Health Check: How Prudently Does Juno Minerals (ASX:JNO) Use Debt?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. Importantly, Juno Minerals Limited (ASX:JNO) does carry debt. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first step when considering a company's debt levels is to consider its cash and debt together.

What Is Juno Minerals's Debt?

The image below, which you can click on for greater detail, shows that at June 2025 Juno Minerals had debt of AU$3.00m, up from none in one year. However, it does have AU$4.31m in cash offsetting this, leading to net cash of AU$1.31m.

How Healthy Is Juno Minerals' Balance Sheet?

According to the last reported balance sheet, Juno Minerals had liabilities of AU$3.78m due within 12 months, and liabilities of AU$455.2k due beyond 12 months. Offsetting these obligations, it had cash of AU$4.31m as well as receivables valued at AU$4.9k due within 12 months. So these liquid assets roughly match the total liabilities.

This state of affairs indicates that Juno Minerals' balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So it's very unlikely that the AU$5.23m company is short on cash, but still worth keeping an eye on the balance sheet. Succinctly put, Juno Minerals boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is Juno Minerals's earnings that will influence how the balance sheet holds up in the future. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

See our latest analysis for Juno Minerals

Given its lack of meaningful operating revenue, investors are probably hoping that Juno Minerals finds some valuable resources, before it runs out of money.

So How Risky Is Juno Minerals?

We have no doubt that loss making companies are, in general, riskier than profitable ones. And in the last year Juno Minerals had an earnings before interest and tax (EBIT) loss, truth be told. Indeed, in that time it burnt through AU$1.6m of cash and made a loss of AU$1.2m. But the saving grace is the AU$1.31m on the balance sheet. That kitty means the company can keep spending for growth for at least two years, at current rates. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should learn about the 4 warning signs we've spotted with Juno Minerals (including 3 which shouldn't be ignored) .

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.

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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.