Intrinsic value of Alacer Gold Corp. - ASR

Previous Close

$2.47

  Intrinsic Value

$9.21

stock screener

  Rating & Target

str. buy

+273%

Previous close

$2.47

 
Intrinsic value

$9.21

 
Up/down potential

+273%

 
Rating

str. buy

We calculate the intrinsic value of ASR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  307
  475
  710
  1,030
  1,453
  1,998
  2,681
  3,521
  4,530
  5,722
  7,106
  8,687
  10,471
  12,459
  14,649
  17,040
  19,629
  22,411
  25,382
  28,537
  31,872
  35,383
  39,069
  42,927
  46,956
  51,158
  55,534
  60,087
  64,821
  69,741
Variable operating expenses, $m
  69
  106
  159
  231
  325
  447
  601
  789
  1,015
  1,282
  1,592
  1,946
  2,346
  2,791
  3,281
  3,817
  4,397
  5,020
  5,686
  6,392
  7,139
  7,926
  8,751
  9,616
  10,518
  11,459
  12,440
  13,459
  14,520
  15,622
Fixed operating expenses, $m
  159
  163
  167
  170
  174
  178
  182
  186
  190
  194
  198
  203
  207
  212
  216
  221
  226
  231
  236
  241
  246
  252
  257
  263
  269
  275
  281
  287
  293
  300
Total operating expenses, $m
  228
  269
  326
  401
  499
  625
  783
  975
  1,205
  1,476
  1,790
  2,149
  2,553
  3,003
  3,497
  4,038
  4,623
  5,251
  5,922
  6,633
  7,385
  8,178
  9,008
  9,879
  10,787
  11,734
  12,721
  13,746
  14,813
  15,922
Operating income, $m
  79
  205
  384
  629
  954
  1,372
  1,899
  2,546
  3,326
  4,246
  5,316
  6,539
  7,919
  9,456
  11,152
  13,002
  15,006
  17,160
  19,460
  21,903
  24,486
  27,206
  30,060
  33,048
  36,169
  39,424
  42,814
  46,340
  50,008
  53,819
EBITDA, $m
  79
  205
  384
  629
  954
  1,372
  1,899
  2,546
  3,326
  4,246
  5,316
  6,539
  7,919
  9,456
  11,152
  13,002
  15,006
  17,160
  19,460
  21,903
  24,486
  27,206
  30,060
  33,048
  36,169
  39,424
  42,814
  46,340
  50,008
  53,819
Interest expense (income), $m
  0
  0
  6
  15
  28
  46
  69
  98
  136
  181
  236
  301
  376
  462
  559
  668
  787
  917
  1,058
  1,209
  1,371
  1,543
  1,724
  1,915
  2,116
  2,326
  2,545
  2,774
  3,012
  3,260
  3,518
Earnings before tax, $m
  79
  199
  369
  601
  908
  1,304
  1,801
  2,411
  3,145
  4,010
  5,015
  6,163
  7,456
  8,897
  10,484
  12,216
  14,089
  16,102
  18,251
  20,532
  22,943
  25,481
  28,145
  30,932
  33,843
  36,879
  40,040
  43,328
  46,748
  50,302
Tax expense, $m
  21
  54
  100
  162
  245
  352
  486
  651
  849
  1,083
  1,354
  1,664
  2,013
  2,402
  2,831
  3,298
  3,804
  4,348
  4,928
  5,544
  6,195
  6,880
  7,599
  8,352
  9,138
  9,957
  10,811
  11,699
  12,622
  13,581
Net income, $m
  58
  145
  269
  439
  663
  952
  1,315
  1,760
  2,296
  2,928
  3,661
  4,499
  5,443
  6,495
  7,653
  8,917
  10,285
  11,755
  13,323
  14,989
  16,749
  18,601
  20,546
  22,580
  24,706
  26,922
  29,229
  31,630
  34,126
  36,720

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,409
  2,177
  3,256
  4,724
  6,665
  9,163
  12,300
  16,150
  20,781
  26,249
  32,595
  39,850
  48,033
  57,150
  67,198
  78,167
  90,042
  102,803
  116,430
  130,902
  146,200
  162,308
  179,215
  196,912
  215,396
  234,670
  254,743
  275,628
  297,343
  319,913
Adjusted assets (=assets-cash), $m
  1,409
  2,177
  3,256
  4,724
  6,665
  9,163
  12,300
  16,150
  20,781
  26,249
  32,595
  39,850
  48,033
  57,150
  67,198
  78,167
  90,042
  102,803
  116,430
  130,902
  146,200
  162,308
  179,215
  196,912
  215,396
  234,670
  254,743
  275,628
  297,343
  319,913
Revenue / Adjusted assets
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
  0.218
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  118
  183
  273
  397
  559
  769
  1,032
  1,355
  1,744
  2,203
  2,736
  3,345
  4,031
  4,797
  5,640
  6,561
  7,557
  8,628
  9,772
  10,987
  12,271
  13,623
  15,041
  16,527
  18,078
  19,696
  21,381
  23,133
  24,956
  26,850
Total debt, $m
  180
  440
  806
  1,304
  1,962
  2,808
  3,872
  5,177
  6,747
  8,600
  10,752
  13,211
  15,985
  19,076
  22,482
  26,201
  30,226
  34,552
  39,172
  44,078
  49,264
  54,725
  60,456
  66,455
  72,721
  79,255
  86,060
  93,140
  100,501
  108,152
Total liabilities, $m
  478
  738
  1,104
  1,602
  2,260
  3,106
  4,170
  5,475
  7,045
  8,898
  11,050
  13,509
  16,283
  19,374
  22,780
  26,499
  30,524
  34,850
  39,470
  44,376
  49,562
  55,023
  60,754
  66,753
  73,019
  79,553
  86,358
  93,438
  100,799
  108,450
Total equity, $m
  931
  1,439
  2,152
  3,123
  4,406
  6,057
  8,130
  10,675
  13,736
  17,350
  21,545
  26,341
  31,750
  37,776
  44,418
  51,669
  59,518
  67,953
  76,960
  86,526
  96,638
  107,286
  118,461
  130,159
  142,377
  155,117
  168,385
  182,190
  196,544
  211,462
Total liabilities and equity, $m
  1,409
  2,177
  3,256
  4,725
  6,666
  9,163
  12,300
  16,150
  20,781
  26,248
  32,595
  39,850
  48,033
  57,150
  67,198
  78,168
  90,042
  102,803
  116,430
  130,902
  146,200
  162,309
  179,215
  196,912
  215,396
  234,670
  254,743
  275,628
  297,343
  319,912
Debt-to-equity ratio
  0.190
  0.310
  0.370
  0.420
  0.450
  0.460
  0.480
  0.480
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
Adjusted equity ratio
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661
  0.661

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  58
  145
  269
  439
  663
  952
  1,315
  1,760
  2,296
  2,928
  3,661
  4,499
  5,443
  6,495
  7,653
  8,917
  10,285
  11,755
  13,323
  14,989
  16,749
  18,601
  20,546
  22,580
  24,706
  26,922
  29,229
  31,630
  34,126
  36,720
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  58
  145
  269
  439
  663
  952
  1,315
  1,760
  2,296
  2,928
  3,661
  4,499
  5,443
  6,495
  7,653
  8,917
  10,285
  11,755
  13,323
  14,989
  16,749
  18,601
  20,546
  22,580
  24,706
  26,922
  29,229
  31,630
  34,126
  36,720
Change in working capital, $m
  44
  64
  91
  123
  163
  210
  263
  323
  389
  459
  533
  609
  687
  765
  843
  921
  997
  1,071
  1,144
  1,215
  1,284
  1,352
  1,419
  1,485
  1,551
  1,618
  1,685
  1,753
  1,823
  1,894
Cash from operations, $m
  13
  81
  179
  315
  500
  742
  1,051
  1,437
  1,907
  2,469
  3,128
  3,890
  4,756
  5,730
  6,810
  7,997
  9,289
  10,684
  12,180
  13,774
  15,465
  17,249
  19,127
  21,095
  23,154
  25,304
  27,544
  29,877
  32,303
  34,826
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  13
  81
  179
  315
  500
  742
  1,051
  1,437
  1,907
  2,469
  3,128
  3,890
  4,756
  5,730
  6,810
  7,997
  9,289
  10,684
  12,180
  13,774
  15,465
  17,249
  19,127
  21,095
  23,154
  25,304
  27,544
  29,877
  32,303
  34,826
Issuance/(repayment) of debt, $m
  180
  260
  366
  498
  658
  847
  1,063
  1,305
  1,570
  1,853
  2,151
  2,460
  2,774
  3,091
  3,406
  3,719
  4,026
  4,326
  4,619
  4,906
  5,186
  5,461
  5,731
  5,999
  6,266
  6,534
  6,805
  7,080
  7,361
  7,651
Issuance/(repurchase) of shares, $m
  293
  362
  444
  532
  620
  699
  759
  785
  766
  686
  534
  297
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  473
  622
  810
  1,030
  1,278
  1,546
  1,822
  2,090
  2,336
  2,539
  2,685
  2,757
  2,774
  3,091
  3,406
  3,719
  4,026
  4,326
  4,619
  4,906
  5,186
  5,461
  5,731
  5,999
  6,266
  6,534
  6,805
  7,080
  7,361
  7,651
Total cash flow (excl. dividends), $m
  486
  704
  988
  1,345
  1,778
  2,288
  2,873
  3,527
  4,242
  5,008
  5,814
  6,646
  7,530
  8,820
  10,216
  11,715
  13,314
  15,010
  16,799
  18,680
  20,651
  22,710
  24,858
  27,094
  29,420
  31,838
  34,349
  36,957
  39,665
  42,477
Retained Cash Flow (-), $m
  -350
  -508
  -713
  -971
  -1,283
  -1,651
  -2,073
  -2,545
  -3,061
  -3,614
  -4,195
  -4,796
  -5,409
  -6,026
  -6,642
  -7,251
  -7,849
  -8,435
  -9,007
  -9,566
  -10,112
  -10,648
  -11,175
  -11,698
  -12,218
  -12,740
  -13,268
  -13,805
  -14,354
  -14,919
Prev. year cash balance distribution, $m
  290
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  425
  196
  275
  375
  495
  637
  800
  982
  1,181
  1,395
  1,619
  1,851
  2,121
  2,794
  3,574
  4,465
  5,465
  6,575
  7,792
  9,114
  10,539
  12,063
  13,683
  15,397
  17,202
  19,097
  21,081
  23,152
  25,311
  27,558
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  408
  179
  239
  308
  384
  462
  540
  614
  679
  731
  769
  790
  807
  938
  1,049
  1,135
  1,189
  1,211
  1,200
  1,158
  1,090
  1,001
  897
  784
  669
  557
  452
  358
  276
  208
Current shareholders' claim on cash, %
  62.3
  42.4
  30.9
  23.8
  19.2
  16.2
  14.0
  12.6
  11.6
  10.9
  10.5
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4
  10.4

Alacer Gold Corp. is an intermediate gold mining company. The Company is engaged in mining, development and exploration of mineral deposits in Turkey. The Company's segments include Turkish Business Unit and Corporate and other. It is engaged in the acquisition, exploration and production of gold in Turkey. The Company has interest in the Copler Gold Mine in Turkey operated by Anagold Madencilik Sanayi ve Ticaret A.S. (Anagold). The Copler Gold Mine is an open-pit, heap-leach operation that produces gold from oxide ore. The Copler orebody also contains refractory sulfide ore. The Copler Mine is located in east-central Turkey in the Erzincan Province, approximately 1,100 kilometers southeast from Istanbul and 550 kilometers east from Ankara, Turkey. The Company operates Copler Sulfide Expansion Project. The Company focuses on Cakmaktepe North, Cakmaktepe Central, Cakmaktepe Southeast, Cakmaktepe East and Bayramdere prospects.

FINANCIAL RATIOS  of  Alacer Gold Corp. (ASR)

Valuation Ratios
P/E Ratio 90.2
Price to Sales 3.8
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 14.4
Price to Free Cash Flow -4.8
Growth Rates
Sales Growth Rate -40.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 126.1%
Cap. Spend. - 3 Yr. Gr. Rate 18.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0.3
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.7%
Ret/ On Assets - 3 Yr. Avg. 5.2%
Return On Total Capital 0.9%
Ret/ On T. Cap. - 3 Yr. Avg. 6.8%
Return On Equity 0.9%
Return On Equity - 3 Yr. Avg. 6.8%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 13%
Gross Margin - 3 Yr. Avg. 30.3%
EBITDA Margin 26%
EBITDA Margin - 3 Yr. Avg. 41.4%
Operating Margin -1.6%
Oper. Margin - 3 Yr. Avg. 20%
Pre-Tax Margin -1.6%
Pre-Tax Margin - 3 Yr. Avg. 18.9%
Net Profit Margin 4.2%
Net Profit Margin - 3 Yr. Avg. 15.5%
Effective Tax Rate 800%
Eff/ Tax Rate - 3 Yr. Avg. 266.7%
Payout Ratio 0%

ASR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASR stock intrinsic value calculation we used $192 million for the last fiscal year's total revenue generated by Alacer Gold Corp.. The default revenue input number comes from 2016 income statement of Alacer Gold Corp.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ASR stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ASR is calculated based on our internal credit rating of Alacer Gold Corp., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Alacer Gold Corp..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ASR stock the variable cost ratio is equal to 22.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $156 million in the base year in the intrinsic value calculation for ASR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Alacer Gold Corp..

Corporate tax rate of 27% is the nominal tax rate for Alacer Gold Corp.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ASR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ASR are equal to 0%.

Life of production assets of 0 years is the average useful life of capital assets used in Alacer Gold Corp. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ASR is equal to 38.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $871 million for Alacer Gold Corp. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 293.09 million for Alacer Gold Corp. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Alacer Gold Corp. at the current share price and the inputted number of shares is $0.7 billion.

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