Blackstone Minerals Limited (ASX:BSX) Is Expected To Breakeven In The Near Future

Blackstone Minerals Limited (ASX:BSX) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Blackstone Minerals Limited explores for and develops mineral properties. The AU$116m market-cap company announced a latest loss of AU$7.9m on 30 June 2020 for its most recent financial year result. Many investors are wondering about the rate at which Blackstone Minerals will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Blackstone Minerals

According to some industry analysts covering Blackstone Minerals, breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of AU$12m in 2023. So, the company is predicted to breakeven approximately 3 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 50% is expected, which is extremely buoyant. 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 Blackstone Minerals' upcoming projects, but, take into account that generally 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 Blackstone Minerals has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Blackstone Minerals, so if you are interested in understanding the company at a deeper level, take a look at Blackstone Minerals' company page on Simply Wall St. We've also put together a list of relevant factors you should further research:

1. Valuation: What is Blackstone Minerals 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 Blackstone Minerals is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Blackstone Minerals’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. 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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