Loss-Making Black Rock Mining Limited (ASX:BKT) Expected To Breakeven In The Medium-Term
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. On 30 June 2023, the AU$121m market-cap company posted a loss of AU$9.1m for its most recent financial year. As path to profitability is the topic on Black Rock Mining's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Black Rock Mining
Black Rock Mining is bordering on breakeven, according to the 2 Australian Metals and Mining analysts. They expect the company to post a final loss in 2025, before turning a profit of AU$14m in 2026. The company is therefore projected to breakeven around 3 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 47%, which is rather optimistic! 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 Black Rock Mining given that this is a high-level summary, but, bear in mind that typically 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 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 Black Rock Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – Black Rock Mining's company page on Simply Wall St. We've also compiled a list of pertinent factors you should look at:
Historical Track Record: What has Black Rock 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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Black Rock Mining's 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.
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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.
