is no guarantee of returns.

Final Note: Always consult a financial advisor before making investment decisions.