Intrinsic value of Sibanye-Stillwater ADR - SBGL

Previous Close

$2.18

  Intrinsic Value

$122.27

stock screener

  Rating & Target

str. buy

+999%

Previous close

$2.18

 
Intrinsic value

$122.27

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of SBGL 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, %
  37.51
  54.90
  49.91
  45.42
  41.38
  37.74
  34.47
  31.52
  28.87
  26.48
  24.33
  22.40
  20.66
  19.09
  17.68
  16.42
  15.27
  14.25
  13.32
  12.49
  11.74
  11.07
  10.46
  9.91
  9.42
  8.98
  8.58
  8.22
  7.90
  7.61
  7.35
Revenue, $m
  2,357
  3,522
  5,280
  7,679
  10,856
  14,953
  20,107
  26,444
  34,078
  43,102
  53,589
  65,593
  79,144
  94,255
  110,923
  129,131
  148,855
  170,062
  192,717
  216,787
  242,239
  269,047
  297,189
  326,653
  357,432
  389,531
  422,961
  457,746
  493,916
  531,510
  570,578
Variable operating expenses, $m
 
  2,117
  3,170
  4,606
  6,510
  8,964
  12,051
  15,847
  20,420
  25,825
  32,107
  39,291
  47,408
  56,460
  66,444
  77,351
  89,165
  101,869
  115,439
  129,857
  145,104
  161,162
  178,019
  195,668
  214,105
  233,333
  253,358
  274,194
  295,860
  318,380
  341,782
Fixed operating expenses, $m
 
  468
  478
  489
  500
  511
  522
  533
  545
  557
  569
  582
  595
  608
  621
  635
  649
  663
  678
  693
  708
  723
  739
  756
  772
  789
  806
  824
  842
  861
  880
Total operating expenses, $m
  1,893
  2,585
  3,648
  5,095
  7,010
  9,475
  12,573
  16,380
  20,965
  26,382
  32,676
  39,873
  48,003
  57,068
  67,065
  77,986
  89,814
  102,532
  116,117
  130,550
  145,812
  161,885
  178,758
  196,424
  214,877
  234,122
  254,164
  275,018
  296,702
  319,241
  342,662
Operating income, $m
  464
  938
  1,632
  2,583
  3,847
  5,479
  7,534
  10,064
  13,113
  16,719
  20,913
  25,720
  31,141
  37,188
  43,858
  51,146
  59,041
  67,530
  76,600
  86,237
  96,428
  107,162
  118,431
  130,229
  142,555
  155,409
  168,797
  182,728
  197,213
  212,270
  227,916
EBITDA, $m
  769
  1,218
  2,049
  3,186
  4,696
  6,646
  9,101
  12,123
  15,764
  20,071
  25,078
  30,810
  37,283
  44,502
  52,465
  61,166
  70,592
  80,727
  91,555
  103,060
  115,226
  128,040
  141,493
  155,577
  170,291
  185,636
  201,619
  218,249
  235,541
  253,515
  272,193
Interest expense (income), $m
  33
  95
  241
  447
  727
  1,099
  1,578
  2,181
  2,922
  3,815
  4,870
  6,097
  7,501
  9,086
  10,853
  12,802
  14,932
  17,239
  19,719
  22,369
  25,184
  28,161
  31,296
  34,587
  38,033
  41,633
  45,387
  49,297
  53,365
  57,596
  61,992
Earnings before tax, $m
  341
  842
  1,391
  2,137
  3,119
  4,380
  5,956
  7,883
  10,191
  12,905
  16,042
  19,623
  23,641
  28,102
  33,005
  38,343
  44,109
  50,291
  56,881
  63,868
  71,244
  79,001
  87,135
  95,642
  104,521
  113,776
  123,410
  133,430
  143,848
  154,674
  165,924
Tax expense, $m
  94
  227
  376
  577
  842
  1,183
  1,608
  2,128
  2,752
  3,484
  4,331
  5,298
  6,383
  7,588
  8,911
  10,353
  11,909
  13,579
  15,358
  17,244
  19,236
  21,330
  23,526
  25,823
  28,221
  30,719
  33,321
  36,026
  38,839
  41,762
  44,799
Net income, $m
  279
  615
  1,015
  1,560
  2,277
  3,197
  4,348
  5,755
  7,439
  9,420
  11,711
  14,325
  17,258
  20,514
  24,094
  27,991
  32,199
  36,713
  41,523
  46,624
  52,008
  57,671
  63,609
  69,819
  76,301
  83,056
  90,089
  97,404
  105,009
  112,912
  121,124

