Discounted Cash Flow (DCF) Analysis Levered

Largo Inc. (LGO.TO)

$7.91

-0.42 (-5.04%)

All numbers are in Millions, Currency in USD

Stock DCF: 34.49 | 7.91 | undervalue

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	133.38	382.82	107.18	119.99	198.28	293.56	434.63	643.48	952.70	1,410.50
Revenue (%)
Operating Cash Flow	46.60	258.49	106.63	-59.51	39.78	101.22	149.86	221.88	328.50	486.35
Operating Cash Flow (%)
Capital Expenditure	-15.43	-13.94	-38.57	-18.11	-27.40	-47.03	-69.63	-103.10	-152.64	-225.99
Capital Expenditure (%)
Free Cash Flow	31.17	244.55	68.05	-77.61	12.38	54.19	80.23	118.78	175.86	260.37

Weighted Average Cost Of Capital

Share price	$ 7.91
Beta	1.647
Diluted Shares Outstanding	65.05
Cost of Debt
Tax Rate	28.93
After-tax Cost of Debt	3.97%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.408
Total Debt	17.55
Total Equity	514.51
Total Capital	532.06
Debt Weighting	3.30
Equity Weighting	96.70
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	133.38	382.82	107.18	119.99	198.28	293.56	434.63	643.48	952.70	1,410.50
Operating Cash Flow	46.60	258.49	106.63	-59.51	39.78	101.22	149.86	221.88	328.50	486.35
Capital Expenditure	-15.43	-13.94	-38.57	-18.11	-27.40	-47.03	-69.63	-103.10	-152.64	-225.99
Free Cash Flow	31.17	244.55	68.05	-77.61	12.38	54.19	80.23	118.78	175.86	260.37
WACC
PV LFCF						48.75	64.93	86.48	115.18	153.41
SUM PV LFCF										468.74

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	11.16
Free cash flow (t + 1)	265.57
Terminal Value	2,899.28
Present Value of Terminal Value	1,708.23

Intrinsic Value

Enterprise Value	2,176.97
Net Debt	-66.24
Equity Value	2,243.21
Shares Outstanding	65.05
Equity Value Per Share	34.49