Maintenance CapEx vs Growth CapEx

[Deco]

Hey guys,

How are you? I am thrilled to be posting for the first time after navegating quietly around here for years.

I am currently looking into some Gold mining companies, ASX:NST, ASX:RRL and GOLD to be precise, and I have been attempting to separate the maintenance capital expenditure from growth CapEx in order to get to a more accurate Cashflow for owners.

Could any of your kind souls share how you would go about it?

Thank you so very much! ??

Regards,
Andre D

 

[Value Collector]

Hey guys,

How are you? I am thrilled to be posting for the first time after navegating quietly around here for years.

I am currently looking into some Gold mining companies, ASX:NST, ASX:RRL and GOLD to be precise, and I have been attempting to separate the maintenance capital expenditure from growth CapEx in order to get to a more accurate Cashflow for owners.

Could any of your kind souls share how you would go about it?

Thank you so very much! ??

Regards,
Andre D

Hi Deco,
Sorry I don’t know anything about the particular company you mention, but there are a few ways to get an idea.

Some companies report a number called “stay in business expenditure” this is basically their estimate of how much of the spending was used to keep exisiting operations running, if they quote this amount you can deduct it from total cap ex to get an idea.

another way is to deduct the depreciation and amortisation amounts from the total capex.

the depreciation number should give you a rough idea of how much their assets wore out/consumed/depleted that year, these assets require capital investment to replace, so some of the total cap ex is used to replace this capital that’s depleted.