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  73
  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
  3,148
  4,703
  7,050
  10,252
  14,494
  19,964
  26,845
  35,306
  45,498
  57,546
  71,548
  87,574
  105,666
  125,841
  148,095
  172,405
  198,738
  227,051
  257,299
  289,435
  323,417
  359,208
  396,782
  436,119
  477,212
  520,068
  564,701
  611,143
  659,433
  709,626
  761,786
Adjusted assets (=assets-cash), $m
  3,075
  4,703
  7,050
  10,252
  14,494
  19,964
  26,845
  35,306
  45,498
  57,546
  71,548
  87,574
  105,666
  125,841
  148,095
  172,405
  198,738
  227,051
  257,299
  289,435
  323,417
  359,208
  396,782
  436,119
  477,212
  520,068
  564,701
  611,143
  659,433
  709,626
  761,786
Revenue / Adjusted assets
  0.767
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
  0.749
Average production assets, $m
  1,863
  2,733
  4,098
  5,959
  8,424
  11,604
  15,603
  20,521
  26,444
  33,447
  41,585
  50,900
  61,416
  73,142
  86,076
  100,206
  115,511
  131,968
  149,548
  168,227
  187,978
  208,781
  230,619
  253,483
  277,367
  302,276
  328,218
  355,211
  383,279
  412,452
  442,768
Working capital, $m
  110
  -690
  -1,035
  -1,505
  -2,128
  -2,931
  -3,941
  -5,183
  -6,679
  -8,448
  -10,504
  -12,856
  -15,512
  -18,474
  -21,741
  -25,310
  -29,176
  -33,332
  -37,773
  -42,490
  -47,479
  -52,733
  -58,249
  -64,024
  -70,057
  -76,348
  -82,900
  -89,718
  -96,807
  -104,176
  -111,833
Total debt, $m
  677
  1,652
  3,060
  4,981
  7,527
  10,809
  14,937
  20,014
  26,129
  33,358
  41,759
  51,374
  62,230
  74,335
  87,687
  102,273
  118,073
  135,061
  153,210
  172,491
  192,880
  214,355
  236,899
  260,501
  285,157
  310,871
  337,651
  365,516
  394,490
  424,606
  455,902
Total liabilities, $m
  1,889
  2,822
  4,230
  6,151
  8,696
  11,978
  16,107
  21,184
  27,299
  34,527
  42,929
  52,544
  63,400
  75,505
  88,857
  103,443
  119,243
  136,231
  154,379
  173,661
  194,050
  215,525
  238,069
  261,671
  286,327
  312,041
  338,821
  366,686
  395,660
  425,776
  457,072
Total equity, $m
  1,258
  1,881
  2,820
  4,101
  5,798
  7,986
  10,738
  14,122
  18,199
  23,018
  28,619
  35,030
  42,266
  50,336
  59,238
  68,962
  79,495
  90,821
  102,920
  115,774
  129,367
  143,683
  158,713
  174,447
  190,885
  208,027
  225,881
  244,457
  263,773
  283,850
  304,714
Total liabilities and equity, $m
  3,147
  4,703
  7,050
  10,252
  14,494
  19,964
  26,845
  35,306
  45,498
  57,545
  71,548
  87,574
  105,666
  125,841
  148,095
  172,405
  198,738
  227,052
  257,299
  289,435
  323,417
  359,208
  396,782
  436,118
  477,212
  520,068
  564,702
  611,143
  659,433
  709,626
  761,786
Debt-to-equity ratio
  0.538
  0.880
  1.090
  1.210
  1.300
  1.350
  1.390
  1.420
  1.440
  1.450
  1.460
  1.470
  1.470
  1.480
  1.480
  1.480
  1.490
  1.490
  1.490
  1.490
  1.490
  1.490
  1.490
  1.490
  1.490
  1.490
  1.490
  1.500
  1.500
  1.500
  1.500
Adjusted equity ratio
  0.385
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  279
  615
  1,015
  1,560
  2,277
  3,197
  4,348
  5,755
  7,439
  9,420
  11,711
  14,325
  17,258
  20,514
  24,094
  27,991
  32,199
  36,713
  41,523
  46,624
  52,008
  57,671
  63,609
  69,819
  76,301
  83,056
  90,089
  97,404
  105,009
  112,912
  121,124
Depreciation, amort., depletion, $m
  305
  280
  417
  603
  849
  1,167
  1,567
  2,059
  2,651
  3,351
  4,165
  5,090
  6,142
  7,314
  8,608
  10,021
  11,551
  13,197
  14,955
  16,823
  18,798
  20,878
  23,062
  25,348
