Intrinsic value of Golden Star Resources - GSS

Previous Close

$0.84

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.84

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of GSS 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 0.4

 

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, %
  -13.33
  51.00
  46.40
  42.26
  38.53
  35.18
  32.16
  29.45
  27.00
  24.80
  22.82
  21.04
  19.44
  17.99
  16.69
  15.52
  14.47
  13.52
  12.67
  11.90
  11.21
  10.59
  10.03
  9.53
  9.08
  8.67
  8.30
  7.97
  7.67
  7.41
  7.17
Revenue, $m
  221
  334
  489
  695
  963
  1,302
  1,720
  2,227
  2,828
  3,529
  4,335
  5,247
  6,266
  7,394
  8,628
  9,968
  11,410
  12,953
  14,594
  16,332
  18,163
  20,087
  22,102
  24,209
  26,406
  28,695
  31,078
  33,555
  36,131
  38,807
  41,588
Variable operating expenses, $m
 
  436
  639
  909
  1,259
  1,702
  2,250
  2,913
  3,699
  4,616
  5,670
  6,863
  8,197
  9,671
  11,286
  13,038
  14,924
  16,943
  19,089
  21,362
  23,757
  26,274
  28,910
  31,665
  34,539
  37,534
  40,650
  43,891
  47,259
  50,760
  54,397
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
  263
  436
  639
  909
  1,259
  1,702
  2,250
  2,913
  3,699
  4,616
  5,670
  6,863
  8,197
  9,671
  11,286
  13,038
  14,924
  16,943
  19,089
  21,362
  23,757
  26,274
  28,910
  31,665
  34,539
  37,534
  40,650
  43,891
  47,259
  50,760
  54,397
Operating income, $m
  -42
  -103
  -150
  -214
  -297
  -401
  -530
  -686
  -871
  -1,087
  -1,335
  -1,616
  -1,930
  -2,277
  -2,657
  -3,070
  -3,514
  -3,990
  -4,495
  -5,030
  -5,594
  -6,187
  -6,808
  -7,456
  -8,133
  -8,838
  -9,572
  -10,335
  -11,128
  -11,953
  -12,809
EBITDA, $m
  -21
  -71
  -104
  -148
  -205
  -277
  -366
  -474
  -602
  -751
  -923
  -1,117
  -1,334
  -1,574
  -1,836
  -2,121
  -2,428
  -2,757
  -3,106
  -3,476
  -3,866
  -4,275
  -4,704
  -5,152
  -5,620
  -6,107
  -6,614
  -7,142
  -7,690
  -8,259
  -8,851
Interest expense (income), $m
  7
  6
  9
  18
  31
  47
  68
  93
  124
  161
  203
  252
  308
  370
  439
  514
  595
  683
  777
  877
  983
  1,094
  1,212
  1,334
  1,463
  1,596
  1,736
  1,881
  2,032
  2,189
  2,352
Earnings before tax, $m
  -42
  -109
  -159
  -232
  -327
  -448
  -597
  -779
  -995
  -1,248
  -1,538
  -1,868
  -2,238
  -2,647
  -3,096
  -3,584
  -4,110
  -4,673
  -5,272
  -5,907
  -6,577
  -7,281
  -8,019
  -8,791
  -9,596
  -10,435
  -11,308
  -12,216
  -13,160
  -14,141
  -15,161
Tax expense, $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
  0
Net income, $m
  -40
  -109
  -159
  -232
  -327
  -448
  -597
  -779
  -995
  -1,248
  -1,538
  -1,868
  -2,238
  -2,647
  -3,096
  -3,584
  -4,110
  -4,673
  -5,272
  -5,907
  -6,577
  -7,281
  -8,019
  -8,791
  -9,596
  -10,435
  -11,308
  -12,216
  -13,160
  -14,141
  -15,161

