With the business potentially at an important milestone, we thought we'd take a closer look at Mincor Resources NL's (ASX:MCR) future prospects. Mincor Resources NL engages in the exploration, development, and mining of mineral resources in Australia. The company’s loss has recently broadened since it announced a AU$13.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$16.3m, moving it further away from breakeven. As path to profitability is the topic on Mincor Resources' 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.
Consensus from 3 of the Australian Metals and Mining analysts is that Mincor Resources is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$40m in 2022. So, the company is predicted to breakeven approximately 2 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 64%, which signals high confidence from analysts. 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 Mincor Resources given that this is a high-level summary, though, keep 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Mincor Resources 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.
There are too many aspects of Mincor Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Mincor Resources' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
Valuation: What is Mincor Resources worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Mincor Resources is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Mincor Resources’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.
This article by Simply Wall St is general in nature. 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.