Companies Like Encounter Resources (ASX:ENR) Are In A Position To Invest In Growth
So should Encounter Resources (ASX:ENR) shareholders be worried about its cash burn? 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'.
See our latest analysis for Encounter Resources
A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. As at December 2024, Encounter Resources had cash of AU$23m and no debt. Looking at the last year, the company burnt through AU$11m. That means it had a cash runway of about 2.1 years as of December 2024. Arguably, that's a prudent and sensible length of runway to have. You can see how its cash balance has changed over time in the image below.
While Encounter Resources did record statutory revenue of AU$92k over the last year, it didn't have any revenue from operations. That means we consider it a pre-revenue business, and we will focus our growth analysis on cash burn, for now. Over the last year its cash burn actually increased by 37%, which suggests that management are increasing investment in future growth, but not too quickly. That's not necessarily a bad thing, but investors should be mindful of the fact that will shorten the cash runway. Encounter Resources makes us a little nervous due to its lack of substantial operating revenue. We prefer most of the stocks on this list of stocks that analysts expect to grow.
Given its cash burn trajectory, Encounter Resources 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. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
Since it has a market capitalisation of AU$112m, Encounter Resources' AU$11m in cash burn equates to about 9.5% of its market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.
Even though its increasing cash burn makes us a little nervous, we are compelled to mention that we thought Encounter Resources' cash runway was relatively promising. Based on the factors mentioned in this article, we think its cash burn situation warrants some attention from shareholders, but we don't think they should be worried. On another note, we conducted an in-depth investigation of the company, and identified 5 warning signs for Encounter Resources (3 are significant!) that you should be aware of before investing here.
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.

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ST. HELIER, Jersey--(BUSINESS WIRE)--MAC Copper Limited ARBN 671 963 198 (NYSE:MTAL; ASX:MAC) MAC Copper Limited (NYSE:MTAL, ASX:MAC) (' MAC ' or the ' Company ') is pleased to provide the following update on the proposed acquisition of 100% of the issued share capital in MAC by Harmony Gold (Australia) Pty Ltd (a wholly owned subsidiary of Harmony Gold Mining Company Limited (JSE:HAR, NYSE:HMY)) (' Harmony ') by way of a Jersey law scheme of arrangement pursuant to Article 125 of the Companies (Jersey) Law 1991 (as amended) (' Scheme ') (the ' Transaction '). Capitalised terms used in this announcement have the meaning given to them in the Implementation Deed released to ASX and NYSE on 27 May 2025, unless the context otherwise requires. Directions hearing and indicative timetable MAC is pleased to advise that the First Court Hearing is scheduled for 10:00 a.m. (Jersey time) on 30 July 2025. The purpose of the First Court Hearing is to obtain an order from the Court to, among other things, dispatch the Scheme Circular and convene the Scheme Meeting and General Meeting. Following the conclusion of the First Court Hearing, MAC will release an announcement setting out the outcome of the hearing to be released on the ASX and furnished to the SEC. Subject to obtaining the order from the Court at the First Court Hearing, MAC anticipates the indicative timetable for the next steps of the Transaction to be as follows: Notes: All dates and times are based on MAC and Harmony's current expectations and are subject to change. If any of the dates and/or times in this expected timetable change materially, the revised dates and/or times will be published by a public announcement furnished to the SEC and released to the ASX and by making such announcement available on MAC's website at Individuals that become MAC Shareholders (or MAC CDI Holders) after this date will not be entitled to vote (or in the case of MAC CDI Holders, will not be entitled to instruct CHESS Depositary Nominees Pty Ltd to vote) at the Scheme Meeting and General Meeting. Further detail and information on the Transaction will be set out in the dispatched Scheme Circular. Status of conditions The Transaction is conditional, among other things, on MAC obtaining from each counterparty to the Silver Stream, the Copper Stream, the Royalty Deed and the Intercreditor Deed all necessary consents, approvals, amendments, exemptions or waivers in respect of the Transaction (in a form and subject to such conditions which are satisfactory to Harmony (acting reasonably) (the Consents Condition). MAC and Harmony have agreed that the Consents Condition will be taken to be satisfied when: various restructuring documents with Harmony, OR Royalties Limited (formerly Osisko Bermuda Limited) (OR Royalties) (in relation to the Copper Stream and the Silver Stream) and Glencore (in relation to the Royalty Deed) (the Restructuring Documents) have been executed by each of the parties to those documents; and certain specified conditions precedent to one of the Restructuring Documents, being a restructure deed between MAC, Harmony, OR Royalties, CSA Jersey Limited (a newly incorporated wholly-owned subsidiary of MAC), MAC Australia and CMPL, are satisfied or waived by OR Royalties (the Streams Restructure Deed). 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The release, publication or distribution of this announcement in jurisdictions other than Australia, the United States, Jersey and the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than Australia, the United States, Jersey and the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in Australia, the United States, Jersey and the United Kingdom or who are subject to the laws of another jurisdiction to vote their MAC Shares in respect of the Scheme, or to execute and deliver forms of proxy appointing another to vote on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located or to which they are subject. Any failure to comply with applicable legal or regulatory requirements of any jurisdiction may constitute a violation of securities laws in that jurisdiction. To the fullest extent permitted by law, the companies and persons involved in the Transaction disclaim any responsibility or liability for the violation of such restrictions by any person. Copies of this announcement and any formal documentation relating to the Transaction are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any such jurisdiction. Doing so may render invalid any related purported vote in respect of the Transaction. 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Time Business News
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The Australian Computer Society's 2024 Digital Pulse report highlighted a critical market gap in comprehensive startup support services. Scalare isn't just filling that gap – they're monetising it. A new way to invest in innovation The Tank Stream acquisition positions Scalare as something genuinely new in Australian markets. They're not just another investment vehicle – they're creating an entirely new asset class that combines startup growth potential with public market accessibility. For investors frustrated by the ASX's traditional focus on mining and banking, Scalare offers exposure to the innovation economy through a professionally managed, transparent structure. You get the upside of startup investing without the usual barriers, lock-ups, or minimum investment requirements.I've watched countless promising startups struggle to access both capital and support. Scalare Partners' model feels like it could be the future – not just for Australia, but as a template other markets might follow. The question isn't whether this approach will work. It's whether other countries or companies will be smart enough to copy it. Investment considerations: Potential investors should review Scalare Partners' latest financial reports and consider their risk tolerance before investing. Past performance does not guarantee future results. TIME BUSINESS NEWS