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  22
  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
  299
  418
  612
  871
  1,207
  1,631
  2,156
  2,790
  3,544
  4,423
  5,432
  6,575
  7,853
  9,266
  10,812
  12,491
  14,298
  16,232
  18,289
  20,466
  22,761
  25,172
  27,697
  30,337
  33,091
  35,959
  38,945
  42,049
  45,277
  48,630
  52,116
Adjusted assets (=assets-cash), $m
  277
  418
  612
  871
  1,207
  1,631
  2,156
  2,790
  3,544
  4,423
  5,432
  6,575
  7,853
  9,266
  10,812
  12,491
  14,298
  16,232
  18,289
  20,466
  22,761
  25,172
  27,697
  30,337
  33,091
  35,959
  38,945
  42,049
  45,277
  48,630
  52,116
Revenue / Adjusted assets
  0.798
  0.799
  0.799
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
  0.798
Average production assets, $m
  183
  276
  405
  575
  797
  1,078
  1,424
  1,844
  2,342
  2,922
  3,589
  4,344
  5,189
  6,122
  7,144
  8,253
  9,447
  10,725
  12,084
  13,523
  15,039
  16,632
  18,301
  20,045
  21,864
  23,760
  25,732
  27,784
  29,916
  32,132
  34,435
Working capital, $m
  -61
  -72
  -106
  -151
  -209
  -282
  -373
  -483
  -614
  -766
  -941
  -1,139
  -1,360
  -1,604
  -1,872
  -2,163
  -2,476
  -2,811
  -3,167
  -3,544
  -3,941
  -4,359
  -4,796
  -5,253
  -5,730
  -6,227
  -6,744
  -7,282
  -7,840
  -8,421
  -9,025
Total debt, $m
  135
  159
  334
  567
  869
  1,251
  1,723
  2,294
  2,972
  3,763
  4,672
  5,700
  6,850
  8,122
  9,514
  11,025
  12,651
  14,392
  16,243
  18,202
  20,268
  22,438
  24,711
  27,086
  29,564
  32,146
  34,833
  37,627
  40,532
  43,550
  46,687
Total liabilities, $m
  351
  376
  551
  784
  1,086
  1,468
  1,940
  2,511
  3,189
  3,980
  4,889
  5,917
  7,067
  8,339
  9,731
  11,242
  12,868
  14,609
  16,460
  18,419
  20,485
  22,655
  24,928
  27,303
  29,781
  32,363
  35,050
  37,844
  40,749
  43,767
  46,904
Total equity, $m
  -53
  42
  61
  87
  121
  163
  216
  279
  354
  442
  543
  657
  785
  927
  1,081
  1,249
  1,430
  1,623
  1,829
  2,047
  2,276
  2,517
  2,770
  3,034
  3,309
  3,596
  3,894
  4,205
  4,528
  4,863
  5,212
Total liabilities and equity, $m
  298
  418
  612
  871
  1,207
  1,631
  2,156
  2,790
  3,543
  4,422
  5,432
  6,574
  7,852
  9,266
  10,812
  12,491
  14,298
  16,232
  18,289
  20,466
  22,761
  25,172
  27,698
  30,337
  33,090
  35,959
  38,944
  42,049
  45,277
  48,630
  52,116
Debt-to-equity ratio
  -2.547
  3.810
  5.460
  6.510
  7.200
  7.670
  7.990
  8.220
  8.390
  8.510
  8.600
  8.670
  8.720
  8.770
  8.800
  8.830
  8.850
  8.870
  8.880
  8.890
  8.900
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
Adjusted equity ratio
  -0.271
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -40
  -109
  -159
  -232
  -327
  -448
  -597
  -779
  -995
  -1,248
  -1,538
  -1,868
  -2,238
  -2,647
  -3,096
  -3,584
  -4,110
  -4,673
  -5,272
  -5,907
  -6,577
  -7,281
  -8,019
  -8,791
  -9,596
  -10,435
  -11,308
  -12,216
  -13,160
  -14,141
  -15,161
Depreciation, amort., depletion, $m
  21
  32
  46
  66
  92
  124
  164
  212
  269
  336
  413
  499
  596
  704
  821
  949
  1,086
  1,233
  1,389
  1,554
  1,729
  1,912
  2,104
  2,304
  2,513
  2,731
  2,958
  3,194
  3,439
  3,693
  3,958
Funds from operations, $m
  35
  -77
  -113
  -166
  -236
  -324
  -434
  -567
  -726
  -912
