- Silvercorp Metals (TSX:SVM), a profitable Canadian silver stock, will repurchase up to 8,487,191 common shares or 4.8 per cent of shares issued and outstanding as of Sept. 5
- The repurchase program will allow management to capitalize on undervaluation between Sept. 19, 2023, and Sept. 18, 2024, suggesting the potential for attractive entry points during the period
- Silvercorp is a Canadian-listed mining company producing silver, lead and zinc metals in concentrates from mines in China
- Silvercorp Metals stock (TSX:SVM) is up by 6.12 per cent trading at $3.64 per share
Silvercorp Metals (TSX:SVM), a profitable Canadian silver stock, will repurchase up to 8,487,191 common shares or 4.8 per cent of shares issued and outstanding as of Sept. 5.
Repurchases will occur between Sept. 19, 2023, and Sept. 18, 2024, through the TSX, the NYSE American and alternative trading systems in Canada and the United States. The company will cancel all shares acquired under the program.
The move is meant to provide “enhanced flexibility should market conditions result in Silvercorp’s shares being undervalued relative to the value of its mining operations and corporate assets,” according to a statement released today.
Silvercorp shares have gained only 10 per cent over the past five years and are trading at only 0.91 times book value, despite the company having generated considerable net income over the period under constraints from the COVID pandemic. Results include:
- US$39.72 million in FY2019
- US$34.27 million in FY2020
- US$46.38 million in FY2021
- US$30.63 million in FY2022
- US$20.61 million in FY2023
- US$9.2 million in Q1 FY2024
Additionally, Silvercorp held cash and cash equivalents and short-term investments of US$200.6 million, as well as investments in associates and other companies of US$121.5 million, as of June 30, 2023. These assets account for more than half of the company’s market cap, meaning investors gain exposure to its mineral production at a deep discount, given how the average analyst estimate of Silvercorp’s mining assets stands at US$640 million.
Fiscal 2023 production yielded 6.6 million ounces of silver, 4,400 ounces of gold, 68.1 million pounds of lead and 23.5 million pounds of zinc. This includes all-in sustaining costs per ounce of silver, net of by-product credits, of US$9.46, which compares favorably to the current price of US$23.30 per ounce.
Daily repurchases on the TSX are capped by regulation at 58,170 common shares, or 25 per cent of the average daily trading volume based on the previous six months of 232,682.
Silvercorp purchased and cancelled 294,831 shares at a weighted average price of C$3.49 during its previous repurchase program from Aug. 29, 2022, to Aug. 28, 2023.
Silvercorp Metals is a Canadian-listed mining company producing silver, lead and zinc metals in concentrates from mines in China. Click here to read the company’s latest investor presentation.
Silvercorp Metals stock (TSX:SVM) is up by 6.12 per cent trading at $3.64 per share as of 9:39 am ET.
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