Novagold Resources (NG:TSE) Fundamental Valuation Report

Fundamental Valuation Report

Novagold Resources(NG:TSE)

Basic Materials:Gold

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$3.52 (USD) / $4.70 (CAD) 23/01/2019

Weighted Valuation
$5.04 (USD) / $6.74 (CAD)

Use a conversion rate of 1.33572 from USD to CAD.

Overall Rating
Undervalued by 43.4%

Valuation Models Analyst Consensus: $6.50 (USD) / $8.68 (CAD)
(in order of importance) Comparables: $2.86 (USD) / $3.82 (CAD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (NG:TSE CAD)

Price 4.70
Range 4.66 – 4.79
52 week 4.49 – 6.44
Open 4.79
Vol / Avg. 228876/253035
Mkt cap 1.53B
P/E 0.00
Div/yield 0.00/0.00
EPS -0.35
Shares 324.65M
Beta 0.80

Company Description

Novagold Resources Inc is a mineral exploration company engaged in the exploration and development of mineral properties. The company owns 50% of the Donlin Gold project, which is located in southwestern Alaska, approximately 20 kilometres north of the village of Crooked Creek on the Kuskokwim River. The company also has an interest in the Galore Creek mine, which is a copper-gold-silver asset located in the traditional territory of the Tahltan Nation in north-western British Columbia, Canada, approximately 150 kilometres northwest of Stewart.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for NG:TSE

Using a discounted cash flow model we generated an intrinsic value of ($1.43) (USD) / ($1.91) (CAD) for NG:TSE

Comparables Model

Using similar companies and price based ratios we generated a valuation of $0.69 (USD) / $0.92 (CAD) for NG:TSE. We also generated a valuation of $2.86 (USD) / $3.82 (CAD) using other metrics and comparables.
The comparable companies were Alamos Gold (AGI.WT:TSX), Yamana Gold (AUY:NYS), Centerra Gold (CG:TSE), Iamgold (IMG:TSE) and SSR Mining (SSRM:TSE).

Company NG:TSE End Date Value
Earnings/Share ($0.35) (USD) / ($0.47) (CAD)
Book Value/Share $0.52 (USD) / $0.70 (CAD)
Sales/Share $0.00 (USD) / $0.00 (CAD)
Cash Flow/Share ($0.03) (USD) / ($0.04) (CAD)
EBITDA/Share $0.00 (USD) / $0.00 (CAD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) / $0.00 (CAD) 0.0
$0.42 (USD) / $0.57 (CAD) 63.2
$0.00 (USD) / $0.00 (CAD) 0.0
$0.00 (USD) / $0.00 (CAD) 0.0
$0.00 (USD) / $0.00 (CAD) 0.0
NG:TSE Ratios Used Average Values AGI.WT:TSX AUY:NYS CG:TSE IMG:TSE SSRM:TSE
0.00 PE Ratio 32.90 0.00 0.00 8.12 0.00 57.69
7.76 PB Ratio 0.81 0.00 0.54 0.60 0.61 1.50
0.00 PS Ratio 1.85 0.00 1.26 1.15 1.54 3.44
0.00 PCF Ratio 7.81 0.00 5.00 5.33 7.43 13.46
0.00 EV to EBITDA 5.54 0.00 0.00 4.20 4.41 8.02

Multiples

Using a multiples approach we generated a valuation of  $2.39 (USD) / $3.19 (CAD) for NG:TSE

Company NG:TSE End Date Value
Earnings/Share ($0.35) (USD) / ($0.47) (CAD)
Book Value/Share $0.52 (USD) / $0.70 (CAD)
Sales/Share $0.00 (USD) / $0.00 (CAD)
Cash Flow/Share ($0.03) (USD) / ($0.04) (CAD)
EBITDA/Share ($0.10) (USD) / ($0.14) (CAD)
Price Based on Comps Adjustment Factor
$0.00 (USD) / $0.00 (CAD) 0
$2.39 (USD) / $3.19 (CAD) 0
$0.00 (USD) / $0.00 (CAD) 0
$0.00 (USD) / $0.00 (CAD) 0
$0.00 (USD) / $0.00 (CAD) 0
Ratios Ratio Average
PE Ratio 0.00
PB Ratio 4.57
PS Ratio 0.00
PCF Ratio 0.00
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  NG:TSE for the last 10 years was  4.52

We ran the Adjusted Book Value for  NG:TSE and generated a book value of  $0.51 (USD) / $0.69 (CAD)
By multiplying these we get an adjusted valuation of  $2.32 (USD) / $3.11 (CAD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for NG:TSE. The 1 analysts have a concensus valuation for NG:TSE for 2019 of $6.50 (USD) / $8.68 (CAD).

NG:TSE Novagold Resources

No analyst recommendation
Current Price: not available

No analyst consensus

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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