We feel now is a pretty good time to analyse Spartan Resources Limited's (ASX:SPR) business as it appears the company may be on the cusp of a considerable accomplishment. Spartan Resources Limited engages in the exploration, evaluation, and development of gold projects. The AU$351m market-cap company announced a latest loss of AU$35m on 30 June 2023 for its most recent financial year result. The most pressing concern for investors is Spartan Resources' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Spartan Resources
Spartan Resources is bordering on breakeven, according to some Australian Metals and Mining analysts. They expect the company to post a final loss in 2024, before turning a profit of AU$12m in 2025. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 135% 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.
Given this is a high-level overview, we won’t go into details of Spartan Resources' upcoming projects, though, 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.
One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 2.6% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Spartan Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Spartan Resources' company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:
-
Historical Track Record: What has Spartan Resources' 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.
-
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Spartan Resources' board and the CEO’s background.
-
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.