Analysis of Lincoln Minerals Limited's Financial Statement (31...

Analysis of Lincoln Minerals Limited's Financial Statement (31 Dec 2024)

Lincoln Minerals Limited (ASX: LML) is in the exploration stage, focusing on graphite and iron ore projects. Here’s an analysis of their financial statements to assess their financial health and investment potential.

Key Financial Points:

1. Profit & Loss Analysis

• Revenue: $9,360 (minimal income, indicating the company is not yet generating significant revenue)
• Net Loss: ($1,890,230), which is worse than the previous period’s ($1,224,562)
• Loss Per Share: (0.09) cents per share (increasing losses indicate financial strain)
• Exploration Expenses: Increased significantly to ($1,034,405) from ($285,353), likely due to project advancements
• Administrative & Employee Costs: Fairly stable, but still high compared to cash reserves

Takeaway: The company is heavily spending on exploration without generating revenue, leading to increasing losses.

2. Balance Sheet & Cash Position

• Cash & Equivalents: $744,959 (down significantly from $2,573,340 in June 2024)
• Total Assets: $6,755,947 (majority being exploration assets, $5,561,127)
• Total Liabilities: $255,555 (low, meaning minimal debt)
• Net Assets: $6,500,392 (down from $8,186,946 in June 2024)

Takeaway: Cash reserves are depleting rapidly, meaning the company will need further funding soon.

3. Cash Flow Analysis

• Operating & Investing Cash Outflow: ($1,829,381), primarily due to high exploration spending
• Financing Activities: Only $1,000 raised in the period (a red flag)
• End Cash Balance: $744,959, meaning they have less than a year of cash runway at current burn rates.

Takeaway: Without new capital or revenue, the company will run out of cash soon.

Investment Considerations

✅ Positives:

• Exploration projects are progressing, especially in graphite (a key battery mineral).
• No significant debt.
• Directors state they have options to raise new capital.

❌ Risks:

• Going Concern Issue: The company acknowledges financial uncertainty.
• Cash Burn Rate: At the current rate, the company needs more funding soon.
• No Revenue: Still in exploration mode with no income generation.

Would I Invest?

At this stage, probably not, unless:

1. They secure additional funding (capital raise, partnerships, or grants).
2. They provide clearer development milestones (e.g., mining licenses, off-take agreements).
3. Market conditions for graphite improve significantly.

For a high-risk, speculative investor, it could be worth watching if they announce major funding or development progress. Otherwise, I’d wait for better financial stability before considering investment.

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