  27,737
  30,228
  32,822
  35,521
  38,328
  41,245
  44,277
Funds from operations, $m
  12
  895
  1,432
  2,162
  3,126
  4,364
  5,915
  7,813
  10,091
  12,772
  15,876
  19,415
  23,399
  27,829
  32,701
  38,011
  43,751
  49,909
  56,478
  63,447
  70,806
  78,549
  86,670
  95,167
  104,037
  113,284
  122,911
  132,925
  143,337
  154,157
  165,401
Change in working capital, $m
  -320
  -245
  -345
  -470
  -623
  -803
  -1,010
  -1,242
  -1,496
  -1,769
  -2,056
  -2,353
  -2,656
  -2,962
  -3,267
  -3,569
  -3,866
  -4,157
  -4,440
  -4,718
  -4,989
  -5,254
  -5,516
  -5,775
  -6,033
  -6,291
  -6,552
  -6,818
  -7,089
  -7,369
  -7,657
Cash from operations, $m
  332
  1,140
  1,777
  2,633
  3,749
  5,167
  6,925
  9,056
  11,587
  14,541
  17,932
  21,768
  26,055
  30,790
  35,968
  41,580
  47,616
  54,066
  60,919
  68,164
  75,795
  83,803
  92,186
  100,942
  110,070
  119,575
  129,463
  139,743
  150,426
  161,526
  173,059
Maintenance CAPEX, $m
  0
  -176
  -273
  -410
  -596
  -842
  -1,160
  -1,560
  -2,052
  -2,644
  -3,345
  -4,159
  -5,090
  -6,142
  -7,314
  -8,608
  -10,021
  -11,551
  -13,197
  -14,955
  -16,823
  -18,798
  -20,878
  -23,062
  -25,348
  -27,737
  -30,228
  -32,822
  -35,521
  -38,328
  -41,245
New CAPEX, $m
  -313
  -969
  -1,364
  -1,861
  -2,466
  -3,179
  -3,999
  -4,918
  -5,924
  -7,003
  -8,138
  -9,315
  -10,516
  -11,726
  -12,934
  -14,130
  -15,305
  -16,456
  -17,581
  -18,678
  -19,751
  -20,803
  -21,838
  -22,864
  -23,885
  -24,909
  -25,942
  -26,993
  -28,068
  -29,173
  -30,317
Cash from investing activities, $m
  -712
  -1,145
  -1,637
  -2,271
  -3,062
  -4,021
  -5,159
  -6,478
  -7,976
  -9,647
  -11,483
  -13,474
  -15,606
  -17,868
  -20,248
  -22,738
  -25,326
  -28,007
  -30,778
  -33,633
  -36,574
  -39,601
  -42,716
  -45,926
  -49,233
  -52,646
  -56,170
  -59,815
  -63,589
  -67,501
  -71,562
Free cash flow, $m
  -380
  -6
  139
  362
  688
  1,146
  1,765
  2,577
  3,611
  4,894
  6,449
  8,295
  10,450
  12,923
  15,720
  18,843
  22,290
  26,058
  30,141
  34,531
  39,221
  44,203
  49,470
  55,016
  60,837
  66,930
  73,294
  79,928
  86,837
  94,025
  101,497
Issuance/(repayment) of debt, $m
  411
  999
  1,408
  1,921
  2,545
  3,282
  4,128
  5,077
  6,115
  7,229
  8,401
  9,616
  10,855
  12,105
  13,352
  14,586
  15,800
  16,988
  18,149
  19,282
  20,389
  21,475
  22,544
  23,602
  24,656
  25,713
  26,780
  27,865
  28,974
  30,116
  31,296
Issuance/(repurchase) of shares, $m
  0
  52
  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 financing (excl. dividends), $m  
  411
  1,051
  1,408
  1,921
  2,545
  3,282
  4,128
  5,077
  6,115
  7,229
  8,401
  9,616
  10,855
  12,105
  13,352
  14,586
  15,800
  16,988
  18,149
  19,282
  20,389
  21,475
  22,544
  23,602
  24,656
  25,713
  26,780
  27,865
  28,974
  30,116
  31,296
Total cash flow (excl. dividends), $m
  19
  1,045
  1,547
  2,283
  3,233
  4,428
  5,894
  7,654
  9,726
  12,122
  14,850
  17,910
  21,305
  25,028
  29,072
  33,429
  38,090
  43,046
  48,290
  53,813
  59,610
  65,678
  72,014
  78,618
  85,493
  92,643
  100,074
  107,793
  115,812
  124,140
  132,793
Retained Cash Flow (-), $m
  -136
  -667
  -939
  -1,281
  -1,697
  -2,188
  -2,752
  -3,384
  -4,077
  -4,819
  -5,601
  -6,410
  -7,237
  -8,070
  -8,901
  -9,724
  -10,533
  -11,325
  -12,099
  -12,854
  -13,593
  -14,317
  -15,029
  -15,735
  -16,437
  -17,142
  -17,854
  -18,577
  -19,316
  -20,077
  -20,864
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
 
