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So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying. Of course Northern Dynasty Minerals may not be the best stock to buy.
On another note, we conducted an in-depth investigation of the company, and identified 6 warning signs for Northern Dynasty Minerals (3 don't sit too well with us!) that you should be aware of before investing here. After looking at that range of measures, we think shareholders should be extremely attentive to how the company is using its cash, as the cash burn makes us uncomfortable.
On this analysis of Northern Dynasty Minerals' cash burn, we think its cash burn reduction was reassuring, while its cash runway has us a bit worried. How Risky Is Northern Dynasty Minerals' Cash Burn Situation? As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution. Since it has a market capitalisation of CA$241m, Northern Dynasty Minerals' CA$47m in cash burn equates to about 20% of its market value. You can see how its cash balance has changed over time in the image below. That's quite a short cash runway, indicating the company must either reduce its annual cash burn or replenish its cash. So it had a cash runway of approximately 7 months from September 2021. Looking at the last year, the company burnt through CA$47m. When Northern Dynasty Minerals last reported its balance sheet in September 2021, it had zero debt and cash worth CA$28m.
Let's start with an examination of the business' cash, relative to its cash burn.Ĭheck out our latest analysis for Northern Dynasty Minerals How Long Is Northern Dynasty Minerals' Cash Runway?Ī company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. So should Northern Dynasty Minerals ( TSE:NDM) shareholders be worried about its cash burn? For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Just because a business does not make any money, does not mean that the stock will go down.
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