Magna Mining Inc. (CVE:NICU): Is Breakeven Near?

With the business potentially at an important milestone, we thought we'd take a closer look at Magna Mining Inc.'s (CVE:NICU) future prospects. Magna Mining Inc. engages in the acquisition, exploration, and development of mineral properties in Canada. With the latest financial year loss of CA$22m and a trailing-twelve-month loss of CA$24m, the CA$77m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Magna Mining's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Magna Mining

According to the 2 industry analysts covering Magna Mining, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of CA$30m in 2025. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 90%, which is rather optimistic! 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 Magna Mining's upcoming projects, however, keep 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.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 0.3% 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:

There are too many aspects of Magna Mining to cover in one brief article, but the key fundamentals for the company can all be found in one place – Magna Mining's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Magna 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 Magna 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 Magna 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. 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.