VANCOUVER - First Majestic Silver Corp. (NYSE: NYSE:AG) (TSX: AG) (FSE: FMV), a mining company with a focus on silver and gold production, has announced the acceptance by the Toronto Stock Exchange (TSX) of its Notice of Intention to initiate a Normal Course Issuer Bid (NCIB), also known as the Share Repurchase Program. The company is authorized to purchase up to 10 million of its common shares, representing approximately 3.32% of its issued and outstanding shares as of September 4, 2024.
The Share Repurchase Program is set to commence on September 12, 2024, and will continue until September 11, 2025, or earlier if the share repurchase is completed or the bid is terminated by the company. First Majestic can buy back a daily maximum of 193,454 shares, which amounts to 25% of the average daily trading volume over the last six months. The shares acquired under this program will be cancelled, and the purchases will be made through the TSX and/or through Canadian alternative trading systems at the prevailing market prices.
First Majestic has stated that it believes the market price of its shares from time to time does not reflect the underlying value of its business and future prospects. The company considers that purchasing its own shares when their market price is undervalued benefits all shareholders by increasing their proportionate equity interest.
The company, which operates multiple mines in Mexico and the United States, has not engaged in a share repurchase under a normal course issuer bid in the 12 months preceding this announcement. This move is a strategic financial decision and is dependent on market conditions going forward.
First Majestic's portfolio includes the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine, along with development and exploration assets such as the Jerritt Canyon Gold project in Nevada, U.S.A. The company also operates First Mint, LLC, its own minting facility, and sells a portion of its silver production to the public in various forms.
This news report is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. These statements include potential future purchases of shares under the company's NCIB and are subject to change based on market conditions and other factors.
In other recent news, First Majestic Silver Corp. has announced a definitive merger agreement with Gatos Silver, Inc., valued at approximately $970 million. The merger is expected to create an intermediate primary silver producer with a combined annual production of 30-32 million ounces of silver-equivalent. Gatos shareholders will hold about 38% of First Majestic's shares post-transaction.
In addition, First Majestic reported a 7% increase in silver production and a 9% rise in gold output in the second quarter from its three operating mines in Mexico. The company has revised its 2024 guidance, maintaining a consolidated production forecast of 21.4 to 22.6 million silver equivalent ounces.
BMO Capital maintained its Market Perform rating on First Majestic's stock, with a steady price target of Cdn$10.00, following the disclosure of these second-quarter production figures.
Furthermore, the company announced significant findings of silver and gold mineralization at its San Dimas Silver/Gold Mine in Mexico. The exploration program has yielded positive results, particularly within the central and western parts of the property.
These are the recent developments for First Majestic Silver Corp.
InvestingPro Insights
As First Majestic Silver Corp. embarks on its Share Repurchase Program, current market data and analyst insights from InvestingPro paint a picture of a company navigating through challenging times. The company's market capitalization stands at $1.4 billion, reflecting the size and scale of its operations in the precious metals sector. Despite the challenging environment, First Majestic's commitment to its share repurchase program indicates a confidence in the company's value proposition and long-term strategy.
InvestingPro Tips suggest that the stock is currently in oversold territory according to the Relative Strength Index (RSI), which may signal a buying opportunity for investors who believe in the company's fundamentals. Additionally, while analysts have revised their earnings expectations downwards for the upcoming period, First Majestic's liquid assets still exceed its short-term obligations, showcasing a level of financial resilience.
From a performance standpoint, the company's price has witnessed a significant decline over the last three months, with a 27.41% drop in total return. This could be a factor in the company's decision to initiate the buyback program, as it may view its shares as undervalued. Moreover, with a P/E ratio of -17 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at -19.41, the company's profitability challenges are evident. However, the InvestingPro platform lists additional tips, providing deeper insights into First Majestic's financial health and market position, which could be particularly beneficial for investors considering this potential opportunity.
Investors can access a comprehensive list of InvestingPro Tips for First Majestic Silver Corp. by visiting InvestingPro, which includes further analysis and metrics that could influence investment decisions.
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