Trigon Metals Inc.'s (CVE:TM) Shift From Loss To Profit

We feel now is a pretty good time to analyse Trigon Metals Inc.'s (CVE:TM) business as it appears the company may be on the cusp of a considerable accomplishment. Trigon Metals Inc., together with its subsidiaries, engages in the acquisition, exploration, development, and maintenance of mines and mineral properties in the African continent. The company’s loss has recently broadened since it announced a US$16m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$23m, moving it further away from breakeven. As path to profitability is the topic on Trigon Metals' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Trigon Metals

Trigon Metals is bordering on breakeven, according to the 2 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$5.8m in 2025. The company is therefore projected to breakeven just over a year 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 77%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Trigon Metals' growth isn’t the focus of this broad overview, though, keep in mind that by and large metals and mining companies, depending on the stage of operation and metals mined, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we would like to bring into light with Trigon Metals is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.

Next Steps:

There are key fundamentals of Trigon Metals 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 Trigon Metals, take a look at Trigon Metals' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:

1. Valuation: What is Trigon Metals 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 Trigon Metals 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 Trigon Metals’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.