DCF Studio

    ABX.TO · TOR · Basic Materials

    Barrick Mining Corporation

    Also onConsensus Drift

    Implied value per share

    CAD 62.97

    Market price

    CAD 60.24

    Implied upside

    +4.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.3982

    AdjustedReports in USD, trades in CAD. Modelled in USD, converted at the end.
    AdjustedCapital expenditure runs at 25.5% of revenue against depreciation of 15.5%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 62.97+4.5%
    Exit multiple
    CAD 102.48+70.1%
    Market price
    CAD 60.24

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 19.6bnUSD 22.6bnUSD 26.1bnUSD 30.1bnUSD 34.8bn+15.5%
    EBITUSD 6.4bnUSD 7.4bnUSD 8.6bnUSD 9.9bnUSD 11.5bn+15.5%
    NOPATUSD 4.7bnUSD 5.5bnUSD 6.3bnUSD 7.3bnUSD 8.4bn+15.5%
    Add depreciation & amortisationUSD 3.0bnUSD 3.5bnUSD 4.1bnUSD 4.7bnUSD 5.4bn+15.5%
    Less capital expenditureUSD -5.0bnUSD -5.8bnUSD -6.6bnUSD -7.7bnUSD -8.9bn+15.5%
    Less increase in working capitalUSD -657.1mUSD -758.8mUSD -876.1mUSD -1.0bnUSD -1.2bn+15.5%
    Free cashflow to firmUSD 2.1bnUSD 2.5bnUSD 2.8bnUSD 3.3bnUSD 3.8bn+15.5%
    Discount factor0.95720.87710.80370.73640.6747-
    Present valueUSD 2.0bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.6bn+5.8%
    Present Value Of The ForecastUSD 11.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta1.100Reported 1.150, pulled toward 1.0 (Blume)
    Cost of equity9.35%Risk-free + beta x equity risk premium
    Cost of debt6.84%Interest expense / average total debt
    Market capitalisationUSD 99.1bn95.0% of capital
    Total debtUSD 5.2bn5.0% of capital, book value as a proxy
    Tax rate26.5%Effective, capped at statutory
    WACC9.14%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 45.04

    85% of EV

    Forecast FCFF, final year
    USD 3.8bn
    Capex at depreciation, working capital in reinvestment
    USD 8.4bn
    Less reinvestment at g/ROIC (27.2% of NOPAT)
    USD -2.3bn
    Capitalised
    USD 6.1bn
    ROIC (reported)
    9.2%
    Terminal value, undiscounted
    USD 94.7bn
    Terminal value, discounted
    USD 63.9bn
    Enterprise value
    USD 75.4bn
    Less net debt
    USD -1.5bn
    Equity value
    USD 76.9bn

    Exit at 9.9x EBITDA

    Value per shareUSD 73.29

    91% of EV

    Terminal value, undiscounted
    USD 166.2bn
    Terminal value, discounted
    USD 112.1bn
    Enterprise value
    USD 123.6bn
    Less net debt
    USD -1.5bn
    Equity value
    USD 125.1bn

    Spread between methods: 48%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.14%62.4664.1666.1768.6371.70
    8.14%52.1852.9053.7154.6455.73
    9.14%44.6344.8345.0445.2445.46
    10.14%39.4439.6039.7639.9240.07
    11.14%35.2635.3935.5335.6735.81

    Outlined: this model. Green text: above today's price of 43.08. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year15.5%14.3%-1.2pp
    EBIT margin32.9%31.7%-1.2pp
    Discount rate9.1%9.5%+0.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.