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Discounted Cash Flow (DCF) Analysis Unlevered


New Gold Inc.

New Gold Inc. (NGD)

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 779.70725.98712.91522.78388.69604.48597.83591.26584.75578.32571.96
Revenue (%)
EBITDA 27.29-164.72-28.37201.11-19.40-940.70-177.92-175.96-174.02-172.11-170.22
EBITDA (%)
EBIT -151.34-382.81-269.770.84-179.81-1,181.89-397.20-392.83-388.51-384.24-380.01
EBIT (%)
Depreciation 178.63218.08241.39200.28160.41241.19219.29216.87214.49212.13209.79
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 414.41370.47335.50203.88216.19103.73250.97248.21245.48242.78240.11
Total Cash (%)
Account Receivables 19.3434.77109.0037.1227.0935.9147.9547.4246.9046.3845.87
Account Receivables (%)
Inventories 213.01254.02261.28253.70271.89156.68258.32255.48252.67249.89247.14
Inventories (%)
Accounts Payable 90.2196.99141.09169.22178.21130.87159.02157.27155.54153.83152.14
Accounts Payable (%)
Capital Expenditure -289.27-279.28-389.53-555.92-488.89-212.78-430.98-426.24-421.55-416.91-412.33
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 1.18
Diluted Shares Outstanding 578.70
Cost of Debt
Tax Rate 2.01
After-tax Cost of Debt -0.05
Risk-Free Rate
Market Risk Premium
Cost of Equity 6.01
Total Debt 780.50
Total Equity 682.87
Total Capital 1,463.37
Debt Weighting 53.34
Equity Weighting 46.66
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 779.70725.98712.91522.78388.69604.48597.83591.26584.75578.32571.96
EBITDA 27.29-164.72-28.37201.11-19.40-940.70-177.92-175.96-174.02-172.11-170.22
EBIT -151.34-382.81-269.770.84-179.81-1,181.89-397.20-392.83-388.51-384.24-380.01
Tax Rate 0.21%-16.51%34.67%23.08%43.93%2.01%14.57%14.57%14.57%14.57%14.57%
EBIAT -151.02-446.00-176.230.64-100.83-1,158.08-339.35-335.61-331.92-328.27-324.66
Depreciation 178.63218.08241.39200.28160.41241.19219.29216.87214.49212.13209.79
Accounts Receivable --15.44-74.2371.8910.03-8.81-12.040.530.520.520.51
Inventories --41.01-7.267.58-18.18115.20-101.642.842.812.782.75
Accounts Payable -6.7844.0928.148.99-47.3428.15-1.75-1.73-1.71-1.69
Capital Expenditure --9.98110.25166.39-67.03-276.11218.20-4.74-4.69-4.64-4.59
UFCF 27.61-287.57138.02474.91-6.62-1,133.9512.61-121.86-120.52-119.20-117.89
WACC
PV UFCF 11.96-109.65-102.87-96.51-90.54
SUM PV UFCF -843.87

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.42
Free cash flow (t + 1) -122.60
Terminal Value -8,633.83
Present Value of Terminal Value -6,631.15

Intrinsic Value

Enterprise Value -7,475.02
Net Debt 676.77
Equity Value -8,151.79
Shares Outstanding 578.70
Equity Value Per Share -14.09

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
7.42 (%) -4.86 Sell -5.23 Sell -5.74 Sell -6.48 Sell -7.66 Sell -9.81 Sell -15.00 Sell -44.85 Sell 28.25 Buy
6.92 (%) -4.66 Sell -4.98 Sell -5.41 Sell -6.01 Sell -6.92 Sell -8.44 Sell -11.56 Sell -21.45 Sell 215.87 Buy
6.42 (%) -4.50 Sell -4.77 Sell -5.13 Sell -5.62 Sell -6.34 Sell -7.47 Sell -9.54 Sell -14.53 Sell -43.26 Sell
5.92 (%) -4.35 Sell -4.59 Sell -4.90 Sell -5.31 Sell -5.88 Sell -6.76 Sell -8.22 Sell -11.22 Sell -20.74 Sell
5.42 (%) -4.22 Sell -4.43 Sell -4.69 Sell -5.04 Sell -5.51 Sell -6.20 Sell -7.29 Sell -9.29 Sell -14.09 Sell
4.92 (%) -4.11 Sell -4.29 Sell -4.52 Sell -4.81 Sell -5.21 Sell -5.76 Sell -6.60 Sell -8.02 Sell -10.90 Sell
4.42 (%) -4.00 Sell -4.16 Sell -4.36 Sell -4.62 Sell -4.95 Sell -5.41 Sell -6.07 Sell -7.12 Sell -9.04 Sell
3.92 (%) -3.91 Sell -4.05 Sell -4.23 Sell -4.45 Sell -4.73 Sell -5.11 Sell -5.65 Sell -6.46 Sell -7.82 Sell
3.42 (%) -3.82 Sell -3.95 Sell -4.11 Sell -4.30 Sell -4.55 Sell -4.87 Sell -5.31 Sell -5.95 Sell -6.96 Sell