  -1,126
  -1,369
  -1,642
  -1,944
  -2,275
  -2,635
  -3,024
  -3,440
  -3,883
  -4,353
  -4,849
  -5,370
  -5,916
  -6,487
  -7,083
  -7,704
  -8,350
  -9,023
  -9,722
  -10,448
  -11,203
Change in working capital, $m
  -18
  -24
  -34
  -45
  -58
  -74
  -91
  -110
  -130
  -152
  -175
  -198
  -221
  -245
  -268
  -291
  -313
  -335
  -356
  -377
  -397
  -417
  -437
  -457
  -477
  -497
  -517
  -538
  -559
  -581
  -604
Cash from operations, $m
  53
  -53
  -79
  -121
  -177
  -250
  -343
  -457
  -595
  -759
  -951
  -1,171
  -1,420
  -1,699
  -2,007
  -2,344
  -2,711
  -3,105
  -3,527
  -3,976
  -4,451
  -4,952
  -5,478
  -6,030
  -6,606
  -7,207
  -7,833
  -8,485
  -9,163
  -9,867
  -10,599
Maintenance CAPEX, $m
  0
  -21
  -32
  -46
  -66
  -92
  -124
  -164
  -212
  -269
  -336
  -413
  -499
  -596
  -704
  -821
  -949
  -1,086
  -1,233
  -1,389
  -1,554
  -1,729
  -1,912
  -2,104
  -2,304
  -2,513
  -2,731
  -2,958
  -3,194
  -3,439
  -3,693
New CAPEX, $m
  -84
  -93
  -128
  -171
  -222
  -280
  -347
  -419
  -498
  -581
  -667
  -755
  -844
  -934
  -1,022
  -1,109
  -1,194
  -1,278
  -1,359
  -1,439
  -1,516
  -1,593
  -1,669
  -1,744
  -1,819
  -1,895
  -1,973
  -2,051
  -2,132
  -2,216
  -2,303
Cash from investing activities, $m
  -86
  -114
  -160
  -217
  -288
  -372
  -471
  -583
  -710
  -850
  -1,003
  -1,168
  -1,343
  -1,530
  -1,726
  -1,930
  -2,143
  -2,364
  -2,592
  -2,828
  -3,070
  -3,322
  -3,581
  -3,848
  -4,123
  -4,408
  -4,704
  -5,009
  -5,326
  -5,655
  -5,996
Free cash flow, $m
  -33
  -167
  -239
  -339
  -465
  -623
  -813
  -1,040
  -1,305
  -1,609
  -1,954
  -2,339
  -2,764
  -3,229
  -3,733
  -4,275
  -4,854
  -5,469
  -6,119
  -6,803
  -7,522
  -8,274
  -9,059
  -9,877
  -10,729
  -11,616
  -12,537
  -13,494
  -14,489
  -15,522
  -16,596
Issuance/(repayment) of debt, $m
  -26
  46
  175
  233
  302
  382
  472
  571
  678
  791
  908
  1,029
  1,150
  1,272
  1,392
  1,511
  1,627
  1,740
  1,851
  1,959
  2,066
  2,170
  2,273
  2,376
  2,478
  2,582
  2,687
  2,794
  2,905
  3,018
  3,137
Issuance/(repurchase) of shares, $m
  45
  204
  178
  258
  361
  490
  650
  842
  1,070
  1,335
  1,639
  1,983
  2,366
  2,789
  3,251
  3,752
  4,290
  4,866
  5,478
  6,125
  6,807
  7,522
  8,272
  9,055
  9,871
  10,722
  11,606
  12,527
  13,483
  14,477
  15,509
Cash from financing (excl. dividends), $m  
  20
  250
  353
  491
  663
  872
  1,122
  1,413
  1,748
  2,126
  2,547
  3,012
  3,516
  4,061
  4,643
  5,263
  5,917
  6,606
  7,329
  8,084
  8,873
  9,692
  10,545
  11,431
  12,349
  13,304
  14,293
  15,321
  16,388
  17,495
  18,646
Total cash flow (excl. dividends), $m
  -13
  83
  114
  152
  197
  250
  309
  373
  443
  517
  594
  672
  752
  831
  910
  988
  1,063
  1,138
  1,210
  1,281
  1,350
  1,419
  1,486
  1,553
  1,620
  1,688
  1,757
  1,827
  1,899
  1,973
  2,051
Retained Cash Flow (-), $m
  -12
  -204
  -178
  -258
  -361
  -490
  -650
  -842
  -1,070
  -1,335
  -1,639
  -1,983
  -2,366
  -2,789
  -3,251
  -3,752
  -4,290
  -4,866
  -5,478
  -6,125
  -6,807
  -7,522
  -8,272
  -9,055
  -9,871
  -10,722
  -11,606
  -12,527
  -13,483
  -14,477
  -15,509
Prev. year cash balance distribution, $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 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
 
