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When Can We Expect A Profit From McEwen Mining Inc. (NYSE:MUX)?

We feel now is a pretty good time to analyse McEwen Mining Inc.'s (NYSE:MUX) business as it appears the company may be on the cusp of a considerable accomplishment. McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver deposits in the United States, Canada, Mexico, and Argentina. With the latest financial year loss of US$152m and a trailing-twelve-month loss of US$52m, the US$510m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on McEwen Mining's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

McEwen Mining is bordering on breakeven, according to the 3 American Metals and Mining analysts. They expect the company to post a final loss in 2021, before turning a profit of US$45m in 2022. Therefore, the company is expected 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 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 166% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growthNYSE:MUX Earnings Per Share Growth September 21st 2021

Given this is a high-level overview, we won’t go into details of McEwen Mining's upcoming projects, however, take into account that generally 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.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 13% 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 key fundamentals of McEwen Mining 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 McEwen Mining, take a look at McEwen Mining's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

  1. Historical Track Record: What has McEwen Mining'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 McEwen 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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