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Spartan Resources Limited (ASX:SPR) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Spartan Resources Limited engages in the exploration, evaluation, and development of gold projects. The AU$795m market-cap company posted a loss in its most recent financial year of AU$35m and a latest trailing-twelve-month loss of AU$25m shrinking the gap between loss and breakeven. As path to profitability is the topic on Spartan Resources' 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.
Check out our latest analysis for Spartan Resources
According to some industry analysts covering Spartan Resources, breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$108m in 2026. The company is therefore projected to breakeven around 2 years from today. 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 121%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Spartan Resources given that this is a high-level summary, 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. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Spartan Resources has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high 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 Spartan Resources 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 Spartan Resources, take a look at Spartan Resources' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:
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Valuation: What is Spartan Resources 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 Spartan Resources is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Spartan Resources’s board and the CEO’s background.
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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.