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We feel now is a pretty good time to analyse Black Rock Mining Limited's (ASX:BKT) business as it appears the company may be on the cusp of a considerable accomplishment. Black Rock Mining Limited engages in the exploration and development of graphite projects in Tanzania. The company’s loss has recently broadened since it announced a AU$2.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$3.3m, moving it further away from breakeven. Many investors are wondering about the rate at which Black Rock Mining will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
See our latest analysis for Black Rock Mining
Black Rock Mining is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$4.7m in 2024. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 76%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Black Rock Mining's upcoming projects, though, bear in mind that by and large 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.
Before we wrap up, there’s one aspect worth mentioning. Black Rock Mining currently has no debt on its balance sheet, which is rare for a loss-making 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 Black Rock 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 Black Rock Mining, take a look at Black Rock Mining's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine: