Market Cap $176.02 M Shares Outstanding 9.26 B Public Float 8.37...

First 2 Last

Share
Profile

Follow
mrkiong

61 Posts.

5

28/08/17

11:48

Post #: 26802711
Share
Originally posted by mmoore1957 ↑

So all this talk of bananas is giving me the urge to put a valuation on AGO based on my forecast displayed in my thread dated 27/8/17. The usual valuation methodologies I employ are:
1. PE Ratio - cannot be used here because profit < 0
2. EV/FCF - OK here because FCF > 0
3. NPV - OK here because FCF > 0

Valuation Methodology:
A. EV/FCF
1. The EV/FCF is calculated by dividing the EV (Enterprise Value) by FCF (Free Cash Flow)
2. EV = MC (Market Capitalisation) + Debt - Cash.
3. FCF = Operating cashflow - sustaining capital + net interest expense (adjusted for tax)
4. I used FMG as the reference company and calculated a EV/FCF of 5
5. The AGO FCF from my FY2018 = A$52m. I have added back the interest A$5m to give an adjusted FCF of A$57m
6. AGO EV = 5 x 57 = A$285m - A$30m (FY2018 Forecast Cash at 30/6/18) - A$0m (debt fully repaid in FY2018) = A$255m
7. AGO EV per share = A$255m/9164m shares = A$0.028
B. NPV
1. Discount rate = 8%
2. Used AGO's minelife and production forecasts
3. Otherwise based on assumptions in my forecast
4. NPV was applied to FCF over minelife
5. The result NPV = A$263m
6. AGO NPV per share = A$263m/9164m shares = A$0.029

So taking an average of the two valuation methodologies the current value of AGO = 2.85 cps. Compare this to the current AGO SP of 1.90 cps and the maximum SP upside is 0.95 cps which is 50%.

There it is and I'm sure this will ruffle a few feathers

Expand

Market Cap
$176.02 M

Shares Outstanding
9.26 B

Public Float
8.37 B

Base on public float, It possible hit A$0.03.
AGO Price at posting: 1.9¢ Sentiment: Buy Disclosure: Held
4 Upvote

0 Great analysis

Reply

Top Stories

Listen: HotCopper Wire Podcast 015 – Yeah, we're thinking the IPO market is back

EVR

Pilot plant next up for EVR at Los Lirios after 'promising' antimony sampling

Trump chides Powell as Goldman call for calm. The RBA must be nervous

QAN

Qantas dips on cyberattack news, but no Medibank-tier carnage

Wednesday's HotCopper trends: Trigg $12.5M placement, Domino's shock exit | July 2

First 2 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Market Cap $176.02 M Shares Outstanding 9.26 B Public Float 8.37...

Top Stories

Listen: HotCopper Wire Podcast 015 – Yeah, we're thinking the IPO market is back

Pilot plant next up for EVR at Los Lirios after 'promising' antimony sampling

Trump chides Powell as Goldman call for calm. The RBA must be nervous

Qantas dips on cyberattack news, but no Medibank-tier carnage

Wednesday's HotCopper trends: Trigg $12.5M placement, Domino's shock exit | July 2

Featured News