Discounted Cash Flow (DCF) Analysis Levered

Sierra Metals Inc. (SMT.TO)

$0.4

+0.02 (+5.26%)

All numbers are in Millions, Currency in USD

Stock DCF: -0.61 | 0.4 | 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	205.12	232.37	229.04	246.89	272.01	292.29	314.09	337.50	362.67	389.71
Revenue (%)
Operating Cash Flow	54.47	61.90	39.59	66.98	72.25	72.59	78	83.81	90.06	96.78
Operating Cash Flow (%)
Capital Expenditure	-51.61	-49.32	-54.62	-35.97	-71.77	-65	-69.84	-75.05	-80.65	-86.66
Capital Expenditure (%)
Free Cash Flow	2.86	12.59	-15.03	31.01	0.47	7.59	8.16	8.76	9.42	10.12

Weighted Average Cost Of Capital

Share price	$ 0.4
Beta	1.699
Diluted Shares Outstanding	162.64
Cost of Debt
Tax Rate	1,013.62
After-tax Cost of Debt	-43.21%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.500
Total Debt	83.44
Total Equity	65.06
Total Capital	148.49
Debt Weighting	56.19
Equity Weighting	43.81
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	205.12	232.37	229.04	246.89	272.01	292.29	314.09	337.50	362.67	389.71
Operating Cash Flow	54.47	61.90	39.59	66.98	72.25	72.59	78	83.81	90.06	96.78
Capital Expenditure	-51.61	-49.32	-54.62	-35.97	-71.77	-65	-69.84	-75.05	-80.65	-86.66
Free Cash Flow	2.86	12.59	-15.03	31.01	0.47	7.59	8.16	8.76	9.42	10.12
WACC
PV LFCF						9.40	12.50	16.64	22.14	29.45
SUM PV LFCF										90.13

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	-19.24
Free cash flow (t + 1)	10.32
Terminal Value	-48.59
Present Value of Terminal Value	-141.44

Intrinsic Value

Enterprise Value	-51.32
Net Debt	48.51
Equity Value	-99.83
Shares Outstanding	162.64
Equity Value Per Share	-0.61