When Will Goldquest Mining Corp (CVE:GQC) Turn A Profit?

Goldquest Mining Corp’s (TSXV:GQC): Goldquest Mining Corp., together with its subsidiaries, engages in the identification, acquisition, and exploration of mineral properties in the Dominican Republic. The company’s loss has recently broadened since it announced a -CA$8.90M loss in the full financial year, compared to the latest trailing-twelve-month loss of -CA$11.22M, moving it further away from breakeven. As path to profitability is the topic on GQC’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for GQC’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Goldquest Mining

According to the industry analysts covering GQC, breakeven is near. They expect the company to post a final loss in 2018, before turning a profit of CA$4.00M in 2019. Therefore, GQC is expected to breakeven roughly a couple of months from now! What rate will GQC have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 74.00%, which is extremely buoyant. If this rate turns out to be too aggressive, GQC may become profitable much later than analysts predict.

TSXV:GQC Past Future Earnings Mar 15th 18
TSXV:GQC Past Future Earnings Mar 15th 18

I’m not going to go through company-specific developments for GQC given that this is a high-level summary, however, take into account that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. GQC 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. GQC 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 too many aspects of GQC to cover in one brief article, but the key fundamentals for the company can all be found in one place – GQC’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:

  1. Historical Track Record: What has GQC’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 Goldquest Mining’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.