What is CXB.TO's Intrinsic value?

Calibre Mining Corp (CXB.TO) Intrinsic Value Analysis

Executive Summary

As of May 31, 2025, Calibre Mining Corp's estimated intrinsic value ranges from $1.47 to $6.47 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $6.47 +106.6%
Discounted Cash Flow (5Y) $3.00 -4.0%
Dividend Discount Model (Multi-Stage) $3.63 +16.0%
Dividend Discount Model (Stable) $1.47 -52.9%

Is Calibre Mining Corp (CXB.TO) undervalued or overvalued?

With the current market price at $3.13, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Calibre Mining Corp's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.1 1.24
Cost of equity 8.8% 11.7%
Cost of debt 5.0% 5.0%
Tax rate 36.5% 39.8%
Debt/Equity ratio 0.21 0.21
After-tax WACC 7.8% 10.2%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 9.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $586 (FY12-2024) to $2,151 (FY12-2034)
  • Net profit margin expansion from 6% to 21%
  • Capital expenditures maintained at approximately 36% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $2 $2,153M 83.0%
10-Year Growth $5 $4,303M 72.9%
5-Year EBITDA $3 $3,196M 88.5%
10-Year EBITDA $5 $4,502M 74.1%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 10.3%
  • Long-term growth rate: 4.0%
  • Fair value: $3.63 (16.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.7% (Low) to 8.8% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $1 to $2
  • Selected fair value: $1.47 (-52.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $2669M
Enterprise Value $3065M
Trailing P/E 33.89
Forward P/E 24.93
Trailing EV/EBITDA 5.80
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.21

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 33% $1.94
Discounted Cash Flow (5Y) 28% $0.75
Dividend Discount Model (Multi-Stage) 22% $0.73
Dividend Discount Model (Stable) 17% $0.22
Weighted Average 100% $4.04

Investment Conclusion

Based on our comprehensive valuation analysis, Calibre Mining Corp's weighted average intrinsic value is $4.04, which is approximately 29.1% above the current market price of $3.13.

Key investment considerations:

  • Strong projected earnings growth (6% to 21% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.21)

Given these factors, we believe Calibre Mining Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.