Negative ProfitabilityPersistent negative margins indicate the company is not yet converting revenue into profits, reflecting operational inefficiencies or high operating costs. Over months this constrains internal capital generation, slows progression to self-funded development stages, and increases dependency on external funding.
High LeverageVery high debt relative to equity materially raises solvency and refinancing risk and increases fixed servicing obligations. This structural leverage reduces financial flexibility, tightens capital allocation choices, and can impair the company's ability to fund exploration-to-development transitions without dilutive or costly financing.
Negative Free Cash FlowNegative free cash flow despite improved operating cash flow implies capex or working capital drains and insufficient cash to absorb net losses. Over the medium term this necessitates ongoing external capital or asset monetisation, creating funding risk for sustaining project development timelines.