  -121
  -64
  -106
  -163
  -241
  -341
  -469
  -627
  -818
  -1,045
  -1,310
  -1,614
  -1,957
  -2,341
  -2,764
  -3,227
  -3,728
  -4,268
  -4,844
  -5,456
  -6,104
  -6,786
  -7,502
  -8,251
  -9,034
  -9,850
  -10,700
  -11,584
  -12,503
  -13,459
Discount rate, %
 
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
 
  -111
  -54
  -81
  -112
  -146
  -183
  -219
  -251
  -279
  -299
  -310
  -311
  -303
  -285
  -261
  -232
  -200
  -167
  -136
  -107
  -81
  -60
  -43
  -30
  -20
  -13
  -8
  -5
  -3
  -2
Current shareholders' claim on cash, %
  100
  50.0
  9.5
  1.8
  0.4
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Golden Star Resources Ltd. is a gold mining and exploration company. The Company's segments include Wassa, Bogoso/Prestea, Other and Corporate. The Company, through its subsidiary, Golden Star (Wassa) Limited, owns and operates the Wassa open-pit gold mine, the Wassa underground mine and a carbon-in-leach (CIL) processing plant (Wassa). The Wassa mine is located in the southwestern region of Ghana approximately 35 kilometers northeast of the town of Tarkwa. The Company, through its subsidiary Golden Star (Bogoso/Prestea) Limited, owns and operates the Bogoso gold mining and processing operations (Bogoso), the Prestea open-pit mining operations and the Prestea underground development project. The Prestea Underground is located 16 kilometers south of the existing Bogoso processing plant. The Company holds interests in various gold exploration projects in Ghana and other parts of West Africa, and in South America the Company holds and manages exploration properties in Brazil.

FINANCIAL RATIOS  of  Golden Star Resources (GSS)

