When Can We Expect A Profit From Santana Minerals Limited (ASX:SMI)?

Santana Minerals Limited (ASX:SMI) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Santana Minerals Limited engages in the exploration and evaluation of gold and silver properties in New Zealand, Cambodia, and Mexico. The company’s loss has recently broadened since it announced a AU$2.6m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$3.3m, moving it further away from breakeven. The most pressing concern for investors is Santana Minerals' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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According to the 4 industry analysts covering Santana Minerals, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$5.6m in 2027. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 49% year-on-year, on average, 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 Santana Minerals' upcoming projects, but, take into account that by and large 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. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

See our latest analysis for Santana Minerals

Before we wrap up, there’s one aspect worth mentioning. Santana Minerals currently has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of 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 Santana Minerals 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 Santana Minerals, take a look at Santana Minerals' company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Santana 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 Santana 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 Santana 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. 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.