With the business potentially at an important milestone, we thought we'd take a closer look at Southern Cross Gold Consolidated Ltd.'s (CVE:SXGC) future prospects. Southern Cross Gold Ltd engages in the exploration of natural resources in Australia. On 31 May 2024, the CA$685m market-cap company posted a loss of AU$8.0m for its most recent financial year. Many investors are wondering about the rate at which Southern Cross Gold Consolidated will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Southern Cross Gold Consolidated

According to the 2 industry analysts covering Southern Cross Gold Consolidated, the consensus is that breakeven is near. They expect the company to post a final loss in 2026, before turning a profit of AU$462k in 2027. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 84% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Southern Cross Gold Consolidated's upcoming projects, though, 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. Southern Cross Gold Consolidated currently 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. 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:

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

1. Historical Track Record: What has Southern Cross Gold Consolidated'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 Southern Cross Gold Consolidated'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.

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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.