We’re Hopeful That Benz Mining (CVE:BZ) Will Use Its Cash Wisely
Even when a business is losing money, it’s possible for shareholders to make money if they buy a good business at the right price. By way of example, Benz Mining (CVE:BZ) has seen its share price rise 432% over the last year, delighting many shareholders. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
In light of its strong share price run, we think now is a good time to investigate how risky Benz Mining’s cash burn is. For the purposes of this article, cash burn is the annual rate at which an unprofitable company spends cash to fund its growth; its negative free cash flow. The first step is to compare its cash burn with its cash reserves, to give us its ‘cash runway’.
When Might Benz Mining Run Out Of Money?
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 Benz Mining last reported its April 2026 balance sheet in July 2026, it had zero debt and cash worth CA$81m. Looking at the last year, the company burnt through CA$35m. Therefore, from April 2026 it had 2.3 years of cash runway. That’s decent, giving the company a couple years to develop its business. Depicted below, you can see how its cash holdings have changed over time.
View our latest analysis for Benz Mining
How Is Benz Mining’s Cash Burn Changing Over Time?
Because Benz Mining isn’t currently generating revenue, we consider it an early-stage business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. Remarkably, it actually increased its cash burn by 732% in the last year. With that kind of spending growth its cash runway will shorten quickly, as it simultaneously uses its cash while increasing the burn rate. 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.
Can Benz Mining Raise More Cash Easily?
Given its cash burn trajectory, Benz Mining shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Many companies end up issuing new shares to fund future growth. We can compare a company’s cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year’s operations.
Benz Mining’s cash burn of CA$35m is about 3.3% of its CA$1.1b market capitalisation. That’s a low proportion, so we figure the company would be able to raise more cash to fund growth, with a little dilution, or even to simply borrow some money.
Is Benz Mining’s Cash Burn A Worry?
Even though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought Benz Mining’s cash burn relative to its market cap was relatively promising. Considering all the factors discussed in this article, we’re not overly concerned about the company’s cash burn, although we do think shareholders should keep an eye on how it develops. Taking a deeper dive, we’ve spotted 5 warning signs for Benz Mining you should be aware of, and 4 of them are potentially serious.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)
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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.