  -111
  -173
  -259
  -376
  -532
  -733
  -985
  -1,296
  -1,670
  -2,112
  -2,626
  -3,214
  -3,878
  -4,618
  -5,435
  -6,327
  -7,294
  -8,333
  -9,443
  -10,623
  -11,870
  -13,183
  -14,562
  -16,006
  -17,514
  -19,087
  -20,725
  -22,430
  -24,202
  -26,044
Cash available for distribution, $m
 
  378
  608
  1,002
  1,536
  2,240
  3,142
  4,270
  5,649
  7,303
  9,249
  11,500
  14,068
  16,958
  20,170
  23,705
  27,557
  31,721
  36,191
  40,958
  46,017
  51,361
  56,984
  62,884
  69,056
  75,501
  82,220
  89,217
  96,495
  104,063
  111,929
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
 
  363
  557
  872
  1,265
  1,736
  2,280
  2,884
  3,531
  4,195
  4,849
  5,461
  6,003
  6,448
  6,772
  6,959
  7,003
  6,902
  6,665
  6,306
  5,847
  5,312
  4,728
  4,121
  3,517
  2,937
  2,399
  1,915
  1,493
  1,136
  843
Current shareholders' claim on cash, %
  100
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5

Sibanye Gold Limited is an independent, global precious metal mining company. The Company is engaged in producing a mix of metals that includes gold and the platinum group metals (PGMs). Its projects are grouped by two regions: the Southern Africa region and the Americas region. Its products include gold, platinum group metals and by-products. The Company’s gold project in the Southern Africa region includes Beatrix, Cooke, Driefontein, and Kloof. Its PGM projects include Kroondal, Rustenburg operations, Mimosa, and Platinum Mile. Its other projects in the Southern Africa region include Burnstone, Kloof Decline, Driefontein decline, The West Rand Tailings Retreatment Project (WRTRP) and The Southern Free State (SOFS) project. The Company’s PGM project in the Americas region includes East Boulder, Stillwater, and Columbus Metallurgical Complex. Its other projects in the Americas region include Blitz, Altar and Marathon.

