Mineral Resources (ASX:MIN) AU$2.3 billion cash burn in the fiscal first half was "very surprising and massively underestimated", according to a Jan. 31, note by Jarden Research.

MIN disclosed last week in its quarterly results that its net debt increased to AU$5.1 billion as of Dec.31, 2024, from AU$4.4 billion as of June. 30, 2024.

The increase in net debt comes even with a cash receipt of AU$1.1 billion from the sale of its 49% stake in its Onslow iron project in Western Australia, as well as an initial AU$780 million gas transaction payment from Hancock prospecting during the second quarter, Jarden Research said.

Jarden Research notes that its projections did not have a large enough weighting for the company's AU$1.4 billion capital expenditure in the December quarter.

The firm adds that the projections also did not include the company's AU$500 million working capital unwind during the quarter.

Jarden believes that the Onslow project's expected cumulative tax proceeds of AU$520 million per annum will not compensate for the significant net debt balance.

The adviser maintained Mineral Resources' sell rating while slashing its price target to AU$22.80 from AU$27.60.

Shares of the company fell 4% in recent Monday trade.