We Think Western Copper and Gold (TSE:WRN) Can Afford To Drive Business Growth
Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the...
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. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly. So should Western Copper and Gold (TSE:WRN) shareholders be worried about its cash burn? In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth.
First, we'll determine its cash runway by comparing its cash burn with its cash reserves. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. When Might Western Copper and Gold 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. In June 2025, Western Copper and Gold had CA$61m in cash, and was debt-free. In the last year, its cash burn was CA$22m. So it had a cash runway of about 2.8 years from June 2025. Importantly, analysts think that Western Copper and Gold will reach cashflow breakeven in 4 years.
Essentially, that means the company will either reduce its cash burn, or else require more cash. You can see how its cash balance has changed over time in the image below. TSX:WRN Debt to Equity History September 4th 2025 View our latest analysis for Western Copper and Gold How Is Western Copper and Gold's Cash Burn Changing Over Time? Because Western Copper and Gold 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. Cash burn was pretty flat over the last year, which suggests that management are holding spending steady while the business advances its strategy.
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 Western Copper and Gold To Raise More Cash For Growth? Since its cash burn is increasing (albeit only slightly), Western Copper and Gold shareholders should still be mindful of the possibility it will require more cash in the future. 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.
By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn. Story Continues Western Copper and Gold has a market capitalisation of CA$407m and burnt through CA$22m last year, which is 5.4% of the company's market value. 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. So, Should We Worry About Western Copper and Gold's Cash Burn?
It may already be apparent to you that we're relatively comfortable with the way Western Copper and Gold is burning through its cash. For example, we think its cash runway suggests that the company is on a good path. Although its increasing cash burn does give us reason for pause, the other metrics we discussed in this article form a positive picture overall. One real positive is that analysts are forecasting that the company will reach breakeven. After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash, as it seems on track to meet its needs over the medium term.
On another note, Western Copper and Gold has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts) Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.