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We feel now is a pretty good time to analyse Amaroq Minerals Ltd.'s (CVE:AMRQ) business as it appears the company may be on the cusp of a considerable accomplishment. Amaroq Minerals Ltd. engages in the acquisition, exploration, and development of mineral properties in Greenland. The company’s loss has recently broadened since it announced a CA$834k loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$32m, moving it further away from breakeven. Many investors are wondering about the rate at which Amaroq Minerals 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.
Amaroq Minerals is bordering on breakeven, according to the 4 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of CA$21m in 2025. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 86% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Amaroq Minerals' growth isn’t the focus of this broad overview, however, bear in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
View our latest analysis for Amaroq Minerals
Before we wrap up, there’s one issue worth mentioning. Amaroq Minerals currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Amaroq Minerals' case is 52%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Amaroq Minerals, so if you are interested in understanding the company at a deeper level, take a look at Amaroq Minerals' company page on Simply Wall St. We've also put together a list of essential factors you should look at: