Intrinsic value of Yamana Gold - AUY

Previous Close

$3.12

  Intrinsic Value

$1.07

stock screener

  Rating & Target

str. sell

-66%

Previous close

$3.12

 
Intrinsic value

$1.07

 
Up/down potential

-66%

 
Rating

str. sell

We calculate the intrinsic value of AUY 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   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, %
  3.89
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
  5.08
  5.08
  5.07
  5.06
Revenue, $m
  1,788
  1,901
  2,018
  2,140
  2,267
  2,400
  2,538
  2,683
  2,834
  2,991
  3,156
  3,328
  3,508
  3,696
  3,893
  4,100
  4,316
  4,542
  4,779
  5,027
  5,287
  5,560
  5,846
  6,145
  6,460
  6,789
  7,135
  7,498
  7,879
  8,278
  8,697
Variable operating expenses, $m
 
  4,162
  4,416
  4,680
  4,956
  5,244
  5,544
  5,857
  6,184
  6,525
  6,882
  7,212
  7,602
  8,010
  8,437
  8,884
  9,352
  9,842
  10,356
  10,894
  11,457
  12,048
  12,668
  13,318
  13,999
  14,713
  15,463
  16,249
  17,073
  17,939
  18,847
Fixed operating expenses, $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 operating expenses, $m
  2,261
  4,162
  4,416
  4,680
  4,956
  5,244
  5,544
  5,857
  6,184
  6,525
  6,882
  7,212
  7,602
  8,010
  8,437
  8,884
  9,352
  9,842
  10,356
  10,894
  11,457
  12,048
  12,668
  13,318
  13,999
  14,713
  15,463
  16,249
  17,073
  17,939
  18,847
Operating income, $m
  -474
  -2,261
  -2,398
  -2,540
  -2,689
  -2,844
  -3,005
  -3,174
  -3,350
  -3,534
  -3,726
  -3,884
  -4,094
  -4,314
  -4,544
  -4,784
  -5,036
  -5,300
  -5,577
  -5,867
  -6,170
  -6,489
  -6,822
  -7,172
  -7,539
  -7,924
  -8,327
  -8,751
  -9,195
  -9,661
  -10,150
EBITDA, $m
  -12
  -1,752
  -1,860
  -1,972
  -2,089
  -2,212
  -2,339
  -2,472
  -2,611
  -2,757
  -2,908
  -3,067
  -3,233
  -3,406
  -3,588
  -3,778
  -3,977
  -4,185
  -4,404
  -4,632
  -4,872
  -5,124
  -5,387
  -5,663
  -5,953
  -6,257
  -6,575
  -6,910
  -7,260
  -7,628
  -8,014
Interest expense (income), $m
  96
  88
  102
  116
  131
  147
  164
  181
  199
  218
  237
  258
  279
  302
  325
  350
  375
  402
  430
  460
  491
  523
  557
  593
  630
  669
  710
  753
  798
  846
  895
Earnings before tax, $m
  -616
  -2,348
  -2,500
  -2,657
  -2,820
  -2,991
  -3,169
  -3,355
  -3,549
  -3,752
  -3,963
  -4,142
  -4,373
  -4,616
  -4,869
  -5,134
  -5,412
  -5,703
  -6,007
  -6,326
  -6,661
  -7,012
  -7,379
  -7,765
  -8,169
  -8,593
  -9,037
  -9,504
  -9,993
  -10,506
  -11,045
Tax expense, $m
  -325
  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
Net income, $m
  -308
  -2,348
  -2,500
  -2,657
  -2,820
  -2,991
  -3,169
  -3,355
  -3,549
  -3,752
  -3,963
  -4,142
  -4,373
  -4,616
  -4,869
  -5,134
  -5,412
  -5,703
  -6,007
  -6,326
  -6,661
  -7,012
  -7,379
  -7,765
  -8,169
  -8,593
  -9,037
  -9,504
  -9,993
  -10,506
  -11,045

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  173
  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
  8,802
  9,182
  9,748
  10,338
  10,953
  11,594
  12,263
  12,961
  13,690
  14,451
  15,246
  16,078
  16,947
  17,857
  18,808
  19,805
  20,848
  21,941
  23,085
  24,284
  25,541
  26,859
  28,240
  29,688
  31,207
  32,799
  34,470
  36,222
  38,061
  39,990
  42,014
Adjusted assets (=assets-cash), $m
  8,629
  9,182
  9,748
  10,338
  10,953
  11,594
  12,263
  12,961
  13,690
  14,451
  15,246
  16,078
  16,947
  17,857
  18,808
  19,805
  20,848
  21,941
  23,085
  24,284
  25,541
  26,859
  28,240
  29,688
  31,207
  32,799
  34,470
  36,222
  38,061
  39,990
  42,014
Revenue / Adjusted assets
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
  0.207
Average production assets, $m
  7,945
  8,446
  8,968
  9,510
  10,076
  10,666
  11,281
  11,923
  12,593
  13,293
  14,025
  14,790
  15,590
  16,426
  17,302
  18,219
  19,178
  20,183
  21,236
  22,340
  23,496
  24,708
  25,978
  27,310
  28,707
  30,172
  31,709
  33,321
  35,013
  36,787
  38,649
Working capital, $m
  77
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
Total debt, $m
  1,746
  1,918
  2,194
  2,480
  2,779
  3,091
  3,416
  3,755
  4,109
  4,479
  4,866
  5,270
  5,692
  6,134
  6,597
  7,081
  7,588
  8,119
  8,675
  9,258
  9,869
  10,509
  11,181
  11,884
  12,622
  13,397
  14,208
  15,060
  15,954
  16,891
  17,875
Total liabilities, $m
  4,290
  4,462
  4,738
  5,024
  5,323
  5,635
  5,960
  6,299
  6,653
  7,023
  7,410
  7,814
  8,236
  8,678
  9,141
  9,625
  10,132
  10,663
  11,219
  11,802
  12,413
  13,053
  13,725
  14,428
  15,166
  15,941
  16,752
  17,604
  18,498
  19,435
  20,419
Total equity, $m
  4,512
  4,719
  5,011
  5,314
  5,630
  5,960
  6,303
  6,662
  7,036
  7,428
  7,836
  8,264
  8,711
  9,178
  9,668
  10,180
  10,716
  11,277
  11,866
  12,482
  13,128
  13,805
  14,515
  15,260
  16,040
  16,859
  17,718
  18,618
  19,563
  20,555
  21,595
Total liabilities and equity, $m
  8,802
  9,181
  9,749
  10,338
  10,953
  11,595
  12,263
  12,961
  13,689
  14,451
  15,246
  16,078
  16,947
  17,856
  18,809
  19,805
  20,848
  21,940
  23,085
  24,284
  25,541
  26,858
  28,240
  29,688
  31,206
  32,800
  34,470
  36,222
  38,061
  39,990
  42,014
Debt-to-equity ratio
  0.387
  0.410
  0.440
  0.470
  0.490
  0.520
  0.540
  0.560
  0.580
  0.600
  0.620
  0.640
  0.650
  0.670
  0.680
  0.700
  0.710
  0.720
  0.730
  0.740
  0.750
  0.760
  0.770
  0.780
  0.790
  0.790
  0.800
  0.810
  0.820
  0.820
  0.830
Adjusted equity ratio
  0.503
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -308
  -2,348
  -2,500
  -2,657
  -2,820
  -2,991
  -3,169
  -3,355
  -3,549
  -3,752
  -3,963
  -4,142
  -4,373
  -4,616
  -4,869
  -5,134
  -5,412
  -5,703
  -6,007
  -6,326
  -6,661
  -7,012
  -7,379
  -7,765
  -8,169
  -8,593
  -9,037
  -9,504
  -9,993
  -10,506
  -11,045
Depreciation, amort., depletion, $m
  462
  509
  538
  568
  599
  632
  666
  702
  739
  777
  818
  817
  861
  908
  956
  1,007
  1,060
  1,115
  1,173
  1,234
  1,298
  1,365
  1,435
  1,509
  1,586
  1,667
  1,752
  1,841
  1,934
  2,032
  2,135
Funds from operations, $m
  626
  -1,839
  -1,961
  -2,088
  -2,221
  -2,359
  -2,503
  -2,653
  -2,810
  -2,974
  -3,146
  -3,325
  -3,512
  -3,708
  -3,913
  -4,128
  -4,352
  -4,588
  -4,834
  -5,092
  -5,363
  -5,647
  -5,944
  -6,256
  -6,583
  -6,926
  -7,285
  -7,663
  -8,059
  -8,474
  -8,910
Change in working capital, $m
  -39
  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 operations, $m
  665
  -1,839
  -1,961
  -2,088
  -2,221
  -2,359
  -2,503
  -2,653
  -2,810
  -2,974
  -3,146
  -3,325
  -3,512
  -3,708
  -3,913
  -4,127
  -4,352
  -4,587
  -4,834
  -5,092
  -5,363
  -5,646
  -5,944
  -6,256
  -6,583
  -6,925
  -7,285
  -7,662
  -8,058
  -8,474
  -8,909
Maintenance CAPEX, $m
  0
  -439
  -467
  -495
  -525
  -557
  -589
  -623
  -659
  -696
  -734
  -775
  -817
  -861
  -908
  -956
  -1,007
  -1,060
  -1,115
  -1,173
  -1,234
  -1,298
  -1,365
  -1,435
  -1,509
  -1,586
  -1,667
  -1,752
  -1,841
  -1,934
  -2,032
New CAPEX, $m
  -495
  -501
  -521
  -543
  -566
  -590
  -615
  -642
  -670
  -700
  -732
  -765
  -800
  -837
  -876
  -917
  -960
  -1,005
  -1,053
  -1,103
  -1,156
  -1,212
  -1,271
  -1,332
  -1,397
  -1,465
  -1,537
  -1,612
  -1,691
  -1,774
  -1,862
Cash from investing activities, $m
  -380
  -940
  -988
  -1,038
  -1,091
  -1,147
  -1,204
  -1,265
  -1,329
  -1,396
  -1,466
  -1,540
  -1,617
  -1,698
  -1,784
  -1,873
  -1,967
  -2,065
  -2,168
  -2,276
  -2,390
  -2,510
  -2,636
  -2,767
  -2,906
  -3,051
  -3,204
  -3,364
  -3,532
  -3,708
  -3,894
Free cash flow, $m
  285
  -2,779
  -2,949
  -3,127
  -3,312
  -3,505
  -3,707
  -3,919
  -4,139
  -4,370
  -4,612
  -4,864
  -5,129
  -5,406
  -5,696
  -6,000
  -6,318
  -6,652
  -7,002
  -7,369
  -7,753
  -8,156
  -8,579
  -9,023
  -9,488
  -9,977
  -10,489
  -11,026
  -11,590
  -12,182
  -12,804
Issuance/(repayment) of debt, $m
  -184
  267
  275
  287
  299
  312
  325
  339
  354
  370
  387
  404
  423
  442
  463
  484
  507
  531
  556
  583
  611
  640
  671
  704
  738
  774
  812
  852
  894
  937
  984
Issuance/(repurchase) of shares, $m
  0
  2,634
  2,791
  2,960
  3,136
  3,321
  3,513
  3,714
  3,924
  4,143
  4,372
  4,569
  4,820
  5,083
  5,358
  5,646
  5,948
  6,264
  6,596
  6,943
  7,307
  7,689
  8,089
  8,509
  8,949
  9,411
  9,896
  10,404
  10,938
  11,498
  12,085
Cash from financing (excl. dividends), $m  
  -280
  2,901
  3,066
  3,247
  3,435
  3,633
  3,838
  4,053
  4,278
  4,513
  4,759
  4,973
  5,243
  5,525
  5,821
  6,130
  6,455
  6,795
  7,152
  7,526
  7,918
  8,329
  8,760
  9,213
  9,687
  10,185
  10,708
  11,256
  11,832
  12,435
  13,069
Total cash flow (excl. dividends), $m
  6
  122
  117
  120
  123
  127
  130
  134
  138
  143
  147
  109
  114
  119
  125
  131
  137
  143
  150
  157
  165
  173
  181
  190
  199
  209
  219
  230
  241
  253
  265
Retained Cash Flow (-), $m
  329
  -2,634
  -2,791
  -2,960
  -3,136
  -3,321
  -3,513
  -3,714
  -3,924
  -4,143
  -4,372
  -4,569
  -4,820
  -5,083
  -5,358
  -5,646
  -5,948
  -6,264
  -6,596
  -6,943
  -7,307
  -7,689
  -8,089
  -8,509
  -8,949
  -9,411
  -9,896
  -10,404
  -10,938
  -11,498
  -12,085
Prev. year cash balance distribution, $m
 
  78
  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
 
  -2,434
  -2,674
  -2,840
  -3,013
  -3,194
  -3,382
  -3,579
  -3,785
  -4,000
  -4,225
  -4,460
  -4,706
  -4,964
  -5,233
  -5,516
  -5,811
  -6,121
  -6,446
  -6,786
  -7,142
  -7,516
  -7,908
  -8,319
  -8,750
  -9,203
  -9,677
  -10,175
  -10,697
  -11,245
  -11,820
Discount rate, %
 
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
 
  -2,320
  -2,418
  -2,425
  -2,416
  -2,392
  -2,351
  -2,293
  -2,220
  -2,133
  -2,031
  -1,917
  -1,792
  -1,658
  -1,519
  -1,375
  -1,231
  -1,088
  -949
  -816
  -692
  -577
  -474
  -382
  -302
  -235
  -179
  -133
  -97
  -69
  -48
Current shareholders' claim on cash, %
  100
  54.1
  29.3
  15.9
  8.6
  4.7
  2.5
  1.4
  0.7
  0.4
  0.2
  0.1
  0.1
  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
  0.0
  0.0
  0.0

Yamana Gold Inc. is a gold producer with gold production, gold development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina. The Company's segments include Chapada mine in Brazil; El Penon mine in Chile; Canadian Malartic mine in Canada; Gualcamayo mine in Argentina; Minera Florida mine in Chile; Jacobina mine in Brazil; Brio Gold Inc. (Brio Gold), and Corporate and other. The Company's development projects include Cerro Moro, Argentina; Agua Rica, Argentina, and Gualcamayo, Argentina. Its exploration projects include Chapada, Brazil; El Penon, Chile; Gualcamayo, Argentina; Minera Florida, Chile; Jacobina, Brazil; Cerro Moro, Argentina; Canadian Malartic Corporation, Canada; Monument Bay, Canada; Brio Gold Exploration; Pilar, Brazil; Fazenda Brasileiro, Brazil; RDM, Brazil, and C1 Santa Luz, Brazil.

FINANCIAL RATIOS  of  Yamana Gold (AUY)

Valuation Ratios
P/E Ratio -9.6
Price to Sales 1.7
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 4.4
Price to Free Cash Flow 17.4
Growth Rates
Sales Growth Rate 3.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 39.8%
Cap. Spend. - 3 Yr. Gr. Rate -12.4%
Financial Strength
Quick Ratio 2
Current Ratio 0.2
LT Debt to Equity 36.6%
Total Debt to Equity 38.7%
Interest Coverage -5
Management Effectiveness
Return On Assets -2.9%
Ret/ On Assets - 3 Yr. Avg. -10.6%
Return On Total Capital -4.7%
Ret/ On T. Cap. - 3 Yr. Avg. -15.9%
Return On Equity -6.6%
Return On Equity - 3 Yr. Avg. -21.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 42.4%
Gross Margin - 3 Yr. Avg. 42.2%
EBITDA Margin -3.2%
EBITDA Margin - 3 Yr. Avg. -35.4%
Operating Margin -26.5%
Oper. Margin - 3 Yr. Avg. -63.2%
Pre-Tax Margin -34.5%
Pre-Tax Margin - 3 Yr. Avg. -68.6%
Net Profit Margin -17.2%
Net Profit Margin - 3 Yr. Avg. -71.8%
Effective Tax Rate 52.8%
Eff/ Tax Rate - 3 Yr. Avg. 10.6%
Payout Ratio -9.1%

AUY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AUY stock intrinsic value calculation we used $1788 million for the last fiscal year's total revenue generated by Yamana Gold. The default revenue input number comes from 2016 income statement of Yamana Gold. 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 AUY stock valuation model: a) initial revenue growth rate of 6.3% 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 4.9%, whose default value for AUY is calculated based on our internal credit rating of Yamana Gold, 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 Yamana Gold.
    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 AUY stock the variable cost ratio is equal to 219.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AUY 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 5.3% for Yamana Gold.

Corporate tax rate of 27% is the nominal tax rate for Yamana Gold. 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 AUY 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 AUY are equal to 444.4%.

Life of production assets of 18.1 years is the average useful life of capital assets used in Yamana Gold 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 AUY is equal to -0.1%. 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 - $4512 million for Yamana Gold - 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 951.923 million for Yamana Gold 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 Yamana Gold at the current share price and the inputted number of shares is $3.0 billion.

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COMPANY NEWS

▶ Yamana Gold Tumbles   [Feb-18-18 06:29PM  GuruFocus.com]
▶ Yamana Gold Inc. to Host Earnings   [06:50AM  ACCESSWIRE]
▶ Yamana Gold Provides 2018-2020 Outlook   [Feb-15-18 07:11PM  GlobeNewswire]
▶ Yamana Gold Declares First Quarter Dividend   [07:02PM  GlobeNewswire]
▶ Yamana Gold Q4 Earnings Preview   [10:41AM  Benzinga]
▶ Macquarie Upgrades Yamana Gold   [Feb-13-18 10:02AM  GuruFocus.com]
▶ Two die in Yamana Gold mine accident in Argentina   [Feb-02-18 09:40AM  Reuters]
▶ Better Buy: Yamana Gold Inc. vs. Eldorado Gold   [Feb-01-18 09:04PM  Motley Fool]
▶ Could Yamana Gold Inc. Be a Millionaire-Maker Stock?   [Jan-30-18 08:17AM  Motley Fool]
▶ Rating for Yamana Gold Goes Up   [Jan-29-18 02:10PM  GuruFocus.com]
▶ Gold ETF Holdings Climb to a 5-Year High, Supporting Prices   [Jan-26-18 04:40PM  Market Realist]
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▶ Yamana Gold jumped 5%   [Jan-12-18 04:21PM  GuruFocus.com]
▶ Why Kinross Gold Trounced Peers and Soared 38.9% in 2017   [Jan-11-18 11:05AM  Motley Fool]
▶ Here's Why Yamana Gold Rose 22.8% in December   [Jan-08-18 07:18AM  Motley Fool]
▶ Gold Stocks: What to Watch in 2018   [Jan-05-18 08:02AM  Motley Fool]
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▶ How Are Miners Performing in December 2017?   [Dec-12-17 11:20AM  Market Realist]
▶ Miners Correlation with Gold   [Dec-06-17 10:30AM  Market Realist]
▶ The Technical Details for Mining Stocks in December 2017   [Dec-05-17 02:27PM  Market Realist]
▶ Which Intermediate Gold Miners Could Get Re-Rated in 2018?   [Dec-04-17 02:00PM  Market Realist]
▶ 3 Top Stocks Under $5   [07:04AM  Motley Fool]
▶ Yamana Gold to Issue a $300 Million Corporate Loan   [Dec-01-17 11:32AM  GuruFocus.com]
▶ Is Yamana Gold a Buy?   [Nov-28-17 09:01AM  Motley Fool]
▶ 3 Safe Stocks to Buy Right Now   [Nov-27-17 03:58PM  Motley Fool]
▶ 3 Top Gold Stocks to Consider Buying Now, and 1 to Avoid   [Nov-23-17 09:13AM  Motley Fool]
▶ The Directional Correlation Move of Mining Stocks in 2017   [Nov-21-17 11:05AM  Market Realist]
▶ 3 Gold Stocks With Earnings That Surprised the Market   [Nov-17-17 06:15AM  Motley Fool]
▶ Mining Stocks: Analyzing Correlation Trends   [Nov-16-17 07:33AM  Market Realist]
▶ Rising Yields Impact on Gold   [Nov-15-17 04:47PM  Market Realist]
▶ 8 Experts See Long-Term Glitter in Gold   [06:25AM  Investopedia]
▶ These Factors Are Playing on Gold and Precious Metals Today   [Nov-14-17 04:36PM  Market Realist]
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▶ Heres How US Economic Growth Could Impact Gold Prices   [Nov-08-17 03:31PM  Market Realist]
▶ Behind the Correlations of Key Miners Today   [Nov-03-17 03:40PM  Market Realist]
▶ 3 Ways Yamana Gold Glittered in Its Q3 Earnings Report   [Nov-02-17 12:32PM  Motley Fool]
▶ Gauging Global Risk against Gold   [Nov-01-17 01:27PM  Market Realist]
▶ How Did Mining Stocks Perform on October 27?   [Oct-31-17 07:37AM  Market Realist]
▶ How Gold Companies Have Performed in 2017   [Oct-30-17 11:40AM  Market Realist]
▶ What Mining Stocks Implied Volatility Tells Us   [Oct-27-17 07:38AM  Market Realist]
Financial statements of AUY
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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