Valuation Ratios
P/E Ratio -7
Price to Sales 1.3
Price to Book -5.3
Price to Tangible Book
Price to Cash Flow 5.3
Price to Free Cash Flow -9.1
Growth Rates
Sales Growth Rate -13.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 47.4%
Cap. Spend. - 3 Yr. Gr. Rate -4%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity -188.7%
Total Debt to Equity -254.7%
Interest Coverage -5
Management Effectiveness
Return On Assets -12.3%
Ret/ On Assets - 3 Yr. Avg. -20.3%
Return On Total Capital -55.9%
Ret/ On T. Cap. - 3 Yr. Avg. -64.1%
Return On Equity 67.8%
Return On Equity - 3 Yr. Avg. 26.8%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 13.1%
Gross Margin - 3 Yr. Avg. 0.5%
EBITDA Margin -6.3%
EBITDA Margin - 3 Yr. Avg. -12.2%
Operating Margin -19%
Oper. Margin - 3 Yr. Avg. -25.2%
Pre-Tax Margin -19%
Pre-Tax Margin - 3 Yr. Avg. -25%
Net Profit Margin -18.1%
Net Profit Margin - 3 Yr. Avg. -22.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0.4%
Payout Ratio 0%

GSS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GSS stock intrinsic value calculation we used $221 million for the last fiscal year's total revenue generated by Golden Star Resources. The default revenue input number comes from 2016 income statement of Golden Star Resources. 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 GSS stock valuation model: a) initial revenue growth rate of 51% 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 8.6%, whose default value for GSS is calculated based on our internal credit rating of Golden Star Resources, 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 Golden Star Resources.
    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 GSS stock the variable cost ratio is equal to 130.8%.

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 GSS 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 5.4% for Golden Star Resources.

Corporate tax rate of 27% is the nominal tax rate for Golden Star Resources. 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 GSS 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 GSS are equal to 82.8%.

Life of production assets of 8.7 years is the average useful life of capital assets used in Golden Star Resources 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 GSS is equal to -21.7%. 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 - $-53 million for Golden Star Resources - 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 529.093 million for Golden Star Resources 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 Golden Star Resources at the current share price and the inputted number of shares is $0.4 billion.

RELATED COMPANIES Price Int.Val. Rating
RGLD Royal Gold 84.66 8.69  str.sell

COMPANY NEWS

▶ Golden Star hosts an analyst and investor site visit   [Nov-10-17 07:02AM  PR Newswire]
▶ New Strong Buy Stocks for November 3rd   [Nov-03-17 08:01AM  Zacks]
▶ Golden Star posts 3Q profit   [05:48AM  Associated Press]
▶ Golden Star Reports Third Quarter 2017 Results   [Nov-01-17 04:35PM  PR Newswire]
▶ Top Ranked Value Stocks to Buy for October 17th   [Oct-17-17 10:07AM  Zacks]
▶ Golden Star Third Quarter 2017 Results Conference Call   [Oct-03-17 06:55AM  PR Newswire]
▶ Why Gold Remains Coveted for the Long Term   [Sep-22-17 02:07PM  Zacks]
▶ Gold Mining Stock Outlook - Sept. 2017   [Sep-21-17 04:36PM  Zacks]
▶ 5 Breakout Stocks Offering Astounding Returns   [Sep-08-17 09:20AM  Zacks]
▶ Golden Star posts 2Q profit   [Aug-01-17 11:48PM  Associated Press]
▶ Gold Mining Stock Outlook - May 2017   [May-25-17 04:54PM  Zacks]
▶ Golden Star posts 1Q profit   [May-04-17 05:02AM  Associated Press]
▶ Golden Star Reports First Quarter 2017 Results   [May-03-17 04:35PM  CNW Group]
▶ Golden Star Announces a Project Update   [Apr-03-17 06:55AM  PR Newswire]
▶ Golden Star Enters into Financing Facility   [Mar-30-17 06:55AM  PR Newswire]
▶ Golden Star Announces its Exploration Strategy for 2017   [Mar-23-17 06:55AM  PR Newswire]
▶ Top 5 Gold Penny Stocks for 2017   [Jan-24-17 10:36AM  at Investopedia]
▶ 3 Types of Gold Stocks You're Best Off Avoiding Right Now   [Jan-18-17 09:26AM  at Motley Fool]
▶ Is Seneca Foods Corp (SENEA) A Good Stock to Buy?   [Dec-15-16 01:30AM  at Insider Monkey]
Financial statements of GSS
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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