Great Panther Mining Ltd (GPR.TO) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Great Panther Mining Ltd's estimated intrinsic value ranges from $2.55 to $5.71 per share, depending on the valuation methodology applied.

Valuation Method	Fair Value (USD)	Implied Upside/Downside
Discounted Cash Flow (10Y)	$5.71	+423.6%
Earnings Power Value	$2.55	+134.2%

Is Great Panther Mining Ltd (GPR.TO) undervalued or overvalued?

With the current market price at $1.09, 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 Great Panther Mining Ltd's intrinsic value, including:

1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
2. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

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	3.6%	4.1%
Equity market risk premium	5.5%	6.5%
Adjusted beta	0.62	1.52
Cost of equity	7.0%	14.4%
Cost of debt	5.2%	7.0%
Tax rate	0.7%	19.0%
Debt/Equity ratio	1.52	1.52
After-tax WACC	5.9%	9.1%

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: 10-year DCF
• Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
• Discount Rate: 7.5% (range: 0.0% - 9.3%)

Key Projections:

• Revenue growth from $186 (FY12-2021) to $485 (FY12-2031)
• Net profit margin expansion from -23% to 4%
• Capital expenditures maintained at approximately 11% of revenue

DCF Model	Fair Value	Enterprise Value	% from Terminal Value
5-Year Growth	$(1,234)	$(217)M	50.1%
10-Year Growth	$4	$233M	126.7%
5-Year EBITDA	$(1,234)	$(27)M	301.0%
10-Year EBITDA	$0	$58M	206.5%

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component	Value
Normalized Earnings	$9M
Discount Rate (WACC)	9.1% - 5.9%
Enterprise Value	$97M - $150M
Net Debt	$36M
Equity Value	$61M - $115M
Outstanding Shares	47M
Fair Value	$1 - $2
Selected Fair Value	$2.55

Key Financial Metrics

Metric	Value
Market Capitalization	$51M
Enterprise Value	$101M
Trailing P/E	0.00
Forward P/E	0.00
Trailing EV/EBITDA	3.45
Current Dividend Yield	0.00%
Dividend Growth Rate (5Y)	0.00%
Debt-to-Equity Ratio	1.52

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)	75%	$1.71
Earnings Power Value	25%	$0.26
Weighted Average	100%	$4.92

Investment Conclusion

Based on our comprehensive valuation analysis, Great Panther Mining Ltd's weighted average intrinsic value is $4.92, which is approximately 351.2% above the current market price of $1.09.

Key investment considerations:

• Strong projected earnings growth (-23% to 4% margin)
• Consistent cash flow generation

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