Discounted Cash Flow (DCF) Analysis Levered

Ero Copper Corp. (ERO.TO)

$13.02

-0.35 (-2.62%)

All numbers are in Millions, Currency in USD

Stock DCF: 10.02 | 13.02 | overvalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	115.44	233.11	284.84	324.08	482.64	708.04	1,038.73	1,523.85	2,235.54	3,279.61
Revenue (%)
Operating Cash Flow	21.24	82.94	127.83	162.84	364.59	318.11	466.68	684.64	1,004.39	1,473.48
Operating Cash Flow (%)
Capital Expenditure	-58.19	-101.17	-106.27	-117.81	-181.83	-290.50	-426.17	-625.21	-917.20	-1,345.56
Capital Expenditure (%)
Free Cash Flow	-36.95	-18.23	21.56	45.03	182.76	27.62	40.51	59.43	87.19	127.92

Weighted Average Cost Of Capital

Share price	$ 13.02
Beta	2.354
Diluted Shares Outstanding	86.37
Cost of Debt
Tax Rate	15.14
After-tax Cost of Debt	7.15%
Risk-Free Rate
Market Risk Premium
Cost of Equity	14.101
Total Debt	66.36
Total Equity	1,124.52
Total Capital	1,190.88
Debt Weighting	5.57
Equity Weighting	94.43
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	115.44	233.11	284.84	324.08	482.64	708.04	1,038.73	1,523.85	2,235.54	3,279.61
Operating Cash Flow	21.24	82.94	127.83	162.84	364.59	318.11	466.68	684.64	1,004.39	1,473.48
Capital Expenditure	-58.19	-101.17	-106.27	-117.81	-181.83	-290.50	-426.17	-625.21	-917.20	-1,345.56
Free Cash Flow	-36.95	-18.23	21.56	45.03	182.76	27.62	40.51	59.43	87.19	127.92
WACC
PV LFCF						18.78	24.23	31.26	40.34	52.04
SUM PV LFCF										215.48

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	13.71
Free cash flow (t + 1)	130.47
Terminal Value	1,114.20
Present Value of Terminal Value	586.10

Intrinsic Value

Enterprise Value	801.58
Net Debt	-63.77
Equity Value	865.35
Shares Outstanding	86.37
Equity Value Per Share	10.02