DCF Studio

    RSG.AX · ASX · Basic Materials

    Resolute Mining Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 1.22

    Market price

    AUD 1.35

    Implied upside

    -10.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · USD model at 1.4042

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedReports in USD, trades in AUD. Modelled in USD, converted at the end.

    Value Per Share

    Perpetuity growth
    AUD 1.22-10.0%
    Exit multiple
    AUD 1.81+33.8%
    Market price
    AUD 1.35

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0m162m325mFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 951.8mUSD 1.0bnUSD 1.2bnUSD 1.3bnUSD 1.4bn+10.0%
    EBITUSD 173.4mUSD 190.7mUSD 209.6mUSD 230.5mUSD 253.5m+10.0%
    NOPATUSD 121.4mUSD 133.5mUSD 146.7mUSD 161.4mUSD 177.4m+10.0%
    Add depreciation & amortisationUSD 133.5mUSD 146.8mUSD 161.4mUSD 177.5mUSD 195.1m+10.0%
    Less capital expenditureUSD -118.7mUSD -130.5mUSD -143.5mUSD -157.8mUSD -173.5m+10.0%
    Less increase in working capitalUSD 86.2mUSD 94.8mUSD 104.2mUSD 114.6mUSD 126.0m-10.0%
    Free cashflow to firmUSD 222.3mUSD 244.5mUSD 268.8mUSD 295.6mUSD 325.0m+10.0%
    Discount factor0.94300.83850.74560.66310.5896-
    Present valueUSD 209.7mUSD 205.0mUSD 200.4mUSD 196.0mUSD 191.6m-2.2%
    Present Value Of The ForecastUSD 1.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta1.246Reported 1.367, pulled toward 1.0 (Blume)
    Cost of equity12.82%Risk-free + beta x equity risk premium
    Cost of debt10.27%Interest expense / average total debt
    Market capitalisationUSD 2.9bn93.5% of capital
    Total debtUSD 201.5m6.5% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC12.46%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 0.87

    47% of EV

    Forecast FCFF, final year
    USD 325.0m
    Capex at depreciation, working capital in reinvestment
    USD 185.6m
    Less reinvestment at g/ROIC (20.1% of NOPAT)
    USD -37.2m
    Capitalised
    USD 148.3m
    ROIC (WACC floor)
    12.5%
    Terminal value, undiscounted
    USD 1.5bn
    Terminal value, discounted
    USD 900.2m
    Enterprise value
    USD 1.9bn
    Less net debt
    USD 37.4m
    Equity value
    USD 1.9bn

    Exit at 6.8x EBITDA

    Value per shareUSD 1.29

    64% of EV

    Terminal value, undiscounted
    USD 3.1bn
    Terminal value, discounted
    USD 1.8bn
    Enterprise value
    USD 2.8bn
    Less net debt
    USD 37.4m
    Equity value
    USD 2.8bn

    Spread between methods: 39%.

    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%
    10.46%1.021.021.031.041.05
    11.46%0.930.930.940.940.94
    12.46%0.860.870.870.870.87
    13.46%0.810.810.810.810.82
    14.46%0.760.760.760.770.77

    Outlined: this model. Green text: above today's price of 0.96. 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 year10.0%11.9%+1.9pp
    EBIT margin18.2%20.9%+2.7pp
    Discount rate12.5%11.1%-1.3pp
    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.