FINANCIAL RATIOS  of  Sibanye-Stillwater ADR (SBGL)

Valuation Ratios
P/E Ratio 11.2
Price to Sales 1.3
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 9.4
Price to Free Cash Flow 164.2
Growth Rates
Sales Growth Rate 37.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 24.2%
Cap. Spend. - 3 Yr. Gr. Rate 7.4%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 49.3%
Total Debt to Equity 53.8%
Interest Coverage 11
Management Effectiveness
Return On Assets 11.5%
Ret/ On Assets - 3 Yr. Avg. 7.2%
Return On Total Capital 16.7%
Ret/ On T. Cap. - 3 Yr. Avg. 10.4%
Return On Equity 23.4%
Return On Equity - 3 Yr. Avg. 13.7%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 20.8%
Gross Margin - 3 Yr. Avg. 17.3%
EBITDA Margin 28.8%
EBITDA Margin - 3 Yr. Avg. 20.5%
Operating Margin 19.7%
Oper. Margin - 3 Yr. Avg. 14.3%
Pre-Tax Margin 14.5%
Pre-Tax Margin - 3 Yr. Avg. 9.7%
Net Profit Margin 11.8%
Net Profit Margin - 3 Yr. Avg. 7.4%
Effective Tax Rate 27.6%
Eff/ Tax Rate - 3 Yr. Avg. 34.5%
Payout Ratio 0%

SBGL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SBGL stock intrinsic value calculation we used $2274 million for the last fiscal year's total revenue generated by Sibanye-Stillwater ADR. The default revenue input number comes from 2016 income statement of Sibanye-Stillwater ADR. 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 SBGL stock valuation model: a) initial revenue growth rate of 54.9% 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 SBGL is calculated based on our internal credit rating of Sibanye-Stillwater ADR, 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 Sibanye-Stillwater ADR.
    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 SBGL stock the variable cost ratio is equal to 60.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $458 million in the base year in the intrinsic value calculation for SBGL 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 14.6% for Sibanye-Stillwater ADR.

Corporate tax rate of 27% is the nominal tax rate for Sibanye-Stillwater ADR. 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 SBGL stock is equal to -4.9%.

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 SBGL are equal to 77.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Sibanye-Stillwater ADR 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 SBGL is equal to -19.6%. 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 - $1214 million for Sibanye-Stillwater ADR - 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 934 million for Sibanye-Stillwater ADR 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 Sibanye-Stillwater ADR at the current share price and the inputted number of shares is $2.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ [$$] Sibanye-Stillwater pledges to improve mine safety   [Jul-08-18 11:05PM  Financial Times]
▶ 3 Beaten-Up Gold Stocks: Are They Bargains?   [Jun-30-18 07:15AM  Motley Fool]
▶ Top 3 Platinum Stocks for 2018   [06:00AM  Investopedia]
▶ [$$] Lonmin insists Sibanye takeover remains on track   [May-13-18 11:50PM  Financial Times]
▶ 13 Biggest Gold Mining Companies in the World   [Apr-09-18 08:45AM  Insider Monkey]
▶ [$$] South Africas Sibanye falls 5% after dividend cut   [Feb-22-18 03:18AM  Financial Times]
▶ [$$] South Africa miner Sibanye warns of $333m loss   [Feb-21-18 04:26AM  Financial Times]
▶ Sibanye Gold Reports 10% Decline in Reserves   [Feb-20-18 11:07AM  GuruFocus.com]
▶ 900 workers trapped in South African gold mine after outage   [Feb-01-18 10:26AM  Associated Press]
▶ A Brief Correlation Analysis of Miners in the New Year   [Jan-24-18 09:37AM  Market Realist]
▶ What Led to the Decline in Gold and Silver?   [Jan-22-18 01:29PM  Market Realist]
▶ Gold and Silver Retreat, Taking Down Miners and Funds   [Jan-11-18 07:36AM  Market Realist]
Financial statements of SBGL
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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