With the business potentially at an important milestone, we thought we'd take a closer look at McEwen Mining Inc.'s (NYSE:MUX) future prospects. McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver deposits in the United States, Canada, Mexico, and Argentina. The US$514m market-cap company’s loss lessened since it announced a US$152m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$52m, as it approaches breakeven. The most pressing concern for investors is McEwen Mining's 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 McEwen Mining

Consensus from 3 of the American Metals and Mining analysts is that McEwen Mining is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$45m in 2022. Therefore, the company is expected to breakeven just over a year 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 166% is expected, which is rather optimistic! 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 McEwen Mining's upcoming projects, though, keep 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. 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. The company has managed its capital judiciously, with debt making up 13% 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 McEwen Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – McEwen Mining's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

1. Historical Track Record: What has McEwen 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.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on McEwen Mining's board and the CEO’s background.

3. 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.

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.

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