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Black Rock Mining Limited's (ASX:BKT) Path To Profitability

We feel now is a pretty good time to analyse Black Rock Mining Limited's (ASX:BKT) business as it appears the company may be on the cusp of a considerable accomplishment. Black Rock Mining Limited engages in the exploration and development of graphite projects in Tanzania. The company’s loss has recently broadened since it announced a AU$2.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$3.3m, moving it further away from breakeven. Many investors are wondering about the rate at which Black Rock Mining 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.

See our latest analysis for Black Rock Mining

Black Rock Mining is bordering on breakeven, according to some Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of AU$4.7m in 2024. 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 76%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Black Rock Mining's upcoming projects, though, bear in mind that by and large 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. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

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Before we wrap up, there’s one aspect worth mentioning. Black Rock Mining 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. The company 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 key fundamentals of Black Rock Mining 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 Black Rock Mining, take a look at Black Rock Mining's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

  1. Historical Track Record: What has Black Rock Mining'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 Black Rock 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.