In This Article:
Santana Minerals Limited (ASX:SMI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Santana Minerals Limited engages in the exploration and evaluation of gold and silver properties in New Zealand, Cambodia, and Mexico. On 30 June 2024, the AU$365m market-cap company posted a loss of AU$2.6m for its most recent financial year. As path to profitability is the topic on Santana Minerals' investors mind, we've decided to gauge market sentiment. 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 Santana Minerals
According to the 3 industry analysts covering Santana Minerals, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of AU$129m in 2027. So, the company is predicted to breakeven approximately 2 years from today. 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 84%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Santana Minerals given that this is a high-level summary, but, keep in mind that generally 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that Santana Minerals 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. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Santana Minerals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Santana Minerals' company page on Simply Wall St. We've also put together a list of essential aspects you should further research:
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Historical Track Record: What has Santana Minerals' 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 Santana Minerals' 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.