Persistent UnprofitabilityRecurring large net losses and negative operating profitability undermine capital formation and operational sustainability. Over the medium term, persistent unprofitability erodes reserves, restricts reinvestment in exploration, and forces management to secure external funding to sustain operations.
Negative Operating And Free Cash FlowConsistent negative operating and free cash flow create structural reliance on external financing or equity issuance. This weak cash generation reduces strategic flexibility, can dilute existing shareholders, and raises execution risk for multi-stage exploration programs requiring sustained funding.
Eroding Equity BaseMaterial decline in shareholders' equity signals cumulative losses are consuming the capital buffer. A shrinking equity base increases vulnerability to adverse outcomes and reduces ability to absorb further losses, making future capital raises more likely and potentially more dilutive.