Cash runway

Cash divided by the burn rate. A single division — and yet, at companies without revenue, the figure that says most about the coming twelve months.

Cash runway (months) = cash at the reporting date ÷ (burn rate per quarter ÷ 3)

Why it says more than the cash balance

"CAD 4.1 million in the bank" means nothing without context. At a burn rate of 300,000 a quarter that lasts years. At 1.4 million a quarter it is not nine months.

Only the runway turns it into a statement — and the statement concerns not the bank balance but the negotiating position.

The real question

It is not "how long does the money last" but:

Does it last beyond the next data point?

Data point means: drill results, an updated resource estimate, a permitting decision or, at a biotech company, the readout of a trial.

It does → the company can wait. If the results are good, it finances afterwards at a higher price — or not at all, because a partner appears.
It does not → it has to raise money beforehand, without the results in hand. The market knows this, and the price of the financing reflects it. The end of it is dilution on poor terms, quite regardless of how good the project is.

Two companies with the same project and the same resource can therefore be worth very different amounts — on account of the calendar alone.

What to watch for

The burn rate is not constant. A drilling season costs a multiple of the quiet months. An average across four quarters can suggest a runway that does not exist during the season. We work with the rate of the last two quarters and state the period.

The reporting date matters. A quarterly report is already six to eight weeks old by the time it is published. On a runway of nine months that is a sixth of the distance.

Committed is not the same as available. Announced financings, placements not yet closed and options over further tranches do not belong in the numerator while the money is not there.

How we report it

In every piece of analysis, with four figures: cash at the reporting date, burn rate per quarter, runway in months — and whether it extends beyond the next data point.

Version 1 · 11 August 2026