With the business potentially at an important milestone, we thought we'd take a closer look at Kodal Minerals PLC's (LON:KOD) future prospects. Kodal Minerals PLC, together with its subsidiaries, engages in the exploration and evaluation of mineral resources in the United Kingdom and West Africa. With the latest financial year loss of UK￡1.5m and a trailing-twelve-month loss of UK￡1.5m, the UK￡93m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Kodal Minerals' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Kodal Minerals

Kodal Minerals is bordering on breakeven, according to some British Metals and Mining analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of UK￡8.0m in 2026. The company is therefore projected to breakeven around 2 years from now. 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 65% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Kodal Minerals' growth isn’t the focus of this broad overview, however, take into account 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 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 Kodal Minerals has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high 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:

This article is not intended to be a comprehensive analysis on Kodal Minerals, so if you are interested in understanding the company at a deeper level, take a look at Kodal Minerals' company page on Simply Wall St. We've also put together a list of key factors you should further examine:

1. Historical Track Record: What has Kodal 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 Kodal 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.

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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.