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Magna Mining Inc. (CVE:NICU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Magna Mining Inc. engages in the acquisition, exploration, and development of mineral properties in Canada. The company’s loss has recently broadened since it announced a CA$9.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$14m, moving it further away from breakeven. The most pressing concern for investors is Magna Mining's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Magna Mining
Expectations from some of the Canadian Metals and Mining analysts is that Magna Mining is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of CA$3.3m in 2025. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 114% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Magna Mining's growth isn’t the focus of this broad overview, but, keep 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. 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. Magna Mining currently has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high 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.
Next Steps:
There are too many aspects of Magna Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – Magna Mining's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
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Historical Track Record: What has Magna Mining's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Magna Mining's board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.