Breakeven On The Horizon For Black Rock Mining Limited (ASX:BKT)

With the business potentially at an important milestone, we thought we'd take a closer look at Black Rock Mining Limited's (ASX:BKT) future prospects. Black Rock Mining Limited engages in the exploration and development of graphite projects in Tanzania. The AU$133m market-cap company announced a latest loss of AU$6.1m on 30 June 2022 for its most recent financial year result. The most pressing concern for investors is Black Rock Mining's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Black Rock Mining

Expectations from some of the Australian Metals and Mining analysts is that Black Rock Mining is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$4.5m in 2024. Therefore, the company is expected to breakeven roughly 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 109% 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 Black Rock Mining's upcoming projects, 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. 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. 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 key fundamentals of Black Rock Mining which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Black Rock Mining, take a look at Black Rock Mining's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

1. 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.
2. 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.
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.

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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.