With the business potentially at an important milestone, we thought we'd take a closer look at Newcore Gold Ltd.'s (CVE:NCAU) future prospects. Newcore Gold Ltd., a mineral exploration and mine development company, engages in the acquisition, advancement, and development of precious mineral properties in Ghana. With the latest financial year loss of CA$4.0m and a trailing-twelve-month loss of CA$3.7m, the CA$25m market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Newcore Gold's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Newcore Gold

Consensus from 3 of the Canadian Metals and Mining analysts is that Newcore Gold is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$1.3m in 2024. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 33% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Newcore Gold's growth isn’t the focus of this broad overview, however, take into account that typically 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, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Newcore Gold 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. 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:

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

1. Historical Track Record: What has Newcore Gold'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 Newcore Gold'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.

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