Continental Gold Inc’s (TSE:CNL) Profit Outlook

Continental Gold Inc’s (TSE:CNL): Continental Gold Inc., together with its subsidiaries, engages in the acquisition, exploration, evaluation, and development of gold resource properties in Colombia. With the latest financial year loss of -CA$7.84m and a trailing-twelve month of -CA$7.88m, the CA$677.90m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is CNL’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for CNL.

View out our latest analysis for Continental Gold

CNL is bordering on breakeven, according to Metals and Mining analysts. They expect the company to post a final loss in -1, before turning a profit of CA$0 in . So, CNL is predicted to breakeven approximately a couple of months from now! In order to meet this breakeven date, I calculated the rate at which CNL must grow year-on-year. It turns out an average annual growth rate of -12.25% is expected,

TSX:CNL Past Future Earnings June 22nd 18
TSX:CNL Past Future Earnings June 22nd 18

Underlying developments driving CNL’s growth isn’t the focus of this broad overview, but, take into account that generally 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, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that CNL has managed its capital judiciously, with debt making up 19.58% of equity. This means that CNL 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 CNL, so if you are interested in understanding the company at a deeper level, take a look at CNL’s company page on Simply Wall St. I’ve also compiled a list of essential aspects you should further research:

  1. Historical Track Record: What has CNL’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 Continental Gold’s board and the CEO’s back ground.
  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.