2025
Hochschild Mining — CAPM/APT Analysis
Investment Thesis
Hochschild Mining is a useful test case for cost-of-equity estimation because emerging-market precious metals exposure introduces commodity, FX, country, and market-factor risk that a single-factor CAPM can miss.
The research compares an augmented CAPM framework with APT-style multi-factor models to assess whether a broader risk model produces more realistic discount rates for miners with concentrated geography and commodity exposure.
Key Metrics
Valuation Output
Scenario and contribution view
Methodology+
The study compared observed equity returns against market, commodity, currency, and country-risk factors. The aim was not to produce a single precise discount rate but to identify which framework better captures systematic risk for emerging-market miners.
Regression outputs were assessed for explanatory power, factor significance, and practical usefulness in valuation work.