What is MIRL.CN's Intrinsic value?

Minera IRL Ltd (MIRL.CN) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Minera IRL Ltd's estimated intrinsic value ranges from $0.12 to $0.12 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.12 +683.3%

Is Minera IRL Ltd (MIRL.CN) undervalued or overvalued?

With the current market price at $0.01, 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 Minera IRL Ltd's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows

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 0.26 1.03
Cost of equity 4.5% 10.4%
Cost of debt 4.0% 7.0%
Tax rate 5.7% 19.0%
Debt/Equity ratio 15.17 15.17
After-tax WACC 3.8% 6.0%

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: 4.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $34 (FY12-2023) to $67 (FY12-2033)
  • Net profit margin expansion from -60% to -18%
  • Capital expenditures maintained at approximately 9% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $(15)M 68.6%
10-Year Growth $0 $155M 96.1%
5-Year EBITDA $(1,234) $4M 217.7%
10-Year EBITDA $(1,234) $27M 77.9%

Key Financial Metrics

Metric Value
Market Capitalization $8M
Enterprise Value $165M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 4.20
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 15.17

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) 100% $0.04
Weighted Average 100% $0.12

Investment Conclusion

Based on our comprehensive valuation analysis, Minera IRL Ltd's weighted average intrinsic value is $0.12, which is approximately 683.3% above the current market price of $0.01.

Key investment considerations:

  • Strong projected earnings growth (-60% to -18% margin)
  • Consistent cash flow generation

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