Jervois Mining Limited (ASX:JRV): When Will It Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Jervois Mining Limited's (ASX:JRV) future prospects. Jervois Mining Limited explores for and evaluates mineral properties in the United States, Australia, and Uganda. The AU$365m market-cap company’s loss lessened since it announced a AU$8.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$5.6m, as it approaches breakeven. The most pressing concern for investors is Jervois Mining's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Jervois Mining

Jervois Mining is bordering on breakeven, according to the 2 Australian Metals and Mining analysts. They expect the company to post a final loss in 2022, before turning a profit of AU$22m in 2023. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 53% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Jervois Mining given that this is a high-level summary, but, bear in mind that typically 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 The company has managed its capital judiciously, with debt making up 0.1% 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:

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

1. Valuation: What is Jervois Mining 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 Jervois Mining 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 Jervois 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. 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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