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With the business potentially at an important milestone, we thought we'd take a closer look at Bear Creek Mining Corporation's (CVE:BCM) future prospects. Bear Creek Mining Corporation engages in the acquisition, exploration, and development of precious and base metal properties in Peru. The CA$119m market-cap company’s loss lessened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$22m, as it approaches breakeven. The most pressing concern for investors is Bear Creek Mining's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Bear Creek Mining
Bear Creek Mining is bordering on breakeven, according to the 2 Canadian Metals and Mining analysts. They expect the company to post a final loss in 2021, before turning a profit of US$54m in 2022. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 27%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Bear Creek Mining's growth isn’t the focus of this broad overview, though, take into account that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. Bear Creek Mining currently has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
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There are key fundamentals of Bear Creek Mining which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Bear Creek Mining, take a look at Bear Creek Mining's company page on Simply Wall St. We've also put together a list of important factors you should look at: