Newcore Gold Ltd.'s (CVE:NCAU) Shift From Loss To Profit

Newcore Gold Ltd. (CVE:NCAU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Newcore Gold Ltd. engages in the acquisition, advancement, and development of mineral resource properties in Ghana. The CA$184m market-cap company’s loss lessened since it announced a CA$5.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$1.5m, as it approaches breakeven. Many investors are wondering about the rate at which Newcore Gold will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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Consensus from 2 of the Canadian Metals and Mining analysts is that Newcore Gold is on the verge of breakeven. They expect the company to post a final loss in 2026, before turning a profit of CA$57m in 2027. Therefore, the company is expected to breakeven roughly 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 98% 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 Newcore Gold's upcoming projects, 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 that a high growth rate is not unusual, especially if the company is currently in an investment period.

Check out our latest analysis for Newcore Gold

Before we wrap up, there’s one aspect worth mentioning. Newcore Gold currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Newcore Gold'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 Newcore Gold'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.