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Discounted Cash Flow (DCF) Analysis Unlevered


Kinross Gold Corporation

Kinross Gold Corporation (KGC)

Basic Materials

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 3,779.503,466.183,051.973,471.623,302.553,212.063,121.483,033.452,947.912,864.782,783.99
Revenue (%)
EBITDA -2,797.96-183.36141.00930.051,356.36986.74611.19593.95577.20560.92545.11
EBITDA (%)
EBIT -3,626.81-1,058.22-756.5874.99536.99214.24-188.85-183.52-178.35-173.32-168.43
EBIT (%)
Depreciation 828.84874.86897.58855.06819.36772.50800.04777.47755.55734.24713.54
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 793.321,024.951,054.46838.741,037.99361.68817.52794.46772.06750.29729.13
Total Cash (%)
Account Receivables 208.25170.54108.34127.4191.15101.50112.69109.51106.42103.42100.50
Account Receivables (%)
Inventories 1,322.831,276.591,005.32986.631,094.461,051.951,024.47995.58967.50940.22913.71
Inventories (%)
Accounts Payable 544.63421.83379.67464.85482.50465.75418.90407.09395.61384.45373.61
Accounts Payable (%)
Capital Expenditure -1,256.31-601.38-606.73-624.54-889.05-1,036.85-714.51-694.36-674.78-655.75-637.26
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 4.77
Diluted Shares Outstanding 1,249.50
Cost of Debt
Tax Rate 122.61
After-tax Cost of Debt -6.08
Risk-Free Rate
Market Risk Premium
Cost of Equity 1.71
Total Debt 1,735.00
Total Equity 5,960.11
Total Capital 7,695.11
Debt Weighting 22.55
Equity Weighting 77.45
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 3,779.503,466.183,051.973,471.623,302.553,212.063,121.483,033.452,947.912,864.782,783.99
EBITDA -2,797.96-183.36141.00930.051,356.36986.74611.19593.95577.20560.92545.11
EBIT -3,626.81-1,058.22-756.5874.99536.99214.24-188.85-183.52-178.35-173.32-168.43
Tax Rate -1.97%-9.64%-16.62%-83.36%-5.54%122.61%0.91%0.91%0.91%0.91%0.91%
EBIAT -3,698.37-1,160.23-882.33137.50566.73-48.45-187.12-181.85-176.72-171.73-166.89
Depreciation 828.84874.86897.58855.06819.36772.50800.04777.47755.55734.24713.54
Accounts Receivable -37.7162.19-19.0636.26-10.35-11.183.183.093.002.92
Inventories -46.23271.2718.69-107.8342.5227.4828.8928.0827.2826.51
Accounts Payable --122.79-42.1785.1817.65-16.75-46.85-11.81-11.48-11.16-10.84
Capital Expenditure --654.925.3517.81264.50147.81-322.35-20.15-19.58-19.03-18.49
UFCF -2,869.52-979.13311.911,095.181,596.67887.27260.02595.73578.93562.61546.74
WACC
PV UFCF 257.26583.19560.74539.16518.41
SUM PV UFCF 2,206.93

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 1.07
Free cash flow (t + 1) 568.61
Terminal Value -19,406.55
Present Value of Terminal Value -18,400.82

Intrinsic Value

Enterprise Value -16,193.88
Net Debt 1,373.32
Equity Value -17,567.20
Shares Outstanding 1,249.50
Equity Value Per Share -14.06

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
3.07 (%) 15.00 Buy 22.15 Buy 42.66 Buy 649.11 Buy -48.63 Sell -23.33 Sell -15.29 Sell -11.35 Sell -9.00 Sell
2.57 (%) 12.69 Buy 17.54 Buy 28.58 Buy 78.32 Buy -103.31 Sell -30.91 Sell -18.10 Sell -12.76 Sell -9.83 Sell
2.07 (%) 10.95 Buy 14.44 Buy 21.31 Buy 41.01 Buy 623.58 Buy -46.69 Sell -22.38 Sell -14.66 Sell -10.87 Sell
1.57 (%) 9.60 Buy 12.22 Buy 16.89 Buy 27.49 Buy 75.28 Buy -99.23 Sell -29.67 Sell -17.36 Sell -12.23 Sell
1.07 (%) 8.52 Buy 10.56 Buy 13.91 Buy 20.51 Buy 39.44 Buy 599.30 Buy -44.84 Sell -21.47 Sell -14.06 Sell
0.57 (%) 7.64 Buy 9.26 Buy 11.78 Buy 16.26 Buy 26.45 Buy 72.39 Buy -95.35 Sell -28.49 Sell -16.66 Sell
0.07 (%) 6.91 Buy 8.22 Buy 10.18 Buy 13.40 Buy 19.75 Buy 37.95 Buy 576.18 Buy -43.08 Sell -20.62 Sell
-0.43 (%) 6.30 Buy 7.38 Buy 8.93 Buy 11.36 Buy 15.66 Buy 25.46 Buy 69.64 Buy -91.66 Sell -27.36 Sell
-0.93 (%) 5.77 Buy 6.68 Buy 7.94 Buy 9.82 Buy 12.92 Buy 19.02 Buy 36.53 Buy 554.18 Buy -41.40 Sell