Market Sentiment Around Loss-Making AfriTin Mining Limited (LON:ATM)

We feel now is a pretty good time to analyse AfriTin Mining Limited's (LON:ATM) business as it appears the company may be on the cusp of a considerable accomplishment. AfriTin Mining Limited, together with its subsidiaries, engages in the exploration and development of projects in Namibia and South Africa. The UK£56m market-cap company’s loss lessened since it announced a UK£5.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£5.4m, as it approaches breakeven. The most pressing concern for investors is AfriTin Mining'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 AfriTin Mining

Consensus from 2 of the British Metals and Mining analysts is that AfriTin Mining is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of UK£3.7m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 82% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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Given this is a high-level overview, we won’t go into details of AfriTin Mining's upcoming projects, but, keep in mind that generally 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 1.9% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

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

1. Valuation: What is AfriTin Mining 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 AfriTin Mining is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on AfriTin 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.

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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