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Belo Sun Mining (TSE:BSX) Is In A Good Position To Deliver On Growth Plans

Simply Wall St · 2d ago

We can readily understand why investors are attracted to unprofitable companies. Indeed, Belo Sun Mining (TSE:BSX) stock is up 1,250% in the last year, providing strong gains for shareholders. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

Given its strong share price performance, we think it's worthwhile for Belo Sun Mining shareholders to consider whether its cash burn is concerning. In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

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How Long Is Belo Sun Mining's Cash Runway?

You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Belo Sun Mining last reported its September 2025 balance sheet in November 2025, it had zero debt and cash worth CA$6.4m. In the last year, its cash burn was CA$6.6m. Therefore, from September 2025 it had roughly 12 months of cash runway. That's quite a short cash runway, indicating the company must either reduce its annual cash burn or replenish its cash. Depicted below, you can see how its cash holdings have changed over time.

debt-equity-history-analysis
TSX:BSX Debt to Equity History December 7th 2025

See our latest analysis for Belo Sun Mining

How Is Belo Sun Mining's Cash Burn Changing Over Time?

Belo Sun Mining didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. As it happens, the company's cash burn reduced by 6.3% over the last year, which suggests that management may be mindful of the risks of their depleting cash reserves. While the past is always worth studying, it is the future that matters most of all. So you might want to take a peek at how much the company is expected to grow in the next few years.

How Hard Would It Be For Belo Sun Mining To Raise More Cash For Growth?

Even though it has reduced its cash burn recently, shareholders should still consider how easy it would be for Belo Sun Mining to raise more cash in the future. Companies can raise capital through either debt or equity. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

Belo Sun Mining's cash burn of CA$6.6m is about 2.6% of its CA$248m market capitalisation. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.

Is Belo Sun Mining's Cash Burn A Worry?

On this analysis of Belo Sun Mining's cash burn, we think its cash burn relative to its market cap was reassuring, while its cash runway has us a bit worried. While we're the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Belo Sun Mining's situation. An in-depth examination of risks revealed 3 warning signs for Belo Sun Mining that readers should think about before committing capital to this stock.

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