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    Here's Why We're Watching Coda Minerals' (ASX:COD) Cash Burn Situation

    Simply Wall St·10/16/2026 02:36:46
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    Just because a business does not make any money, does not mean that the stock will go down. 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, the natural question for Coda Minerals (ASX:COD) shareholders is whether they should be concerned by its rate of 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. First, we'll determine its cash runway by comparing its cash burn with its cash reserves.

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    Does Coda Minerals Have A Long Cash Runway?

    A company's cash runway is calculated by dividing its cash hoard by its cash burn. As at June 2026, Coda Minerals had cash of AU$11m and no debt. Importantly, its cash burn was AU$8.9m over the trailing twelve months. That means it had a cash runway of around 14 months as of June 2026. That's not too bad, but it's fair to say the end of the cash runway is in sight, unless cash burn reduces drastically. Depicted below, you can see how its cash holdings have changed over time.

    debt-equity-history-analysis
    ASX:COD Debt to Equity History October 16th 2026

    See our latest analysis for Coda Minerals

    How Is Coda Minerals' Cash Burn Changing Over Time?

    Because Coda Minerals 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. In fact, it ramped its spending strongly over the last year, increasing cash burn by 129%. That sort of spending growth rate can't continue for very long before it causes balance sheet weakness, generally speaking. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

    Can Coda Minerals Raise More Cash Easily?

    Given its cash burn trajectory, Coda Minerals shareholders may wish to consider how easily it could raise more cash, despite its solid cash runway. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. 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.

    Since it has a market capitalisation of AU$41m, Coda Minerals' AU$8.9m in cash burn equates to about 22% of its market value. That's not insignificant, and if the company had to sell enough shares to fund another year's growth at the current share price, you'd likely witness fairly costly dilution.

    How Risky Is Coda Minerals' Cash Burn Situation?

    On this analysis of Coda Minerals' cash burn, we think its cash runway was reassuring, while its increasing cash burn has us a bit worried. Summing up, we think the Coda Minerals' cash burn is a risk, based on the factors we mentioned in this article. Separately, we looked at different risks affecting the company and spotted 4 warning signs for Coda Minerals (of which 2 make us uncomfortable!) you should know about.

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