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Blackstone Minerals Limited's (ASX:BSX) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Blackstone Minerals Limited's (ASX:BSX) future prospects. Blackstone Minerals Limited engages in the exploration and development of mineral properties. With the latest financial year loss of AU$32m and a trailing-twelve-month loss of AU$37m, the AU$59m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Blackstone Minerals' 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.

See our latest analysis for Blackstone Minerals

According to the 2 industry analysts covering Blackstone Minerals, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of AU$204m in 2025. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 96% is expected, 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 Blackstone Minerals' upcoming projects, however, take into account 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. Blackstone Minerals 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. 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:

There are too many aspects of Blackstone Minerals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Blackstone Minerals' company page on Simply Wall St. We've also compiled a list of essential aspects you should further research:

  1. Historical Track Record: What has Blackstone Minerals' 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 Blackstone Minerals' 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.

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